Monzo Plus - here's what's coming next!

I was hoping that would happen to me, but nope. 🤦

But it is ringfenced. Using Monzo’s own definition of “interest” in their recent simplified English blog post, why shouldn’t they pay interest on money you have deposited into a Pot? And why should they charge you for being overdrawn when you have money deposited with them, albeit it in a Pot?

I do agree that since the introduction of third party Pots with different rules and rates of interest, it does muddy the waters. I still think it would be trivial for them to include basic Monzo Pots in the credit and debit interest calculations.

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Oh course I realise it is actually ringfenced and until I move it into my active balance I can’t spend it - but that is for most the core benefit of a non-interesting bearing pots that it is siphoned off and “inaccessible” so to know that my overdraft and interest are affected makes it feel like it isn’t - which for some might be crucial - but I agree I would prefer the way starling operate as it seems “fairer” to all involved.

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I think Monzo is at a stage where their offering starts to clash with their goals and it will make no sense at all.

If they want to be a financial hub, working through partnerships and offer their own current account, it should work as such:

Monzo have their own current account with pots - money in standard Monzo pots is still with Monzo - as such, it should count towards my overall balance. If my running balance goes below zero, but I still have money in a pot I have an overall positive balance with Monzo and I am not using their money. As such, money in Monzo pots should count towards interest and overdraft fees, a la Starling.

When it comes to partners, the money is not with Monzo, and as such that money shouldn’t count towards my overall account balance. If my main balance goes below 0 and I have £10000 with OakNorth, I am using Monzo’s money as my 10k is with someone else. In this case, I should be charged for my overdraft.

It makes the most sense. Monzo should consider my overall balance with them and should not be afraid to compete with partners. This is why I do not think their current stance makes sense. Be a financial hub or be a bank, don’t weaken one to please the other

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I do agree here and think you lay out perfectly how it should operate - I am in a way playing devils advocate as to if it were to continue to play out now (not factoring into overdraft and therefore not factoring into interest).

It is for me, the only problem is that a majority of people use a pot to siphon money away for exactly when it is need (committed spend) and so therefore for that to affect whether they are actually overdrawn may be more of a hindrance than a benefit - they want to know what they are on exactly at that point (having disregarded committed spend) - if that makes any sense?

Yes, it makes sense - the way it currently is, with pots not factoring into overdrafts it makes sense for them not to count towards interest.

But with the introduction of an interest on the main running balance, they might discourage people from saving in pots and from using one of their main headline features… quite a backwards way of thinking if you ask me.

I’m just hoping that between the FCA cracking down on fixed overdraft fees and the introduction of an interest Monzo will review how pots work - although I might be naive.

As I said in another thread, Monzo have got quite confused with where they are and where they are going.

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Getting some lovely tweets on Social today, which is making us all very happy! :grinning:

Making me feel all warm and fuzzy! :heart:

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This may be a rather cynical view - but it may be encouraging the use of the savings pots (and therefore a way for Monzo to get the sweet sweet % via the partnership agreement.

But I do think Monzo need to have a “review” of their overall goals, once the revenue stream push has died and it’s possible to reflect

Which was my reasoning for going with the 2.5% for balances under £1k.

It seems counterintuitive to offer interest on larger balances as it would disincentivise using pots. Though I’m making an assumption that few people leave 4k in their main balance.

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So with Monzo Plus being opened up more people now, have the current Plus Card Quality issues been resolved now?

Not that anyone was asking for it, but I did a quick comparison of annual interest rates of the various balances offered in the Plus Survey.

Obviously, it doesn’t take into account daily compounding of a fluctuating balance, or the fact that if you hit the cap you’d likely move it to a different pot but…

Basically at the 1.5% rate, this is the most “effective” between a balance of £1666 and £6000.

So for most, the question would be on average is your balance between £0-£1600 or £1600-£6000.

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When Monzo launch taking direct debits out of savings pots. Won’t this mean that there would be money less money in the Monzo account to gain interest on as people would leave just their spending money in the account?

Nothing has been announced yet and there’s no indication that any of the interest rates in the survey or the limits are actually going to be selected.

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:heart_eyes: that flowchart, insane organisation skills. I do mine on a boring spreadsheet. £2.3k in general living expenses so we’re in a similar situation.

How did you make that BTW?

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If commited spend pots launch, AND the interest paid excludes ALL pots, I’d probably switch my vote from 1.5% of £4k to 2.5% of £1k.

Excellent stuff, I was doing this earlier and including the easy access pots but got distracted and didn’t finish.

My balance is never that high because it doesn’t earn interest at the moment but I would prefer to keep some more as a buffer and I wouldn’t feel like I was losing out with either the 1.5% or 2.5%.

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If you need more than 1k to pay monthly bills, sounds like budgeting is needed

Sounds like someone doesn’t live in London…

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Or have children

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I have two kids, but don’t live in London.

Budgeting.

Not the person your replied to, but it’s a Sankey diagram (not a flowchart), built using http://sankeymatic.com/build/ – it’s fairly popular over on UKPF as well.

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