Is your wallet full of loose change and you have no idea what to do with it? Imagine you had the option to put that money away to stack into surprising savings.
The folks at Moneybox have developed a digital method. Whenever you use your card, the app will round up your purchase price to the closest pound and deposit the difference into an investment or savings account of your choosing.
If you normally spend £2.50 on your morning coffee, Moneybox will round it up to £3 and save the extra 50p on whatever you want. This robo-esque option (-Top Robos Guide-) lets you adjust the amount saved from 50p to £1, for instance.
The goal is to amass a useful sum of money from your spare change over time, with the help of compound interest, so that you end up saving money even as you spend.
Continue reading our Moneybox review — find out if it’s for you!
Positives ✔️ – Great for beginners, save money while spending, a breeze to set up, possibility of good profits.
Drawbacks X – Only allows UK users, expenses can be high, money transfers are currently unavailable, much less useful for investing than saving.
Moneybox Features
- The minimum deposit for a savings or investment account is only one pound.
- A variety of investment accounts are available, including Stocks and Shares ISAs, and General Investment Accounts.
- There is a wide variety of savings accounts available, including the traditional “basic saver,” the “32-day,” the “45-day,” the “95-day,” and the “120-day” accounts.
- As well as Long-Term Individual Retirement Accounts. Save money in retirement by rolling all of your pensions into one convenient place: a Moneybox Personal Pension.
- The mortgage experts at Moneybox can help you get a loan.
- Put your money to work for you by accruing interest on your savings.
- Spending can be rounded up, with the extra money put into savings or investments.
- Calculators and Tools That Can Help You Out: Find useful tools like the mortgage calculator and ISA time machine.
- Moneybox is authorised by the Financial Conduct Authority, so you can be certain that your transactions are secure. If you use Moneybox to save or invest money, you have up to £85,000 in protection from the Financial Services Compensation Scheme.
How Does Moneybox Work?
Moneybox requires account holders to be 18 or older. For a pension, a Lifetime ISA, or a Stocks and Shares ISA, you'll also need a national insurance number.
If you wish to establish a Junior ISA for a child or relative under the age of 18, you'll need to use a different app.
Many of Moneybox's features are described in detail on the service's website, but you'll need a mobile to actually access and utilise the app. This is due to the fact that transferring funds across accounts requires that software.
After installing the software, users are prompted to provide personal information such as name, email address, password, mobile number, and birthdate. The next step in using Moneybox is verifying your email address and establishing a PIN of your choosing between 4 and 6 digits. Picking a savings or checking account is the first order of business.
Clicking the helpful question marks will take you to articles covering topics like “what’s the best account”, and the Moneybox support staff is available Monday through Sunday from 9-5.
After settling on an account type, pick how to fund it: whether via deposits, round-ups, or a hybrid of the two. You just need £1 to get going. The software provides a list of financial institutions that users may sync with.
You'll need to provide Moneybox permission to access your account to use its features, but most of them are there. You will be instantly connected if you have the bank's app installed on your phone; otherwise, you will be prompted to input your account information.
After linking your account, you'll need to establish a direct debit to transfer funds from your bank to your selected Moneybox offering.
Using Moneybox 💻
While you might not want to use this as your go-to stock trading app, in addition to being able to make deposits, Moneybox skillfully allows you to keep track of your spending and see how much you can round up your transactions to.
When tracking your spending across all of your linked bank and credit card accounts, Moneybox will automatically determine the amount to round up to.
By default: every Wednesday at noon, the Moneybox app will automatically deduct the savings that week in total comprised of deposits and/or round-ups from the connected bank account you have specified. After two days, all transactions will be rounded up to the nearest dollar. Or you can adjust the configuration to round only certain transactions on particular days of the week to do so whenever you want.
Moneybox allows you to set up many services in each account, so you may split your purchases and rounding between a savings option, ISAs, and pensions. Banks such as Halifax, RBS, Starling, American Express, Virgin, and many more are supported by Moneybox for round-ups.
Key Offerings
And what does Moneybox provide, exactly? The idea behind Moneybox is straightforward; the programme serves as a digital equivalent of a traditional piggy bank. People may put their spare change toward investments they wouldn't think they could afford otherwise. It's designed for folks who think they can save a little bit each week and eventually have a useful nest egg.
The next time you make a purchase, the app will automatically round up your purchase to the closest pound and invest your spare change.
If you use your credit or debit card to buy goods costing £6.50, the Moneybox application will round the amount up to £7. The rounding-up feature displays £7 on your bill while setting away 50p for investment.
Think of it as a “virtual piggy bank” into which you may deposit your loose change after each purchase; the distinction here is that your coins will also pay you a profit.
The price may seem little at first, and it’s typically only best to invest once you have a certain threshold of savings, but the firm claims that, after a year of consistent use, the customer can have saved a sizable amount of money.
