I’m sure if this has come up already. But we tend to add things to pots a lot (maybe excessively) so by the end of the month we need to watch the account to make sure we move money when needed. Having just got the overdraft email from Monzo it made me think that for some an overdraft isn’t necessary as there are funds there just in pots. If you could potentially select a pot as the default to pull from encase of an admin error on our parts(we are only human after all) than there isn’t a need to set up an overdraft for this type of accidental incident. Like selecting pots for direct debits in a way, but this would be for incidental going over the zero line.
Where would be the line in terms of taking funds, and say it wiped all the funds and left you in a situation you had no more money.
Would the blame be passed to monzo?
There’s many tools to help you budget within the app
The payment would thankfully decline to bring your attention to it if you’d not budget for it, and resolve in a sensible manner.
If your pot direct debit fails, it will take it from the main account.
But really Monzo should solve this but allowing all pots to be part of the balance. So if your main account is -£100 but you have £200 in a pot, you’re not overdrawn. It’s bonkers they do it like this and it punishes people who aren’t as financially stable.
I appreciate this idea and think it could help some but at the same time like Carl mentioned, what would happen if someone has this set up and they make a payment that takes them overdrawn and then swallows up everything in the pot and then causes further problems?
Seeing as Monzo already takes extra money from the main balance if the pot balance can’t fully pay for e.g. a Direct Debit (which will reduce the main balance ‘unexpectedly’ perhaps?), what’s the difference if it also took money from a pot to pay a payment made on the main balance?
I don’t see any conceptual or practical difference.
If then a DD cannot be fully paid by the pot, it will draw extra from the main balance, going overdrawn (which will happen later, hence less fees).
EDIT: Ultimately I believe the customer setting an overdraft does so accepting responsibility that if any payment takes them into overdraft, they will be responsible for the fees, so if someone really doesn’t want an overdraft, they should not have one and let payments fail.
That’s not an issue, if that is an issue than an overdraft is probably the best idea. But for people that have a reasonable amount in different pots for instance like holidays etc. than they could select one of those to take from and then sort it out after.
It’s a nice idea, but Monzo has specifically designed its system to keep Pots and main balances separate.
Starling do exactly as you’d like: Though it won’t physically move money around (helpful if you’re budgeting in particular Pots) it won’t charge interest on an overdraft backed up by a balance in a Pot.
On the flipside, if you pay your Direct Debits from a Starling Pot, they bounce there if you don’t have enough money; the overdraft is just available on the main balance.
The alternative for you, is not to allocate all your balance into Pots, then you won’t have to reverse some of that every month.
There’s probably always a reason you can find not to do something.
But, especially if offered to paid accounts, a pot that effectively works as an overdraft would be, I think, a net helpful thing.
Well, this could happen, for example;
Vast majority of times this allows you time to sort out any issues. Immediately rejecting a DD can cause immediate issues you can’t resolve.
I’m sorry there is little argument to not allowing funds from pots to be used. It’s your money. It’s there. Monzo have it.
I can see caveats to the suggestion, I was thinking from my own personal experience of a small payment being rejected when in fact there is more than enough else where that could cover it and for a payment to fail is for me the worst outcome if I’ve been to busy to move stuff around to make sure the main account balance has enough to cover. And we don’t tend to leave to much money in the main part of the account besides what would cover groceries and small incidentals for the month as in our heads that means we have more money to play with. Adding it mostly to pots has helped us save a vast amount more organising it in this way than before.
I find it odd and frustrating that the account/pots don’t work like this. I keep money in a pot specifically as an emergency reserve.