Unless you are holding more that the FSCS protected £85000 the reality is that 0.2% is going to make no difference to you. If you have more than the 85k the question would be why are you holding it in a regular current account on a permanent basis.
Monzo is a business that has to make a profit at the end of the day.
0.2% is also in line with the competition.
The fact is monzo don’t offer savings (for whatever reasons, I’m not read up on those). They can offer this service though Without needed to set up an entire savings business.
I was planning to create a thread about this but I will paste the guts of it here @mrw34 for those who can’t access it. It was an interesting article, the kind of article I thought Monzo would start to get when they were looked at the same critical level as legacy banks.
[…] customers using the Monzo app for their savings get significantly less interest than they would if they had the same account directly with OakNorth.
[…] a six-month fixed-rate bond with OakNorth using Monzo can earn 1.36pc on their cash. Yet by opening the account directly with OakNorth they would receive 1.76pc. This is equivalent to a 26pc gap.
[…] a nine-month savings account a Monzo user would earn 1.46pc rather than 1.81pc, a 21pc penalty. The 1.91pc rate on a one-year account with OakNorth falls to just 1.55pc through Monzo, also a 21pc loss.
[…] Monzo’s instant-access cash Isa has the same discrepancy. Savers can earn 1.14pc by using Monzo but could earn 23pc more, or 1.44pc, by going directly to OakNorth. The only advantage to using Monzo is that it offers a lower minimum balance, £500 versus the £1,000 required by OakNorth.
[…] Rival digital banks do not have such discrepancies. Starling Bank does not offer savings accounts but has investment and pension services available through its app. In each instance its customer is charged the same fees as they would be if they went direct to the underlying provider.
[…] Other aspects of Monzo’s pricing structure have also come under the spotlight. A customer taking out an overdraft of more than £20 with the bank is charged a flat fee of 50p per day. This is expensive compared with both established and digital rivals. A customer dipping £30 into their overdraft for 30 days would be charged £15 by Monzo. At First Direct there would be no charge, while at Starling Bank the cost would be 35p.
No idea where they got that “23% more” figure from.
This also really annoys me:
Anna Bowes of Savings Champion, a comparison service, said: “Monzo is taking a very generous cut, yet customers are unlikely to be aware of it and as a result could be missing out on substantial additional interest that they could earn if they were to go direct to OakNorth.”
Monzo make it extremely clear that they take a 0.2% cut.
I wonder what their funding model is and how transparent it is…
Its actually 26% i believe. They got the number from the how much more you can gain from going direct. e.g. going direct you can gain 26% more in interest than with Monzo.
In what way do they make it extremely clear?
In fact no where in the immediate sign up screens does it mention that monzo take 0.2% or that you’ll get more interest going direct.
It actually suggests the opposite. Saying “We’ll always offer you the best interest rates our providers can give you” Which while may be technically true though monzo isnt actually true in reality, as Monzos providers can provide better rates direct.
For their concierge service (which as far as I can tell is paying them to keep an eye on best rates and provide guidance on switching when it would be beneficial) they earn 0.2% per year + an implementation fee of 0.1%
It’s unclear to me when the implementation fee is due. Is it a one-off fee or does it apply whenever an account change is made?
You have to 100,000K in cash savings so no idea who they’re target audience is
Yeah, I was just pointing out that their numbers were wrong, which suggests a poorly researched/hastily written article
I’m pretty sure this is mentioned explicitly in the terms and conditions. I also remember reading it in the ISA sign up process, which I did the other day (could be misremembering though).
It will be mentioned in the terms somewhere, but its not on the immediate sign up screens, i looked. I got all the way to it asking me to add money. No terms, no mention of differences in interest, no mention of what Monzo takes. The only mention of rates in that regard is what i mentioned above “well always offer you the best interest rates out providers can give you”
Whilst I agree with some of the critique in that article (the critique of overdraft fees), I think the critique of the savings product offered by Monzo is unreasonable. For balance, the article should have emphasized the superiority of the Monzo-provided savings accounts to the savings accounts provided by most high street banks. This is useful information for people who prefer the convenience of having their current account and savings account in the same place (I would guess this is the majority of people).
Perhaps worth noting The Telegraph have a Financial Solutions division which is somewhat similar to Monzo’s marketplace model: https://www.telegraph.co.uk/financial-services/
They partner with CompareTheMarket for savings account comparisons and used to partner with Savings Champion on a cash concierge service.
So they take what Monzo does + a fee for what Monzo claims their fee is for
Cheek of that
Typical papers of 2019 that they let that charge go unanswered
This sounds great, it’ll be nice to have a variety of products available to suit different types of users.
Also liking the sound of the potential future pension pot visibility. That last paragraph didn’t go unnoticed. 
What does your “Select Pot Type” screen look like?
I don’t have this option
I believe this referring to 
Monzo linking with Chip on marketplace? And helping people save with automatic savings using transaction data 
.
With the potential to earn 5% bonus p.a. on your savings by recommending friends.
This is good as it has instant access to you funds 
This will be for both Monzo & Starling using who have previously long been able to use this.
Little plug here 
my referral code is: 3RIIZI
Download app for 
Chip - https://itunes.apple.com/gb/app/chip-automatic-saving/id1141297472?mt=8
Android 
https://play.google.com/store/apps/details?id=to.chip.app&hl=en_GB
That’s what I see. There’s no 1% non-ISA savings pot so I wonder what @permotio is referring to.
@seank I’m not sure if you were replying to me, but I don’t think it relates to Chip. @permotio’s post suggests it is something that has returned. Chip connectivity with Monzo has not yet been launched.
Click through to the ISA option and it asks whether you want to make it an ISA or not.
How many screens do you have to click through after clicking “Flexible Savings Pot” shown in @Dunsford’s post to get to that screen? When I click on “Flexible Savings Pot” I immediately get to the following screen but have not gone any further because I don’t want to open an ISA
v3.0