Savings Plans
Create a savings account via the app to automatically round up your transactions every two days, or you can choose to do it yourself by adding a lump sum amount on a weekly or monthly basis. In the app's settings menu, you may choose whether you want your transactions to be rounded up automatically or manually.
When your weekly savings target is reached via these round-ups, the whole amount will be instantly transferred to your chosen investment account. It may be argued that weekly direct deposits and the practice of saving a little percentage of each purchase are essentially the same thing. Although consistent saving is the goal, there will be nothing to invest in if the money in the account is spent throughout the week.
Savings accounts
✔️ Simple Saving History
(No New Customers Accepted at This Time).
The Moneybox Simple Saver, with an AER of 2.00%, became live in early 2021. Daily interest is added to your balance on the first of the month. Shawbrook Bank, the product's issuer, is covered by the Financial Services Compensation Scheme in the event of insolvency, so your funds are protected. Withdrawals are processed the following business day and are capped per month.
✔️ 32-Day
The 32-day notice fund is a relatively new feature of Moneybox savings. If savers can wait a bit over a month, they will earn an annual comparable rate of 2.22%. You may open an account with as little as one pound and collect interest monthly, with interest computed daily.
Since the product is offered by Investec, customers are covered by the FSCS. You should know that after you request a withdrawal, you'll have to wait 32 days before you can get your money.
✔️ 45-Day
In case you're looking to earn a little more interest on your cash and can bear to leave with it for 45 days or more, you may be interested in a 45-day notification account that offers an AER of 2.68%. The interest on this item accrues every day and is credited to your account monthly.
Since Charter Savings Bank is the supplier, customers are covered by the FSCS if they purchase this product. To withdraw funds from the savings account, you'll need to wait 45 days.
✔️ 95-Day
Put your loose change into a 95-day notice saving account with an AER of 2.32%. Daily interest is added to your account on the first of the month. Because Investec is the item's supplier, your cash is protected in the event that the company fails thanks to the Financial Services Compensation Scheme (How does the FSCS work?). To withdraw cash, you'll have to wait 95 days, which is a lot of time if you're in a bind and need the money right now.
✔️ 4-Month
Moneybox also provides a 4-month notice account with an AER of 2.94%. Daily interest is computed and sent into your Moneybox account monthly, just as with any of their other notice accounts. Customers of Shawbrook Bank, which offers the Moneybox 4-month notice account, are also covered by the FCSC in the event of the bank's insolvency.
If you think you may need access to your money sooner than 120 days, you should probably check at the instant saver instead. The interest rates on Moneybox Notice Accounts are attractive in comparison to those of other notice programs on the marketplace; nevertheless, they are not the greatest and are subject to change at any time.
✔️ Lifetime ISA
Moneybox also provides its own Cash Lifetime ISA for people looking to save for retirement or a first home. Cash in on tax-free growth and the government's 25% monthly Lifetime ISA bonus by putting your spare change in a Moneybox Lifetime ISA.
Your rounded-up purchases will be invested in one of the available portfolios, much like a Stocks & Shares ISA. Only people under 40 are eligible to start an account, however, contributions may be made up to the age of 50. In addition, the maximum annual investment limit is £4,000, while the maximum annual government incentive is £1,000.
Your only options for utilising this product are to (1) save for your first house or (2) fund your retirement. Withdrawals for purposes other than retirement or a first home will incur a 25% government fee.
Moneybox's Lifetime ISA has an annualised percentage yield (AER) of 3.50%, made up of an initial year's bonus rate of 0.75% on top of the standard 2.75% AER. The Financial Services Compensation Scheme insures the Moneybox cash Lifetime ISA (FSCS). With the government incentive of 25%, you may save up to £4,000 every tax year and have an extra £1,000.
Contrasted with the notification account, the LISA has various restrictions. Only persons aged 18-39 are eligible to open a LISA, and they must be saving for a first house or retirement.
If you've kept your Lifetime ISA open for at least a year, you may use the funds to put down a deposit on a home in the United Kingdom worth up to £450k. A 25% government fee is applied to withdrawals made for purposes other than retirement or a first home.
If you opened a Moneybox Cash LISA on or after August 17th, 2020, your bank will be Santander. OakNorth bank will give it if you joined up before April 23, 2020; Investec will provide it if you signed up between April 23, 2020, and August 17, 2020. Once again, the FSCS insures all of the institutions that Moneybox works with.
Investment Accounts 📖
Investment choices in Moneybox are flexible using ETFs rather than stock investments, as you’d expect. All accounts have distinct features and invest in various tracker funds, but you must be 18 years old to open one. Here are the types of investment accounts available on Moneybox include:
General Investment Account
With a General Investment account, you’re able to put your money in any of the available investment portfolios. The returns aren't tax-free as they are with an ISA, but the weekly cap is much higher at £85,000.
