Monzo has confirmed the creation of its first ever Instant Access Savings Pot to help its seven million customers handle their money It is being introduced to the market with a competitive three percent AER variable interest rate for savers.
This is the first savings pot of its kind that Monzo has launched which will have money instantly accessible to customers when they need it.
The product was created thanks to customer feedback with the pot having no minimum deposit, and adds to Monzo’s in-app budgeting and saving features like Pots, Salary Sorter and instant notifications.
Furthermore, this product is the first Instant Access Savings Pot on Monzo’s Savings Marketplace which provides savers with a wealth of Easy Access and Fixed Term options they can choose from Monzo’s savings partners.
Similar to other pots from Monzo, customers can decide to schedule deposits, turn on Roundup payments or lock their Pot until a chosen date.
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TS Anil, Monzo’s CEO, broke down why the digital bank has decided to launch this savings product at this moment in time.
He explained: “We’re thrilled to bring our first Instant Access Savings product to market. Developed with customers, it’s designed to give everyone the flexibility to grow their money and access it whenever they need to.
“We’re excited to get this into the hands of customers who we know are using Monzo’s powerful saving and budgeting features more than ever to make the most of every penny.
“Our mission is to make money work for everyone – and amid the cost of the crisis our ambition is to make money work even harder.”
In order to open an Instant Access Savings Pot, customers will need to go to their Account tab or Overview in their Monzo app and hit Create Pot.
At this point, they can select ‘Savings’ and choose Instant access. Savers can then name their pot and pick an image.
The bank will outline how the savings pot works and will ask savers to agree to some terms and conditions.
Once this has been completed, customers can then make their first deposit or choose to come back to this step later on.
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Savers are currently having to deal with the ongoing cost of living which has seen inflation and energy bills skyrocket.
To control the impact of inflation, the Bank of England has raised interest rates which has been passed onto high street and digital financial institutions, such as Monzo.
However, with inflation sitting at 10.1 percent, savings accounts are unable to directly compete even with the wave of rate hikes.
As a result, many bank customers are still experiencing diminishing returns from their savings accounts.
Alice Haine, a personal finance analyst at BestInvest, shared what the current state of affairs are for savers in the UK.
She added: “The big positive with interest rate rises is that savings rates have also jumped significantly in recent months, but with inflation still high, any real return on cash held in a savings account is still deeply negative.
“It is still a good idea to move money languishing in an account with an ultra-low interest rate to one offering better returns such as 3.1 percent for an easy-access account, up to seven percent for regular returns or a competitive 3.3 percent for NS&I’s Premium Bonds from March.
“Sadly, not everyone can afford to take advantage, with many Britons choosing to raid their savings pots rather than top them up to help them cope with higher living costs.”