What is Moneybox?
The central concept behind Moneybox is that it will round up any payment you make to the nearest pound, and then transfer the difference between what you paid, and the nearest pound, from your bank account into your Moneybox account. Once your money is in there, they have various savings, investment and pension options that you can use to grow the money you have transferred. Users can also set separate deposits into their Moneybox account.
Moneybox is a UK based Fintech, formed in 2015. As of 2021, they claim that over 700,000 people in the UK are using their app, and that they have over £1 billion in savings and investments under their management.
How does Moneybox work?
In reality, Moneybox is far more than that just an app that saves rounded-up payments from your account. Essentially it is fully featured saving and investing platform, that uses a direct connection to your bank account to get the funds into your Moneybox account, and they can then be saved, invested, or put into pensions, with a variety of options available of how to do this.
Moneybox works as a mobile phone/app product, so users need to download the app on to their smartphone to get started. Originally, Moneybox users would have to provide the login details of their bank account so that their transactions could be analysed. However, Open Banking became into force in 2018 and since 2020 Moneybox are able to integrate directly with the banks, so that it became very easy for customers set up the app with their bank.
Once users have installed the app, they link it to their bank (all of the main UK banks are supported). You can then set up your round-ups feature, and any other deposits you wish to make into your savings/investments i.e. weekly, monthly or one-off.
|Round-Ups||Moneybox rounds-up all of the payments into your account to the nearest pound, and puts them towards your savings.|
|Other Deposit Options||Choose to make weekly, monthly or one-off deposits into Moneybox.|
|Pensions||Track down and then combine all of your existing pensions, then invest them with Moneybox.|
|Mortgage Advice||Access informations on mortgages via app.|
|Savings and Investments||Open savings and investments accounts with just £1. Plus, a wide variety of investment options and interest on savings.|
Moneybox offer 3 different savings accounts:
The Simple Saver pays 0.25% interest, up to a maximum balance of £85,000. Funds can be withdrawn in 1 day, with 1 withdrawal permitted per month.
95 Day Saver
The 95 Day Saver pays 0.60% interest. Funds can be withdrawn after 95 days.
120 Day Saver
The 120 Day Saver pays 0.70% interest. Funds can be withdrawn after 120 days.
In general, Moneybox investment funds are made up of combinations of different financial instruments. When you begin your investment journey with Moneybox, they give you a choice of 3 different levels of risk – Cautious, Balanced, and Adventurous. They give you choice of the 3 risk levels, and how much of your funds you want to put into each. It is possible to customize the allocations, but Moneybox advise that it is best to stick with the set ratios in each group. The performance of Moneybox investments can be seen on their website.
The different types of investments you can have with Moneybox are:
- Stocks and Shares ISA
- General Investment Account
- Junior ISA
- Lifetime ISA
- Personal Pension
How much does Moneybox cost?
Moneybox have no fees for saving with them or different tiers of service. If you wish to invest, you will need to pay a £1 per month subscription fee. This is the same whether you have 1 or multiple investments with them.
Investment Platform and Fund Fees:
For investments, Moneybox charges in 3 ways:
- Subscription fee of £1 (free for first 3 months), which covers as many investment accounts as you need.
- Platform Fee: This is 0.45% of the total value of all of your investments per year, charged on a monthly basis, and taken from your investment balance. So if you have £100,000 in investments per year, this would be £450 per year, or £37.50 per month.
- Fund Provider Fee: This amount depends on which investment fund your money is with, and ranges from 0.12% to 0.58% of your balance in that fund per year.
For pensions, Moneybox charge 0.45% of the total amount invested per year for the first £100,000 you have in your pension pot. For amounts over £100,000 they charge 0.15%.
In addition, customer have to pay a fund provider fee, which depends on which fund you invest with, and is between 0.12% and 0.58% of the total amount invested.
Who is Moneybox for?
Moneybox is only available to customers within the UK, and you must be over 18 years old to open an account.
Currently, Moneybox are directly connected to the following banks for their round-ups function, so if you bank with any of these, you can set up a Moneybox account very easily:
|Bank of Scotland||HSBC||RBS|
|TSB||Ulster Bank||Virgin Money|
|Yorkshire Building Society|
In general, Moneybox can be a great tool for people just starting out with saving and investing, or who find it hard to get started with saving.
Is Moneybox safe?
Moneybox are not a licensed UK bank. However, all of their savings and investment accounts are held with banks who are fully licensed, such as Investec. Therefore, your savings and investments are protected up to £85,000 per financial institution via the Financial Services Compensation Scheme (FSCS).
Some users may be concerned about giving Plum access to the transactions within your bank Moneybox utilize Open Banking, which ensures that any banking data that they have of yours is fully encrypted and safe, and non Moneybox employee would ever see your login details or personal data.
It is important for anyone either new to investing (or even for experienced investors) to remember that the value of your investments can go down as well as up, and that it is always possible to end up with less than you investment. Investments should be seen as a long term project, with the results accruing over years or even decades, rather than weeks or months.
Moneybox Reviews – what are people saying?
Moneybox have a rating on Trustpilot of 4.4 out of 5 – excellent, from 900 reviews. 72% of their reviews are rated as 5 out of 5, and these reviewers praise the way it helps them save and invest through the simplicity and transparency of the app. Users also appear to be very happy with the communication and assistance of the customer service team.
10% of the review rate Moneybox at 1 out of 5 stars – Bad. These users mainly seem to dislike the length of time it can take to withdraw their funds, and some in regard to difficulties with getting their accounts past their initial verification stage.
There is a very wide choice of saving and investment apps on the market today. Some of the closer alternatives to Moneybox are:
Moneybox provides a simple technology focused solution to saving and investing. The round-ups feature of saving your spare change is a nice attention grabber, but the real value of Moneybox is how it allows new savers and investors an easy to manage way into the world of growing your wealth.