No, if you go overdrawn on you banking account, then you are using funds that don’t belong to you.
It was your personal choice to move money to a pot, which is separate, it isn’t part of your daily banking account.
There are multiple tools at your dispose to not go overdrawn. Set up a pot to pay the bills from, so money is aside that you know you have enough to cover your commitments. Monzo send notifications if you are close to going overdrawn. You can log on 24/7 to view your accounts and see if anything is coming out in advance. You can mark things are reoccurring payments, so that you can see when things might be due out every week/month/quarter/year.
Maybe even get a small overdraft like £50 if you are concerned that you can’t balance your spending and maybe something is coming out you didn’t expect.
Take responsibility for your money, if you are going overdrawn then I would suggest putting money into pots isn’t the right thing to do if you can’t balance your main account to not go overdrawn.
Pots form part of the same banking account, Monzo just put a flashy UI and display the numbers slightly differently, but they are fundamentally in the same bank account.
It’s not separate.
Yes it is.
I think you’ve badly misunderstood (or not even read) the preceding discussion, so I’m not going to bother replying further.
However Monzo is unable to use that money for transactions, unless you have given prior approval, ie. Bill pots.
Therefore they have lent money in order to fulfill transactions. As such, I think it’s the users responsibility to move money back to the main balance to cover those transactions, or pay the appropriate fees for the lending Monzo has done.
Plus, as others have said above, the messaging could become very confusing if standard pots contribute to the main balance but savings pots don’t.
My point is that it is not your own money, your own money is in a pot, inaccessible to Monzo for the purpose of fulfilling transactions. They are lending you their money to fulfill transactions until your money is provided to them to cover said transactions.
So should Monzo also not charge interest on loans up to the value of what is in a customers pots? That would also be lending that customer “their own money” by this logic.
" IF was set up at a time when many banks were exploring opportunities to use new technology to reduce the costs of providing financial services. IF established what it marketed as “intelligent” products whereby customer pick a combination of all or some of a range of bank accounts including current account, savings account, mortgage and credit card. The credit balance in a person’s current account and saving accounts would “offset” any debit balances in the person’s mortgage and credit card accounts. The customer would then pay interest on the net balance, potentially allowing savings to be made on borrowings." Intelligent Finance - Wikipedia
Yes. Mortgages, loans and credit cards were offset by savings and a current account. You could either opt to have no interest charges on the offset balance of the lending products, or the same interest rate applied to the positive balances. Of course, the first option was slightly more advantageous as you would pay tax on the interest earned.
This entire argument could be applied to everything that Monzo do though. Instant Notifications → Get rid of them and take responsibility, real time balance → get rid and balance your own account ledger, etc etc.
Their entire schtick is using technology to help make money transparent and easily manageable - and if Monzo have the tech to make Pots a thing in the first place, I don’t see why they can’t do the same for this.
To me the argument for the charge just goes against what Monzo seem to stand for.
And actually, the more I think about it, the more I dislike the approach to it.
I think the difference is what you’ve said in your comment, these things make your money transparent and manageable. Changing how the overdraft works so it includes pots arguably makes your money less transparent and manageable (see my comments around usability above). Monzo is about empowering the user, and Rhino is really saying due to all the empowerment work Monzo has done, its really easy to manage your money yourself in regards to moving money out of pots when it’s needed. Monzo do very little automation for you, its all really been about giving you easy access to tools to do it yourself.
Ian, do you know how fractional reserve banking works? It works on trust in Monzo
If everyone withdrew their cash from Monzo this second - Monzo wouldn’t be able to meet the demand because they’ve lended some of it out
So no, there isn’t actually a commitment to not lend money that’s in pots, if you think HSBC or any bank keeps all the savings accounts cash sat around to withdraw - you’re mad
No, Ivan.
We want the balance ring fenced so it cannot be used for spending, however we want it to be treated as part of the same account as it is literally part of the same account.
This way it’s like a little overdraft buffer. If the account goes into the red entirely Monzo can charge, if not, why are we being charged for an overdraft that’s given to us using our own money?
That’s the prerogative of the customer imo, if they know they have money coming in tomorrow or later that day, they can wait. If they need to move cash from a pot however, that’d be fine too
It isn’t separate. It is part of the same account. It doesn’t have its own details and if it did no one would even argue this.
Just incorrect entirely - Monzo lend and work on fractional reserve banking. Your entire balance isn’t sat around gathering money at the Bank of England base rate 24/7. They lend it to others. So they can use the money, they just need to pray you and everyone else at monzo doesn’t take out their cash at once.
Actually you’ll find monzo is the weird one here. Most banks don’t block money from usage in your account and then bill you for an overdraft when your account is still net positive
And I also find most banks apps terrible, non transparent and difficult to use Monzo is weird because it is nice to use. I spent 10 minutes the other day clicking around the barclaycard app attempting to find out how much I’d spend on petrol two days before (it wasn’t possible in the end).
This is why I tried to specify for the purpose of transactions. The customer has, by putting that money in a pot, requested that Monzo does not use that money for transactions, with the exception of bill pots which the customer has authorised for a specific transaction.
Yes but either way money has been used for transactions if the main balance is now negative. The discussion here is around whether they should be charged for it.
It makes no difference to the overall balance sheet of the account if the money is moved from the pot or not. Its still positive. So why not let the money sit in the pot and only apply charges when the the overall balance sheet of the account is in the negative?
There is an argument for keeping things tidy and in order by moving the money out of the pot, but that’s not what this topic is about.
The way I see it is that the money has been placed in a pot, so Monzo can’t use it for transactions. They have therefore lent you additional money to cover the cost of your transactions. Which is why I think it’s fair to charge for that, or the customer can move money back, essentially re-authorising its use to cover transactions.
How much someones main balance plus all pots, excluding 3rd party savings pots
How much is available in your overdraft that is fee free
How much is available in your overdraft that would be charged
All these numbers would be constantly changing so it would need to be somewhere prominent?
It would also make it very confusing/complex to forecast how much you’re going to pay if you go into your overdraft. Is that going to help people manage their money better?
Monzo is weird because it is nice to use. I spent 10 minutes the other day clicking around the barclaycard app attempting to find out how much I’d spend on petrol two days before (it wasn’t possible in the end).