The earnings from this account are subject to taxation in the same way as those from any other investment account. Investment savings account (ISA) for stocks. Each individual may deduct £20,000 from their yearly taxable income to put toward investments.
Stocks & Shares ISA
Offers tax-free growth on annual contributions up to £4k, with a 25% government match for retirement or a down payment on a property. If you open a Moneybox Stocks & Shares ISA, you may put the maximum £20k in tax-free savings.
Depending on how much you're willing to take a chance, your round-ups may grow tax-free in a conservative, balanced, or daring investment portfolio. Moneybox does not provide advice, therefore investors must familiarise themselves with the details of their investments by reading the essential investor information papers and portfolio descriptions.
Young Investors
There is also a Junior ISA variant so you may create a tax-exempt pot from your savings that your kid can access at age 18. In every way, it may be used by children. This gives tax-free gains but the money is locked until the time they reach 18.
SIPPS
Moneybox enables you to create and invest in a Self-Invested Personal Pension (SIPP) as well. These profiles are open to UK taxpayers who are at least 18 years old. Customers are needed to enter their national insurance number to open these. But this is not required to open a GIA account.
Mortgage Advice
The Mortgage Advice Bureau and Moneybox have collaborated to provide a new, free mortgage advice service, which is available only via the Moneybox mobile app.
It is presently accessible to all Moneybox subscribers.
First-time homebuyers, remortgage candidates, and those in the market for a new residence may all benefit from the expert mortgage guidance provided by Moneybox. All Moneybox customers will have access to a mortgage application process inside the app at no additional cost.
Mobile App: Good
Because Moneybox is a smartphone-only service, you must first get the Moneybox app from the appropriate app store on your mobile device. That’s why they excel here. Receive the URL sent to your mobile straight from the site and begin.
At the time of registration, you'll be asked to choose the method through which the account will be paid. The app involves 3 choices: weekly deposits, roundups, or lump-sum deposits. In case you pick the round-ups option, you need to submit your financial data such as online banking, debit card or credit details.
Creating an account is simple, and once you have one, you can quickly monitor your progress toward your weekly goal right from the app's main screen. Support is available by email or Live Chat Monday through Friday, 9 a.m. to 5:30 p.m.
Fees for Investments…
Investment charges: Moneybox has a yearly platform fee of 0.45 per cent of your total investment value. Every month, this sum may be automatically debited from your account. The annual rate might be anything from 0.12% to 0.30%.
But the standard monthly charge for all services: The fee of £1 monthly comprises all activities and investment fees. Considering this is a micro-investment tool, fees can be relatively high (not for saving, which is essentially free). Your biggest stake is instantly liquidated at end of the month.
Moneybox is an almost free online savings account that will not charge you any fees for using the account.
It costs £1 per month to subscribe to Moneybox after the first three months are free. If you have more than one investing account with Moneybox, your monthly membership charge will still be less than £2.
In addition to the monthly membership cost you will additionally be charged a 0.45% platform fee for investment accounts. Monthly payments are required to cover the daily accrual of this charge. Fund provider fees might add an additional 0.12% to 0.58% to your investment costs.
For those with a Moneybox pension, the yearly platform cost is 0.45% for amounts up to £100k and 0.15% for balances beyond that threshold. In addition, the costs charged by the fund's provider might vary anywhere from 0.15 per cent to 0.58 per cent, or from 12 per cent to 30 per cent.
How Moneybox's Investments Fare 💸
Since Moneybox was first released in 2016, it lacks a proven track record. It is normally better to measure results after three years or perhaps five for individuals with a more long-term investing plan. However, the app has monitored the performance of its portfolios from the time that £1,000 was deposited in 2012 and monthly payments of £50 were made up until the start of 2022.
For your £9k, the conservative portfolio would have returned 15.6% in 2016, grown by 3.8% in 2020, and 5.0% in 2021. As for cash invested in balanced portfolios, those would be valued at £13.6k. Those that took more risks with their money would have ended up with £14.8k more in their portfolios by the year 2020. Investment returns were 22.5 per cent higher in 2021.
Moneybox Safety
Does Moneybox provide a secure environment?
Because it is subject to standards regarding openness and fair treatment of clients, Moneybox must do so in order to be in good standing with the FCA. Moneybox offers Open banking technology that protects its customers' privacy by never storing their banking login information. Therefore, if you utilise the round-up function, Moneybox will never have access to your personal banking information.
If you want to make cash investments then your money is of course in danger, as with any investment, from stock market movements. However, savers and investors still have up to £85k protected by the FSCS in the event of the insolvency of their fund or savings account provider.
