This is a manual process though - it generates friction requiring effort to overcome. I think what @anon44204028 and I would prefer - and what Starling show can be done in practice - is to effectively make this process fundamental so the situation of being low on funds due to “in-account” pots (not commenting on external ones!) cannot happen
IMO that’s the better way of this stuff working and given that you don’t have loads of people complaining about accidentally spending their savings on Starling then it probably works well enough
Exactly - and you also get “low balance” notifications on Starling, irrespective of how much money you have in Goals. So it behaves just like Monzo, minus being charged for the overdraft if you have enough funds to cover it in Goals, and of course provided you have an active overdraft - otherwise, payments will just bounce.
My view is that Monzo aspires to be our “financial control centre” which implies that we must have manual control over certain things. I understand your perspective, but I personally wouldn’t classify this as a friction for me but I can see how if compared to Starling’s method that Starling users would view it as such.
I really cant understand the logic of keeping your money in a pot and choosing to go into an overdraft whether its counted in your balance or not is a bit academic , the money either sits in a pot earning an amount of interest in Starlings case ,or not in Monzos present set up, and you choose to borrow money at a bigger rate of interest - Why would you borrow when you have money ??? - Starling choose to count it into your balance and apparently warn you of low balance, Monzo doesnt count it in your balance and warns you to switch it over from your pot because you have low balance ???
Seems to me this discussion is going round in circles - there’s no right or wrong way to approach this. Monzo picked one and Starling picked another. They’re both good banks - I’m happy to leave it at that
The thing is, that if Monzo was charging interest, rather than a flat fee, I’d likely be illegal to charge interest if your total balance is above 0, as you can only charge interest on money you actually lend. As such I find Monzo’s approach ethically very darkly grey indeed…
The way Monzo charges for their overdraft is just ridiculous. Lots of people are trying to justify the charges but everything @anon44204028 said just highlights how ridiculous it is. They made pots to be segregated within the same account but clearly Monzo think this is the way forward or they would’ve admitted they got it wrong on this occasion.
How does this appear on a statement if you’re +£75k and you’re being charged overdraft fees seeing as pots don’t appear in statements?
Edit:
I also realise other banks charge for overdrafts but their savings account are entirely different products and are completely different accounts
On this statement I have £15 in a pot, and £5 in my “main account”. It shows my total balance as £20. So, your pots are included in your balance on your statement. It’s only when they want to charge you a fee that the pot suddenly is no longer part of your balance.
The statements aren’t going to make sense then or evidence the need for a overdraft fee to be charged?
I’ve been using Starling whilst waiting for Monzo’s Apple Pay (yay) and for the payment list to be a bit better and keep my main balance around £30-50 with a considerable amount more kept in Goals all separated. If I was charged an overdraft fee whilst being several thousand in credit on the same account I wouldn’t be impressed.
only if you have enough money in your goal to cover the overdraft that Starling are lending you, but not charging you for because its your money sat in Starlings bank in the goal that you are using in your overdraft, and as soon as the goal goes below the overdraft that you have spent you’ll get charged
Starling are lending you your money until your money doesnt cover the cost of what you’ve borrowed – they’re not some benevolent aunt ---- arghhhhhhhh lol try using your goal money after you’ve taken the overdraft that your not getting charged for because you have money in the goal… lol admittedly the goals do give you 0.5% interest up to £2k
Monzo tells you this bill will bounce , do you want to move some money from your pot or do you want an overdraft - why would you be stupid enough not to move your money from the pot ???
Well, the statement doesn’t make sense at all, but in fairness it would be visible why overdraft fees would be charged: in the right most column of each payment is the account balance at that time, so you could work it out from there.
However, the statement is a right mess:
balance at the last transaction: £5 (first line, right column), but total balance: £20?
even worse:
starting balance (not explicitly shown on statement, but known to me): £0,
“Total deposits”: £20,
“Total outgoings”: £15,
gives a “Total balance” of… who can do the math… £20!!!
Lloyds (and by extension Halifax etc) do and have done since the dawn of time.
Their equivalent to pots are esavers. I currently have about 3 with them, all of them pay 0% interest.
Any time my main balance goes into the red (even if I have a hundred times the amount in an esaver), I still get charged overdraft fees.
What’s the difference other than sementics? They functionality exist exactly as pots do (other than Monzo warning you, giving you the option to correct it)
You call it semantics, but to many it is a difference.
Lloyds esavers would stand up in court as a legally separate account with their own account number so would not be taken into account when calculating overdraft interest, and the current account balance does not incorporate the balances held in the esaver accounts.
Monzo pots are not a separate account and do not hold their own account number so would not stand up as a separate account in court. Also their balance is incorporated into the balance total displayed for the account.
That Monzo include your pot balance in your total balance on your official bank statement. To charge for overdraft if your total balance is greater than zero, is just not OK, in my book.
Its more like you have £20 in your hand and the other £20 in your pocket. If the item costs £30, Monzo makes you go all the way back home to get the £10 needed, despite this being in your pocket.
Starling on the other hand realise you already have another £20 in your pocket, meaning you don’t have to go all the way back home (they don’t charge you).
But I left the £20 at home as I didn’t want to spend it yet. If it was in my pocket it would be counted in my shopping money instead of my bus fare money. So yes I buy everything at the shop but ruined my budget and have to walk to work.
Completey agree! Starling and Monzo just ring fence the money in Goals and Pots. Money in pots should be included in the total account balance before overdraft fees are applied.
Whilst I can’t do it, because I don’t need a fee paying overdraft with Monzo (as I have a £250 free overdraft with First Direct if needed), I wonder if you could successfully dispute any fees against Monzo if the main account balance is below £0 but above £0 when you include pots. It would be interesting to see the actual wording of the terms and conditions of the overdraft. Feels disputable to me, but I’m no lawyer.
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