Splitting off from the main Plus thread, please use this thread to discuss the interest feature of Monzo Plus 
6 Likes
2 Likes
Makes all the savings pots useless.
I closed all mine and turned them into regular pots as it was double interest and instant withdrawal.
16 Likes
Makes sense. Whether pennies or not!
2 Likes
Oh is there a 2k limit? 
Is that a pot limit or total limit across balance and all pots? 
Well that’s sh*t.
Thankfully I just need to switch one pot back.
Ain’t nobody got time for dat…
Rookie mistake 
14 Likes
I bet that is exactly what Monzo wanted - improve the cash in the bank, and not the cash in 3rd parties banks 
3 Likes
Never really held £2k plus in Monzo, other than payday, even along the low interest pots from the third parties, so agree that interest alone is not a crowd puller as not many would maintain the £2k to maximise this aspect.
I get 1.15% at Marcus, currently, so that’s where my Pots sit.
5 Likes
Maybe it could be that in the future, Monzo Plus customers get preferential rates in the easy access savings pots too? This would be interesting to see - whether this is paid by Monzo or the providers
1 Like
Couldn’t get much better than 1% anywhere now tbh. Marcus is only 1.05%
1 Like
S’updog
1 Like
We need to be rate beaters be better than the rest to capitalise on numbers signing up with that other features I think would work cause some people go where they can make money
If you got more interest than the cost of the account then it would be loss making for Monzo - the whole point of plus is to help Monzo with driving profitability
1 Like
But that would make nearly 0 sense for Monzo to do.
It is a shame Monzo weren’t able to offer just a little more than Marcus, but I guess it is hoping people don’t fully use the interest allowance
Interest rates are now lower (BOE rate). Which affects the cost of banks paying interest.
No bank ever pays more interest than it feels it needs to. It’s always a balance based on the overall funding costs that a bank has an how much they are aiming to attract; it’s all modelled and various approaches would have been reviewed my Monzo before going down this route.
Look at all the big UK banks - they all are paying 0.10% or similar right now, as essentially their don’t want extra money parked with them. But many consumers still prefer to park deposits with the biggest banks as there is a feeling of safety and security that some people feel regardless of the FSCS compensation scheme.
The banks which have the best interest rates are challenger banks who want to attract Money into the accounts.
Monzo is a challenger bank but they do not have a big loan book right now which will also impact how much deposits they want to get in.
Monzo’s comparators for the Plus account would not have been interest rates in savings accounts but interest rates on current accounts. There are not many current accounts that offer interest and of those that do Monzo’s is not the best but not the worst.
Plus accounts have been actively mentioned in Monzo’s strategy as one of the revenue streams that help them get to profitability - alongside growing the loan book and interchange income amongst other things.
Ultimately Monzo will have modelled an interchange level that they think will work best for the product at this time given various factors. Of course consumers always want a better rate though and Monzo have calculated that this is a level which will work for a reasonable number of people to make it worthwhile.
1 Like
Did I read somewhere that debit interest on arranged overdrafts would also be reduced to 1%. Seem to think I did… but now can’t find the reference?
To be honest I’m not overly fussed either way - I find all the interest deals available mean if you’re aiming to get the most value you have to be moving money through loads of bank accounts each month.
£5k in bank 1, £2k here, £1k somewhere else with a minimum pay in of £2k… etc etc.
While it may not be the most profitable for me, I prefer to have a view of the majority of my stuff in one place.
£20 a year is nice. But it’s also negligible in the grand scheme. And the same applies across the board really for all the other bank accounts with the same kind of deal
(For me, at least)
3 Likes
The reality is that Monzo is going down the path of a different business model compared to most banks. As other commentators have said in the past week it’s more like a SAAS monthly fee which has been more a technology rather than banking approach.
I do think some banks in the best had different interest rates for their upgraded account - such as HSBC Advance - but going back a few years this was in a period where interest rates were a lot higher. In the current interest environment it’s harder to make comparisons.
1 Like