You should be able to pay direct debits from savings pots as well as normal pots. Would be very helpful!
They’re held by third parties and need a day to get the money once requested. Since that money arrives in the afternoon I can’t see how that would work
Basically what @Rat_au_van said.
Though, tbh I’m not sure why Monzo don’t allow instant withdrawals from savings pots, when they do allow us to receive BACS payments a day early. It’s not like we can cancel the withdrawal, so the money is guaranteed to hit the account the next working day.
However, even if Monzo did allow instant withdrawals from a savings pot, I’m not sure about allowing direct debits to be paid from them. I’m sure there would be people who wouldn’t put a £10 buffer (the minimum amount required in a savings pot) in the pot and would then complain that their bill pot is being closed every month when the direct debit happens.
Yea they could allow instant payments like when you get your pay a day early. Or also they notify you of direct debits a few days in advance, so could request the withdrawal from the savings account when they notify you of the upcoming payment.
Why would it be very helpful?
You’d just wipe out any potential interest because you’re withdrawing money each month wouldn’t you? You’re best using a standard pot for bills and leaving savings untouched.
Easy access savings pots aren’t very useful for long term savings goals. You’re better off using stocks and shares savings for longer term investment. For those of us who use easy access savings pots to keep some short term savings in, to earn some low interest on (rather than it just sitting in a current account), it would be useful to be able to pay direct debits from that too. Rather than having to withdraw every time, or put it aside after a pay check, or have it eat out of our monthly budget. If you’re using an easy access savings pot for the interest then that’s not the smartest option cause it’s pretty low to begin with. Taking out a bit every month for direct debits really won’t make much difference. So yeah it would be very helpful.
Of course it would be helpful. Say you’re paid on the 10th and your rent comes out via Direct Debit on the 26th the funds would have been interest bearing until then
Unfortunately the savings pots are a bit antiquated in needing a day’s notice and a minimum £10.00 deposit. You can get better rates of interest in other current accounts where you can set up the direct debit there
Your bills money surely can’t make much interest in such a short space of time can they? Wouldn’t you rather have segregation of savings vs committed spend?
Then as you mentioned you can put your savings into shares or longer term investments. This would be far more beneficial than the pennies you would make with Monzo?
I do see your point if you want to keep all of your money within the app, but if you kept your long term savings inherently segregated from any current account (as I do) it would be a good to be able to have set aside bills money (and indeed money you don’t even need for any given week) be interest bearing, with the added functionality of automated payments out of it.
For me it’s just further slickness and reward for budgeting, which is what the app should be about. At present I use my second TSB account to fulfil this very purpose, it results in about 50p in interest but it requires little effort to do it.
With interest rates as they are, I get your point but I don’t sniff at any penny. If you could do this, it would encourage me to keep all my monthly salary with Monzo pay day to pay day (the rates would have to be better though ) . Hope this helps!