Set interest provider for main balance

Following on from “Instant withdrawals from savings pots”.

Can Monzo have an option to choose a savings provider to provide interest for money held in the main balance.

I assume it could work by doing one transfer in/out behind the scenes of whatever selected provider at the end of the end to avoid doing it for every transaction during the day.

To be able to get 1.15% it would certainly beat Starlings own 0.5% up to £2,000 and 0.25% up to £85,000.

How would Monzo obtain deposits for their lending activities if everything was held at 3rd party banks?


This is a good point. :thinking: :man_shrugging: :neutral_face:

I’m not sure how I could spend anything if it was all held by someone else?

If was only transferred in at the end of the day to balance what I’d spent, how would the spending be covered until then? I assume interest would need to be paid at that point to cover their costs.

The idea is monzo would “cover” until the money was released from the savings provider in my head. But as @o99 says if everyone did, monzo couldn’t make their own money from lending out people’s cash behind the scenes.

If that was the case, they also wouldn’t have money to cover those purchases for the same reasons, presumably.

Well the customers money is one pool as I understand, some of it is lent out to other customers. All it’s doing is transferring between provider and monzo and to account for all the + and - s for all customers who have opted for that provider.

But if 100% of money wasn’t actually held with Monzo with everyone opted for their money to be in savings and monzo just acting as a proxy, then monzo couldn’t lend out said money to keep paying their bills.

What Monzo could do is lend out more of the money it holds and actually pay everyone some interest it makes for contributing to this like Starling does by giving back 0.25-0.5% depending on balance.