Over the next few weeks, we’ll be announcing a series of new partnerships that will lay the foundation for a true savings marketplace. We wanted to lay out our future vision for that marketplace.
By building a marketplace, we can allow banks and building societies to decide what interest rate they’d like to offer customers based on how much money they want from them. Today, we’re live with one bank (OakNorth) offering an Easy Access ISA account (paying 1.14%) and fixed term savings accounts (paying up to 1.55% for 12 months).
Over the coming weeks, we’ll be bringing other providers into the marketplace — all with competitive rates. Each partner bank decides how much interest it offers to customers, which largely depends on the volume of deposits they’re looking to attract.
Our first Savings Pots turned out to be hugely popular, with customers putting in millions of pounds per day.
Instant access 1.5% APR product or no deal.
Didn’t they have to close it due to hitting a cap?
It proved so popular that we had to temporarily pause this savings option while we found more partners to help us offer other savings accounts.
Personal current account: Major Banks: 0.00% Small retail banks: 0.00%
Bank of Scotland and Lloyds do 1.5%, TSB at 2% (5% for the first few months). Starling offers 0.5%. All current accounts. Not convinced median average is the right metric here, but pushes a certain point of view for sure, and makes Monzo look less awful with their 0.00% interest on current account
First direct will even give you 5% if you have a current account with and save into a regular saver account.
Unless Monzo can beat the likes of 5% from Chip and Dozens or even Marcus’ 1.5% I won’t be partaking, unfortunately
Yeah those numbers don’t seem right to me. We are not in a negative interest environment just yet! Maybe if they are looking at EU or Global banks I might buy those figures but it seems wrong.
To be fair to the blog post writer, the table in the blog post is taken directly (without modification) from the FCA Strategic Review of Retail Business Models published in June 2018 (page 21 if people want to see for themselves).
It’s also important to note that the table shows a weighted median.
Yeah the median average angle isn’t massively helpful for us everyday folks.
Already expecting a deluge of responses so I’ll focus on this paragraph then drop out of this thread. As ever, this is new, and Monzo are being transparent with us…
“Our aim is that in six months’ time, our savings marketplace will be extremely competitive, with a wide range of options for all of our customers. People can continue to go direct to any savings providers that we don’t offer, and we’ll be bringing on new options based on demand and customer feedback.”
Let’s see where we are in six months (but ohhhh the forum speculation that will happen until then!).
How about an option that doesn’t have a minimum starting amount of £500 or £1k?
Marcus offers 1.5% (1.65% first 12 months) easy access with a starting amount of £1. I don’t expect Monzo to match this, but coming close enough would make many, myself included, consider moving savings over.
The 0% rate on the current account as a whole is poor, considering direct competitor Starling at least throws in 0.5, but I realise it’s probably too far gone for Monzo to change this.
Call them out where they are crap and good.
This is a similar service to what Hargreaves Lansdown provide, and I think it’s quite good. Monzo offer direct access to competitive savings rates from other banks without needed to go out of your bank. It’s a good idea, HL wouldn’t do it if it wasn’t. And the rates are better than what most main banks offer directly as well.
It’s worth mentioning that many of the current accounts quoted above have conditions to their interest (two Direct Debits, pay more than £1,000/month into the account, hold a regular saver account, etc.). Not everybody meets or is willing to do enough workarounds to meet these requirements.
The standard accounts for Nationwide, Metro, Barclays, Lloyds, Natwest, HSBC, and so on all offer no interest.
With these kinds of reports, the FCA is often looking for “what do most people get”.
Also remember that the FCA review this data comes from is a selection of the entire UK population. While I may earn 1–5% on my savings and it’s certainly possible to get 1.5% easily, most people I know just have one easy access saver attached to their current account plus maybe an ISA or other longer term account.
Exciting! Sounds good for us
I don’t mind the minimum £500 entry level - I think it works as a way to “build-up” some reserves before putting it all into a fixed term pot.
I appreciate Monzo’s 1.55% isn’t easy access but if you were to put £500 in a Marcus and £500 in a Monzo 12 month fixed term account - you’d lose 50p in interest over the year. I think it is quite good and promotes saving over a longer period, rather than putting in and taking out all the time.
I think this article makes it pretty clear these are not ‘Monzo’s offerings’. Monzo arn’t putting the 500 quid or 1 grand restrictions on, their suppliers are. They’ve said they’ve opened it up to a number of companies and are allowing them to set their own rates and rules so long as they get 0.2% on top, and then the other savings banks can battle it out amongst themselves to offer the best rate within Monzo.
Don’t really understand why people would complain about it based on the blog post, it looks great and is a very interesting model I know pre Monzo I didn’t have a savings account, and am only using one through Monzo because of the ease of use.
The link in the article appears to be broken
I think this is great. Individuals with significant cash to save are inevitably going to shop around and end up going direct to savings providers, but for people with modest amounts of cash to save (and certainly the 50% of people earning next to nothing on their savings) I think Monzo will provide an excellent and straightforward option with this offering.
We can’t guarantee to always offer the best possible savings rate, and you may get a different rate if you go to the savings provider directly.
As long as this is always made clear, I really don’t think Monzo can go wrong with this.