Hi, I have read a few weeks ago that pots will start having interest paid on, can we simply opt-out of this setting and not having interest on those pots?
Hello! I think the plan is that you can create a new pot that bears interest, but that will actually be held by another bank, albeit in a way that is transparent to the end user.
We’re yet to see the details, but my understanding is that you’d need to proactively choose to create a new pot (and probably do some light touch approvals etc), rather than all your existing pots being converted to earning interest.
May I ask why you would not want interest?
Some people do not want it for religious reasons
I see. Would perhaps the interest going to a charity be an idea?
Pass! As the person would still have to sign up to an account and so the interest would still be in their name it makes me doubtful it would be allowed.
But that’s a totally uninformed opinion just based on the few things I’ve read
I suppose it would depend on the religion and the reasons behind the prohibition.
As with most things, if it can be accommodated in an elegant way in the app, it’s probably just better to let the user decide based on personal preference.
For people who don’t want interest I think a simple solution would be to get it automatically transferred into my account.
Information for those curious on why someone wouldn’t want an interest bearing financial product: https://www.moneyadviceservice.org.uk/en/articles/sharia-compliant-savings
Not the only reason but one of the main reasons!
Just got another email about interest bearing Pots. I’m at the understanding that it would be for one pot and probably supplied by a third party, hence the marketplace link.
My question then comes, why would you want multiple pots (other than to easily see the values of individual targets) when it’d make most sense to push any money you want to put to one side in the interest bearing pot.
Or would there maybe be clauses about how often you can withdraw funds?
There may be limited withdrawal interest bearing savings pots - we just don’t what Monzo is planning yet but eager to find out! Hopefully multiple interest bearing pots will be possible!
I’m looking at it as Monzo providing the user interface and the market providing the actual accounts. In time, savings should become commoditised and you might even (hopefully) have automatic transfers between providers when rates change.
Under this model, though, you might still want multiple pots / savings accounts. As you say, you might want a term account, instant access savings and a regular saver. I might also want a couple of instant access savers for different purposes - one for a coin jar and one for longer term savings…