Locked Target Pots

(Michael) #1

So I know that the pots feature is already a thing and you can put money in and take it out… BUT what about pots that are locked and will stay locked until you hit your target?

Say for example your saving money for a cheap car (£500) and your putting money aside in the Locked Target Pot. Until you hit your target of £500, you cannot touch (withdraw) the money. This money is locked until target sum is complete.

Apologies if this has been posted already and I’ve missed it. The lightbulb in my head FINALLY lit up for something useful! :joy:

(Gareth) #2

Incoming harsh critique, but intended to be constructive:

There are such things as fixed interest accounts - that only pay interest if you make 0/1 withdrawals (potentially with a max withdraw %) before the term is up; and I believe one of the HtB/Lisa ISAs had a 25% penalty (equiv to bonus?) if not used for housing/retirement.

But my thoughts (as usual) wonder to the extreme circumstances - what if the boiler breaks, you lose your job or a sudden expense arises. Or maybe just that cheap car became £50 cheaper. Not having any access to those funds might cause further stress (someone else might buy the car before you). You can’t use a penalty as an incentive instead, as the account doesn’t pay interest - though products on the market would… There is mention of a password locked pot, but you probably know the password.

So, my question is: if you needed to feed your family, what should you do to open a locked pot?
Maybe wait a time-delay? Maybe give a code to a friend? Lower the target so the goal is reached?

Some would say a good financial lesson is learning self-restraint to not take the money, but I understand people do need a bit of help sometimes.

(Trevor Mitchell) #3

That’s an awesome idea, love it. :slight_smile:

(Michael) #4

I understand the points you make and very good points you make too. For me this is an issue saving money hence my lightbulb switching on and I guess really this idea can be constructed around circumstances such as the ones you mention. As some of these don’t apply to me personally, I didn’t really think from the perspective of extreme circumstances but it makes sense to build a fail safe around the Locked pot in case of such scenarios. I think the idea can be further built on now with your suggestions and I hope Monzo take the idea and what I will call fail safes into consideration.

(Michael) #5

I agree with you on this. I used to have a 5% interest regular saver with HSBC. Some unexpected car repairs came up and I needed the funds to cover it, it only took a trip into branch to close the savings and get the funds.

What did I learn from that? Build a bigger ‘emergency fund’ by having more self-restraint. It’s something that needs to be learnt rather than enforced by your bank.

I have a LISA that I could put more money in each month, but I chose not to incase I need the money. I’m only putting away what money I can manage without and still have some money left for the unexpected.

If a pot can have interest then locking them might have a use, but it’s not for me.

Is Monzo University still a thing?