Does anyone on here that has used Monzo for a while (and have a good memory) know if Monzo have ever offered competitive saving rates? They also seem quite low on variation of products compared to others and the main ones are 3.25% and 3.65%
I’m trying to use Monzo more and making it my regular account, but their savings rates seem out of sync with everyone else?
Nationwide do a 4% fixed and 6.5% (variable up to £200 a month), Zopa is 7.1% (variable), First Direct do 7% fixed!
It’s difficult to justify with such low rates here. Even with the fancy features.
As far as I can remember, and it’s a long way back, their rates haven’t ever been super competitive and they often react pretty promptly to the BOE changes. I forgo this with money in one place and decent tech/features. I have regular savers e.g. Zopa as Monzo have never offered that type of savings account.
Monzo don’t need/want to be competitive. Not everyone chases the extra percentage point and they can make more money this way. I don’t get the obsession about having everything with Monzo. If you want the very best rate, then move to find it.
Yes. I think they may be relying on this a bit too much!
Umm. Okay?
It’s good to build relationships. You’re then offered more / preferential rates (although seemingly not here..!), higher limits or loan values and so on. I also don’t like too many accounts for the sake of it. I’d much rather have the one - particularly where Monzo offers some good features and functions already.
Nationwide, for example, have a great 6.5% product currently. I would never have known about it without having a dig around. Monzo app is more intuitive. Nationwide isn’t great.
Yes, this is the option, which is why I was querying about the rates as I’d rather not do this so I can take advantage of the Monzo analysis tools (especially as they’ll improve).
If it’s short term/lower values there’s not much in it to be too concerned but even on the current few extra savings I’m looking to do, the difference isn’t just pennies. I certainly wouldn’t be doing long term/higher value saving with Monzo based on the current rates.
Also thanks for the link! Sorry - I do try and search on here for them but don’t think I’m great at finding things as others.
They do an instant access Loyalty ISA at 3% but it’s not a flexible ISA, unfortunately, which limits its usefulness if you’re in the habit of transferring large amounts back and forth.
I get what you mean, but Monzo doesn’t even have these options. They have 5% on the roundups but that’s it. I’d love a £250pm at a higher rate.
You literally get better rates and higher limits/loan amounts the more of a relationship you have. My loan indication this time round was a lot lower % and the amount eligible a lot higher based on my previous with Monzo. I know it’s not “knowing the bank manager” but similar principles. All this swapping/changing and load of account doesn’t do anyone any favours. So, I’ll respectfully disagree on this one, acknowledging it’s not the sole factor.
Well at the moment I can save £650 a month with 2xLloyds regular savers at 6.25%./5.25% with instant access and no penalty. I’m getting 4.45% on instant access with Zopa smart saver, as well as competitive fixed rate options, although this was an offer for 12 months for paying in £500 to Biscuit per month. I get 5.25% on NatWest digital regular saver capped at £150 deposit per month, but you can also add round ups from current up to 5x round up value, again instant access. It’s just nice to have some form of higher interest savings option that sits easily alongside your current account.
I do agree though that Monzo offering is not bad, given unlimited savings and access, just that more options alongside this would be nice.
I don’t believe Monzo are reaching for the above average earners to be fair. Majority are likely <£30k or benefits customers praying for the paid early.
Think Carlos point is people on benefits are unlikely to have a large amount to deposit and earn interest on in the first place, and even people with £30,000 in the greater scheme of things a point of a percent difference won’t relate to much extra in £ value maybe a couple of pence or a few pounds. It’s people with very large pockets moving large amounts around that see the most gain with small percentage point changes although I’d argue don’t turn your nose up at anything big or small. I get where he’s coming from though
Actually: yes, this is probably on the right lines I hadn’t thought about that. I’m not really sure what the point of “Paid Early” is. If you’re using that all the time, you’re effectively just changing your pay day. Probably has its uses for others.
Indeed. Or, if not, encourage them to be or at least provide the app benefits to show people how to grow money. Normal (non saver) ‘pots’ are also not overly useful for the “savvy saver”. I remember seeing a post here from a guy who said he puts everything in saver pots to earn the interest off. Albeit small, it makes sense as it all adds up with compounding daily. I don’t think I have the energy for that level!
I’ve never been an ‘avid saver’ as such - more so a spender (“you can’t take it with you”), but as I’m getting older and got different goals it’s definitely a factor now. Just a shame I’ll have to look elsewhere.
Those higher rates lose banks money, which is why they are normally limited to either 12 months or they heavily restrict the amount you can deposit.
Case in point, I have £5k in a Natwest Regular Saver paying me 5.25% AER. But it took a while to build as you were limited to deposits of £150/month. I run nothing else through Natwest, so I am a loss making customer to them.
Plus, depending on your income you will either have a tax free interest allowance of £1,000 (basic rate taxpayer), £500 (higher rate taxpayer) or nothing (additional rate taxpayer). It makes more sense to stick larger sums in an ISA paying say 3.25% like Monzo do rather than squirreling away lots of small amounts each month, which you have to move after a year and then have to say pay 40% tax on.
I get what you mean - and thanks as that does kinda make sense.
Surely even more reason to entice usage of other products? If Monzo had higher interest, and for those of us who like the one provider, we’d be more inclined to earn them money on card transactions, mortgage, investments etc. and, of course, the money Monzo make off the back of your savings allowing them to loan out at higher rates.
If banks are using customer money to offer loans and other credit at far higher %, they’d do well to have a more attractive saving % - particularly fixed rate!
This is a common fallacy, banks are not allowed to use customer money to loan out to other customers. When you deposit money with a bank you become an unsecured creditor of the bank.
Banks create money simply by crediting your account (you owe them money) and creating an asset in their books (as you owe them money)
Also from the banks point of view debtors are a lot more profitable (they pay interest, fees, possibly spend on credit cards so they get interchange fees) than Savers who are a liability (as detailed above)
Everything here is correct except the top premise. Customer deposits will form part of banks funding model for mortgages, loans and credit cards. Deposit rates, net interest margin and topping this up with wholesale funding is all part of the picture, managed by credit risk teams.
For what’s it worth on the original question, this is likely part of the picture with Monzo - they don’t offer mortgages and they likely have a pretty tiny lending book versus their deposits, so they just don’t need competitive rates. Also their per customer costs are likely relatively high given I would assume a smaller ‘main’ book (lots of customers holding smaller amounts with them as many will use Monzo as their spending account only). So they likely have a decent amount of balances with them that are relatively low cost from a rates pov, but higher cost from an account management pov.
On a personal note, I think I’ve recently started moving out of the demographic attracted by the Monzo proposition and finding the pull of ‘boring’ banking more interesting. Perhaps I’m getting old. But the Monzo app is getting cluttered and the features increasingly feel like gimmicks, supported by pretty ropey propositions once you get past the shine on top. That’s me getting old!
but that’s another conversation (my job, which I won’t go into).