Question about earning interest on savings - will the interest rate be lower than opening a savings account directly with the third party provider? For instance, I believe shawbrook bank offers 1.34% easy access savings account - so will you pass on the same interest rate or will it be reduced so that monzo earns a cut?
We haven’t finalised how this will work yet and it will all depend on negotiations with the partners.
Some things to consider:
Some banks might not be willing to pay more than the stated interest for specific accounts (usually easy access). This is because they don’t have to pay to increase their current deposit base. If we want to offer these types of accounts, we might not be able to take a cut on top of the advertised rate.
You will very likely find better rates on the market or on the website of our partner as a result. To make this a viable proposition for Monzo we have to take a cut from the rate that the partners pay. This will be 100% transparent and it will be your decision to open the account this way but we are trying to make this so that you won’t have to do any crazy long account openings…it should be as simple as 3 taps!
Generally speaking, we learned from our marketplace test that users prefer convenience and visibility over top rates. This might no be applicable to all and some people are more likely to shop around for the best rates.
It would be impossible for us to build a third-party connected solution with interest rates that change every week on the market and still be competitive. Therefore, we think our value-added can be on the convenience and ease of account opening.
Looking forward to bringing my savings over to Monzo if the rate is good enough (currently getting 2.25% with a Virgin Money regular saver).
One question though (I understand if it’s not been decided yet), does Monzo plan to keep records synced up with partners? So, if I change my phone number or address in my Monzo account, is the plan that any connected partner accounts would receive my new details too? Or would I need to go to their website(s) to update?
Yeah this, I suppose part of the sign up process could see the partner send login details, or some sort of internet banking registration so you can login to the partner’s site. Not overly seamless even that way though…
If Monzo are being trusted to provide the KYC/AML checks, hopefully they would be trusted to keep the details up-to-date.
Edit: Maybe my “not overly seamless” comment is a little harsh. Having connected accounts is still a great feature in the first place
If these were completed by Monzo and passed through to the saving account providers you’d hope this would be an extra incentive for them to offer accounts via Monzo, could in the long run also help reduce their costs. Might be completely wrong in thinking that, as they may also be required to re-complete them in house for regulations?
I guess all we can do is wait and see, will be good to have everything back in a single app though!
I’d like to think Monzo could negotiate something that ends up them offering the same rates as you’d receive from opening the account directly.
At the end of the day the chances of us opening the account with that partner without Monzo acting as an intermediary would be extremly low… a finders fee would be the ticket here i think to keep everyone happy rather than us noticeably getting a worse rate.
For Instant Access savings, I’m not too bothered about getting a market leading rate. It just needs to be better than the rates I currently get at the high street banks I use (excluding accounts with special deposit conditions and introductory bonus periods). In practice, I think this means anything above 0.75% would be sufficient for me to move my instant access savings to Monzo.
In the mean time can anyone recommend the best savings or ISA account? Also the best rate joint savings account? Would definitely rather keep all my money with Monzo but would like savings to have a return!