After going into some research on Moneybox's internal complaints process, you may take your case to the Financial Ombudsman Service if you're still not satisfied.
Moneybox customer reviews
More than 250k people have used Moneybox, so there is plenty of opportunity for both positive and negative feedback. Over 1,300 users have reviewed Moneybox, giving it an average rating of 4.6 out of 5 stars. The vast majority (78%) of users think it is good. Users remarked on how simple it was to get going, and how helpful it has been as a first step into the world of saving and investing.
The app has gotten some unfavourable reviews, with 9% rating it as horrible and 3% as poor. Most gripes tend to be around the restrictive time windows for cash to be invested, poor savings and interest and other particular difficulties regarding certain aspects of withdrawals. But before we round off our Moneybox review, let’s look at alternatives:
Competitors to Moneybox
Moneybox Compared to Nutmeg
Investors who rely on financial advisor bots, rather than pure savers, are Nutmeg's target audience. You may open a Stocks and Shares or Lifetime ISA, General Investment account, Junior ISA or a SIPP. It employs exchange-traded funds and provides a selection of portfolios tied to your attitude to risk.
Nutmeg goes somewhat further than Moneybox as users must complete a questionnaire that establishes their risk level rather than having to decide for themselves. You may also establish a goal and time horizon with the investment accounts on Nutmeg and monitor how well you are following it.
The minimum investment for Nutmeg is greater than Moneybox’s. When you create an ISA, general investment, or pension pot, you'll need £500 to get started, whereas a Lifetime ISA or Junior ISA will just cost you £100.
Nutmeg has a broader selection of portfolios and risk ratings, although its costs may be higher for larger investments.
The average cost of the investment funds in a fixed allocation account with Nutmeg is 0.19%, with fees of 0.45% for the first £100k and 0.25% for everything after that. Its fully managed option costs 0.75% up to £100k and 0.35% after that offering average funding fees of 0.20%.
See our Nutmeg review.
Moneybox Compared to Moneyfarm
In the same vein as Nutmeg, Moneyfarm is primarily intended for investing rather than saving. This robo-adviser offers a choice of holdings of exchange-traded funds based on your responses to a set of questions that analyses your attitude to risk. It provides a Pension, ISA and General Investment account however there is no Lifetime ISA.
Moneybox has a £1 minimum to open an account, whereas Moneyfarm requires £2.
A Moneyfarm ISA, investment account, or pension plan requires a minimum initial deposit of £500 and a minimum monthly direct debit of £100.
See our Moneyfarm review.
Moneybox Compared to Plum
Like Moneybox, Plum helps you save and invest money. You may download the app, and it will automatically analyse your transactions, determine your normal income and expenditures, and set away an amount that is within your budget. Like Moneybox, this goes straight into a secure online bank account, making it possible to save money without any outside help.
Making an Easy Access pocket in Plum is free, and you may earn interest of up to 1.95% on your savings. The average management and provider fee for an ISA investment is 0.48% (consisting of a 0.15% management fee and fees from 0.06% to 0.90% from the ISA provider). The yearly fee for an ISA investment is £1. More than 10 funds, ranging in risk profile, are available to Plum's clientele.
See our Plum review.
Moneybox Review – Verdict: Handy Saver
Moneybox is the simplest method to start saving. As for investing, this may be a stretch. Used over time it might help you to try out building up a portfolio. Moneybox may not be the greatest option for larger portfolios, but ISA accounts are ideal for this reason. Though the app inculcates the habit of saving money it becomes a costly decision as the fees may eat into your earnings.
Moneybox is the simplest method to start saving. As for investing, this may be a stretch. Used over time it might help you to try out building up a portfolio. Moneybox may not be the greatest option for larger portfolios, but ISA accounts are ideal for this reason.
Though the app inculcates the habit of saving money it becomes a costly decision as the fees may eat into your earnings.
In case you wish to invest a greater quantity of money, there are alternative platforms which charge you fewer costs and may give better returns as well. But if you're having trouble putting away any money, this app might be a lifesaver.
While the Moneybox app is simple to use, it doesn't provide much guidance when it comes to your motivations for investing, which may have a significant impact on how much you need to save and how you should go about doing it. Inconveniently, money cannot be transferred between accounts, and a dedicated app is required to open a Junior ISA.
Moneybox is an excellent start to saving for a small rainy day, but, investing little sums means it will take a long time to earn a meaningful return and the fund costs will be rather heavy until you are putting away a more substantial quantity. Wealthify is a good option for Individual Savings Account (ISA) investing since there is no minimum investment and no ongoing fees.
Moneybox is straightforward to set up and use and will get you acquainted to diverse financial products as well as the valuable habit of putting money aside regularly. If you're simply putting aside a modest amount each month, you shouldn't count on this as your main or long-term savings or investment option.
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