This will be a little bit of a longer one. In short, right now, it isn’t. This was a decision made right at the start of overdrafts (back in 2018) and it has come up a few times since (eg. when we discussed the question below, which i’ll get on to) and i think it comes back to how you see pots. Just how “separate” are pots? This will probably be answered differently by different people but I’ll try give a few examples that favour the current implementation and informed the decision back in 2018:
- If you have two accounts, your Barclays account and your Monzo account and you use Monzo for your spending so you have £500 in Monzo and -£250 in Barclays. You wouldn’t expect Barclays not to charge you for your overdraft usage. You can micro-manage this situation if you want in the same way to can micro-manage your
Monzo pot - Monzo current accountsituation so you’re not paying interest but most people won’t do this because either they’re not that bothered or they want to keep that separation of money. - The argument on the above might be that it’s with different companies but here’s another example. You have £2,000 in your Monzo current account and a £2,000 loan with Monzo. How much interest do you expect to be charged on your loan? I’d expect almost everyone to say they’re changed on the £2,000. So net, your not in debt with Monzo but you’re still paying interest. This is your choice to keep your money separate. You could have the money in your current account offset the loan but this is a different product (an offset loan) which would require a different credit agreement and would likely be priced differently to take into account this interaction.
Monzo will always send you a notification if you enter your overdraft so you can easily move money from a pot if you want to. This isn’t something customers really ask for/ question (through chat/ complaints/ etc.) compared to loan extensions which customers do reach out to us about quite a lot, from the data we can see it would have a reasonably small impact, and it would also take a fair chunk of time to change from a technical perspective so even if we were thinking about it - it would be extremely low on the priority list.
So the discussions around this is something that I was involved in. We’ve gone with an option at the simpler end of potential solutions and I’ve gota say I think it’s really cool and gives customers the flexibility to use their pot in a way they want to use it. The solution also tested really well in user research 