I like the 1p Savings Challenge, but I’ve noticed it pauses if my main account goes overdrawn. Because I usually keep most of my money in a pot and only top up my main account as needed, the challenge often stops even though I’m happy to cover those little savings later.
It would be great to have an optional setting to let the challenge continue, even when I’m temporarily overdrawn-or to let it pull directly from a chosen pot. I’d much rather accept a small extra overdraft charge than miss a day and have to catch up manually.
I hit the same issue regularly. Direct debits go out before the 1p challenge which send me over-drawn that morning (very early). I have a large enough over-draft to cover it (which Monzo trust me to have). It would be helpful if the 1p would also then go out as I always move money in from a savings pot to cover the overdraft (and if I don’t Monzo charge me).
All other transfers etc go out even if you’re over-drawn. So I’d like Monzo to consider this also.
As the other commenter put it, direct debits go out and it adds an unnecessary point of friction.
I don’t think your point about it being Monzo’s money is valid, and I don’t think you have thought it through. By that logic a direct debit coming out of my overdraft would be me using Monzo’s money to pay my bills, or a card payment would be using Monzo’s money to fund my groceries, but those are allowed because it’s a planned overdraft.
No, because paying bills and groceries are necessities, a gimmick challenge that in no way impacts your life, implemented for the idea of saving, is not a necessity.
In fact, it shows poor money management if you are not able to save. Living costs shouldn’t be confused with silly games.
I work in financial services and can tell you Monzo will be required to complete fair value assessments for each feature they launch.
If you objectively look at the 1p challenge it drives quite poor value already. You’d earn more interest if you took the money when you got paid that would be invested through the month and added it to any savings account in one go, so interest is accumulating on a higher balance.
If you fund the challenge from the overdraft which will be on a rate of 19 to 39% you are actually losing money, even if you just incur interest for the odd day.
A small number of customers won’t view their accounts often and may be taken into an ongoing situation if they don’t realise they have been taken overdrawn and their balance grows.
There is no way they should let you pay from your overdraft.
If Monzo lent you money to fund their 1p saving challenge, that counts as irresponsible lending and is punishable by law. They will have to refund you the overdraft fees if this comes under the regulator’s radar. See the FOS ruling against Starling recently that triggered overdraft fee refunds en masse.
If you can’t afford to save, the challenge is simply not for you.
I have friends who do the same, and honestly, you’re making your life unnecessarily difficult. You should always have enough money accessible in a current account to cover reasonable daily/weekly expenses and eventualities. If you are finding you need to transfer money over from a pot every time you buy a sandwich at the shop, that’s neither convenient nor good practice.
I’ve had plenty of occasions where a friend was meant to pay the bill at a restaurant and he couldn’t because he had poor signal and/or the banking app was playing up so he couldn’t transfer the money from his pot, then I had to pay instead. Make your life easier, not more cumbersome.
I feel that’s debatable though as some find that inconvenient a consideration, or barrier, to whether they actually need what they’re buying ie on a whim, vs actually going out to spend something.
I’ve tried Pot budgeting and it drives me mad, so spending money sits in one account, bills another account, savings another account.