Moneybox launches new savings account
Although this isn’t the best rate on the market, the people behind Moneybox say the app – including its round up feature – makes saving easy and convenient.
The account is powered by Investec, which is covered by the Financial Services Compensation Scheme, so savings are protected up to £85,000.
It can be opened with just £1 via the app only.
This marks Moneybox’s first foray into traditional savings after it launched a cash Lifetime ISA in July paying a market-leading 1.4 per cent.
What is a notice account?
Notice accounts are a good solution if you don’t want to lock your savings away for a year or more, but you won’t need instant access to your cash either.
They work just like a normal savings account in that you deposit your money and leave it there. The difference is how you get your hands on it.
While most easy access accounts allow you to withdraw your cash immediately, notice accounts require you to give your provider advance warning. So, in the case of the Moneybox product, you’ll need to give 95 days’ notice to make a withdrawal.
Rates tend to be higher than you’d get with an easy access account, and typically the longer the notice period, the better the deal.
What does Moneybox say?
The app’s co-founder, Ben Stanway, said: “The low interest rates being offered by high-street banks on easy-access accounts make it almost impossible for people to grow their hard-earned money. We believe people deserve better and we’re excited to launch our 95-day notice account, offering customers a much higher rate from as little as £1.”
How does the Moneybox rate stack up?
The top 95-day notice deal at the moment is from Charter Savings Bank and pays 1.81 per cent. However, it requires a minimum deposit of £5,000.
Oaknorth’s 90-day notice account pays 1.77 per cent and can be opened with just £1.
If you don’t want to tie your money up for as long as 90 days, you can get 1.51 per cent on a 45-day notice account from Shawbrook Bank, which is 0.01 percentage points more than the top-paying easy accounts from Marcus and Cynergy Bank.
Anna Bowes, co-founder of Savings Champion, said: “This is another interesting development in the savings market, as while the rate on this 95 day notice account is some way off the best rates available on the open market, being able to open savings accounts easily via an app will be attractive to those who would prefer not to shop around and complete an application form each time they open a savings account.”