Hi all. First post here (Y) and looking for some advice on how I can best make use of Monzo’s features - and making my money work for me in general
I’ve just moved my salary into Monzo and have a couple of qs
Bit about me currently:
Use Emma app as an aggregate viewer of all Current accounts, Credit cards and Savings accounts
Salary is paid 28th of the month, and Credit Card direct debits (where I do my spending) is paid on the 1st of the month
Manual payment to ‘Internal Transfer’ pot when salary comes in, to pay off Credit Card balance in full; direct debit comes out of this pot
Scheduled payment to ‘Bills’ pot for committed spending each month
Pay the rest into Savings accounts (LISA, high interest savings account) while leaving a small amount in Monzo as emergency fund (since do all spending on credit cards)
I am wondering how I can better make the money, that waits in pots to eventually be collected via direct debits and standing orders, work for me
I am also wondering how I can better make the money work for me that is sitting in Monzo as an emergency fund
For both of these I was wondering if it is better I open a Savings Pot in Monzo, and if so, which one? I can’t discern the difference from the ‘Easy Access Saver at 0.93%’ and the ‘Flexible ISA at 0.93%’; both provided by Investec and both allowing for next working day withdrawals.
Maybe it is because I am new to personal finance and not sure what the difference between the two is - sorry if it is a silly question!
Since the money that goes into this Savings Pot will be temporary (i.e. until the time comes that it is used to pay of credit card direct debit, or to pay off bills) which one am I better off using? Or do you think I should take a different approach?
I am looking to not have money just sitting around in current account not doing anything for me, basically, even if they are going to be used to pay bills. But I’m not sure what best practices are
Any advice or criticism is welcome! Thanks and sorry for the long post
If you want the money there for an emergency, perhaps take a look at Marcus Bank - they offer 1.3% with anytime access. It’s really simple and withdrawals are pretty much instant so it’s there as/when you need it plus you’ll make a little bit extra in interest.
It’s an online account and it’s very simple to manage.
I can’t discern the difference from the ‘Easy Access Saver at 0.93%’ and the ‘Flexible ISA at 0.93%’; both provided by Investec and both allowing for next working day withdrawals.
Maybe it is because I am new to personal finance and not sure what the difference between the two is - sorry if it is a silly question!
So it looks like my best option might be to put my emergency fund in Marcus, and keep my money waiting to go out to bills and credit card payments in a Flexible ISA pot, and move that back to my bills/credit card pots just before payment is due. Does taking money out of an ISA affect the ‘20,000’ per tax year?
Move all your Direct debits so they come out on the 1st of the month.
Keep spare cash in Marcus account.
No need to have an ISA account on those low interest rates. You’d need about £60,000 in it for the tax advantages to have any impact.
I agree with the above. ISAs are great for long term tax free savings not for keeping cash waiting to be spent.
For future reference there is no limit to withdrawing money from an ISA. The annual limit relates to deposits. If you put in and took out the Same £1,000 20 times then you would hit your limit for deposits for the year.
Im not sure that is correct , I may have mis understood though - it …I think, depends on what type of ISA it is , a flexible ISA… I think allows you to take out and put back in money as you please up to a yearly limit of £20K.
your £1000 scenario x 20 times deposit / withdrawal … in a flexible ISA would …I think be a £1000 deposit in your ISA in that year
That’s new to me, interesting information indeed.
Shame they didn’t make it flexible between banks but it makes a lot more sense now.
Admittedly I rarely use ISAs now because they have the limits involved and don’t provide a good deal. Plenty of instant access savers available with much better rates.
yes but as Ive said a few times before …it may not be good interest at the moment , you may not be earning enough interest …at the moment to get taxed upon it , but as your earnings rise and your interest rise…you become taxed upon it …ISAs at the moment allow you to lock that away for later years as tax free income …before you even start on stocks and shares ISAs that can be a great tax free benefit - should they win
