🔔 Monzo, the app-only bank, announces a new range of savings accounts

Although it already has an easy access ‘savings pot’ account via Investec Bank paying a rate of 1% gross/AER, now closed to new busines, Monzo - the bank that is only available via an app - is due to launch a series of new savings accounts in partnership with OakNorth.

The good news is that there will be a wider range of accounts available, including cash ISAs as well as standard savings accounts.

The less good news is that the rates on offer are lower than those available if you were to take out the same type of account directly with OakNorth.

That said, the rates are far better than most current account customers would expect to achieve with their high street bank. As we know, many savers leave their funds languishing with their current account provider for simplicity, with easy access rates as low as 0.15%.

How do the Monzo savings accounts compare?

The accounts (in partnership with OakNorth) that are available via Monzo are as follows;

Standard Savings Accounts - on balances of £500 to £500,000

Monzo - Easy Access paying 1% AER on balances of £500 to £500,000

• Best alternative easy access account is Kent Reliance's Online easy access account - issue 33, paying 1.50% AER

Monzo - Six month fixed rate account paying 1.36% AER

• Best alternative is via OakNorth directly, paying 1.76% AER

Monzo - Nine month fixed rate account paying 1.46% AER

• Best alternative is via OakNorth directly, paying 1.81% AER

Monzo - 12 month fixed rate account paying 1.53% AER

• Best alternative 12 month fixed rate bond is Shawbrook Bank's 1 Year Fixed Rate Bond Issue 58, paying 1.97% AER

Cash ISAs - on balances of £500 to £20,000

Monzo - Easy Access Cash ISA paying 1.14% AER

• Best alternative easy access cash ISA is Paragon's Limited edition easy access cash ISA issue 5, paying 1.45% AER
• If you have a Santander 1|2|3 account you could open the Santander 1|2|3 eISA (Issue 5) paying 1.50% AER

Monzo – 12 month fixed rate cash ISA paying 1.38% AER

• Best alternative 12 month fixed rate cash ISA is via OakNorth directly, paying 1.78% AER

Where is my money actually saved?

Although you can open and manage your Monzo savings accounts via the Monzo app, your cash will actually be held with OakNorth and it will be protected by OakNorth’s Financial Services Compensation Scheme (FSCS) licence.

This means if you hold other accounts with OakNorth, you need to look at the total held, including the amount via Monzo. If more than £85,000 is held in total, then some of your money will not be protected, should the worst happen and OakNorth was to fail.

It’s great to see a current account provider offering its customers access to savings accounts that, in general, are paying far more than the traditional high street banks.

But for those who are more digitally minded – like Monzo customers – if you are prepared to spend a little time opening savings accounts online, far better rates can be found - take a look at our best buy tables for more information. And by using our Rate Tracker service, you can keep up to date with where your savings accounts are held and the rates of interest you are earning.

You might also like...