Monzo ups rate on “savings pots”
Digital bank Monzo has launched a new range of “savings pots” which pay the highest rates Monzo has offered so far.
Savings pots are sub-sections of a user’s main Monzo account where money can be kept separately. Users can set up different pots for different purposes – for examples, holidays or university.
Fixed rate savings pots
Monzo is offering 1.81 per cent on its fixed savings pots in partnership with Charter Savings Bank. To get the top rate customers will need to tie up their cash for a year. Those who only want to commit for six months can get a rate of 1.37 per cent.
However, these rates can be beaten if savers go directly to Charter Savings Bank. It pays 2.01 per cent on its one-year fixed rate bond. However, the account requires a minimum deposit of £5,000 – 10 times more than the £500 required if you open the account via Monzo.
The top paying one-year bond at the moment is from the Bank of London and The Middle East which pays 2.1 per cent. This account requires a minimum deposit of £1,000.
Monzo also offers fixed rate accounts in partnership with OakNorth and Investec, although these pay lower rates than Charter Savings Bank.
Easy access savings pots
Monzo is also offering easy access savings pots paying 1.15 per cent in conjunction with both Charter Savings Bank and Paragon.
But, again, savers can earn more interest by going directly to the provider in question. For example, Charter Savings Bank pays 1.35 per cent on its easy access account if you go direct, although you’ll need a minimum deposit of £5,000.
The top-paying easy access account is from Cynergy Bank which pays 1.5 per cent and requires a minimum deposit of just £1.
Monzo customers can also open easy access accounts with Shawbrook or Oak North – but these pay less. All Monzo’s easy access savings pots and fixed rate savings pots require a minimum deposit of £500.
Easy ways to save
Monzo encourages users to save by allowing the option to round up purchases to the nearest pound and putting the spare change in a savings pot. It has also integrated its systems with automation platform IFTTT so users can set up smart savings rules, like putting £5 away each time it rains or taking part in the 1p challenge.
Monzo states that it takes 0.2 per cent commission from its savings partners.
Earlier this week Monzo urged almost 480,000 customers to update their app and change their PIN after numbers were left in a part of their system which members of staff can access.