Virtual 'Savings' Accounts

(Sean M) #73

The ‘B’ account from Yorkshire & Clydesdale Bank currently offer a savings account with ‘Savings Pots’. It’s a great idea, and the main reason I switched to B. The only downfall is their app is very slow and buggy. Can’t wait to switch to a full Monzo account!

(Paul McDonough) #74

This is one of the features that would make me instantly switch to monzo as my full time bank

so with my current bank this is how this solution works

I set a date when my incomes come into my account
I set the dates for standing orders & DDs that will go OUT of my account.

The bank then essentially ‘splits’ my income into 2 pots - one called card and another called bills - the ‘bills’ account or pot has enough money in it to cover all of the expected Standing Orders or DD’s until my next income date, the card amount is the disposable income i have and can use knowing my bills are all covered…

it would be great if the way the bills where organised ensured that the money was ‘reserved’ to cover that expense and we can report on it :slight_smile:

I think the idea of rules or even a generic rule of ’ cover all expenses in the next months of £x’ could work out as a real amazing solution to the mess of having multiple bank accounts to seperate bills, DD’s, SO’s and more :slight_smile:

Somehow having rules which would seperate money out would be ideal for other idea’s too like budgeting for allowance on a night out, what you can spend online, saving for a rainy day and more :slight_smile:

(Ben Green) #75

I think the details that you’ve described regarding the automated reservation of money for standing orders, direct debits, etc, would pair nicely with the targets feature. Whatever is left over from your regular income, after setting aside for targets, could be automatically transferred to your virtual savings accounts of your choice.

I think Tom had mentioned this, or something similar, in a video only I can’t remember which one. You’re the man with a knowledge bank of such references, @alexs. Do you recall?

(Alex Sherwood) #76

I have something similar :slight_smile:

Tom talks about the possibility of writing some script to transfer spare cash from one of the legacy bank’s accounts to another service’s, which pays better interest, here -

video starts at that point in the talk

obviously it would be even easier to create this feature in Monzo to transfer the user’s money to their own Monzo virtual savings account :thumbsup:

(Ben Green) #77

That’s what I was looking for, cheers :smiley:

Although that does raise another question of what interest rate is Monzo planning to pay; and could higher rates be rewarded to those who refer others or perhaps to users who helped build the bank before launch.

(Alex Sherwood) #78

I’m not sure that this is somewhere where Monzo will try to differentiate itself, as the focus is on the current account as their product…in which case, the interest rate (if there is one) would be low & you’d want to sweep your money out of your Monzo account as quickly as possible too!

This is another area where easy access to other provider’s services (like Moneybox), through their integrations, would be more beneficial for Monzo users than relying on a Monzo solution because Monzo users can choose the best solution for them, from a competitive marketplace.

The conclusion that I’ve drawn from this comment from Hugo -

is that the savings accounts might not actually be separate accounts, with dedicated account numbers etc.

They could just be a virtual balance, associated with a particular category which users can assign money to. When they spend that money, the saving account’s balance will reduce & maybe the targets could take into account that it was money that was saved from previous months so it shouldn’t necessarily count against the current month’s spend (as big purchases from savings would burn through large portions of user’s monthly targets which were set up for ‘normal’ spend). But I could be totally wrong :slight_smile:

(Ben Green) #79

That’s true, and also Chip too.

In Tom’s video, he describes scripts that can push money too his savings account, which is held with a legacy bank, and another to pull from it. With that, I don’t see why it should be difficult to do the same with MoneyBox, Chip or whatever savings integrations. Should be easier in fact.

With those market place integrations available as well the in-house option of the virtual savings account, I suppose it’s all about giving the consumer the freedom to choose. That’s a concept other banks, including some startups, seem to be allergic to.

You could be, but I hope you’re right. Otherwise it would significantly undermine the point of the targets feature. Hopefully that’s included as part of this card on the roadmap as it’s scheduled to be actioned before the introduction of Virtual Savings Pots.

(Paul McDonough) #80

i think the main thing about having virtual pots you can assign a monetary amount too is the differentiation from a target… the money assigned to it has to be done AHEAD of time and that money removed and ring fenced from the available balance on the account… i.e

Wages come in at £2000
Bills cos £1100
Pot called bills is automatically assigned £1100 on payday and the remaining balance on the card is shown as £900

If the bills are higher that month at £1200 then it automatically transfers the extra £100 from the main pot

this could then be extended to say… at the end of the month if the bills were lower and we only spent £1010 then the remaining £90 could be transferred to another ‘pot’ called savings etc?

This way is a single account ( or multiple accounts behind the scenes ) where the available balance on the card is AFTER everything else is assigned to the pots and separated into their own discreet balance?

(Daniel) #81

yes… yeS… yES… YES!

Virtual saving accounts and cards would be bloody brilliant!

(Ben Green) #82

That will be possible, or at least something along those lines. I’m not sure of what specifics the Monzo team have thought up on it though.

As people like to save for different things, non essentials and large expenses scheduled for months or years later, they are almost always considered secondary to bill payments.

You are correct about ring fencing essential money for the forecasted bills of a given period. Going by @hugo’s post mentioned above, I would interpret that your pot for bills will be taken care of first in conjunction with the targets feature.

With regards to irregular amounts or intervals of payments, I can’t see any easy way to forecast them accurately. The bill sender should still provide notice of the amount and a rough guide to when it’ll be debited and you’ll need to adjust Monzo’s targets accordingly.

(Ash Kierans) #83

Thanks @alexs hadn’t seen that video before! Really interesting watch.

(Carlo) #84

How about creating something that gives the possibility to link your savings account to peer2peer lending platforms like Zopa or similar. This could also be a great add-on for Monzo’s community. I would value very much the ability to get higher rates on my savings, even if done by bearing a little more risk.

(Alex Sherwood) #85

It looks like this is exactly where Monzo is heading :slight_smile: there’s been quote a lot of discussion about this here -

it would be great to hear your thoughts on what’s been said there!

(Carlo) #86

Thanks Alex!!! I have only Joined Monzo today so I was not aware of this. Ill have a read now!

(Patrick Feltham) #87

Virtual Savings Accounts is a fantastic idea - what they are essentially is Budget Categories.

Does anyone here use any Budgeting Software?

(Dafydd Thomas) #88

Virtual savings or ‘pots’ would be a fantastic way of saving and budgeting for specific things. I can imagine myself setting up one for ‘New Car Fund’ and ‘House Deposit so far’ etc.

(Alex Sherwood) #89

Have you seen the new Targets feature? :slight_smile:

(this is coming to Android :soon: as Monzo’s aiming for both apps to have all of the same features)

(TWN) #90

Like this idea had something similar a few years ago with the one account from RBS but that was a mortgage with no app.

(Patrick Feltham) #91

Love this new feature.

I’ll be keeping an eye on this.

is the behaviour like a “rolling budget”? Where anything that you’ve not spent from a category rolls over into the next month for that category? Or is it just monthly targets that reset at the beginning of each month?

(Alex Sherwood) #92

It’s the latter, the Targets are independent of the previous month’s so you can adjust them for Christmas for example, to take your plans to buy presents (if you’re feeling generous) into account :santa: