Monzo customers will soon be able to open a savings account via their mobile apps, after it struck a partnership with fellow UK fintech OakNorth.
A range of different “savings pots” are set to be launched by the challenger bank, offering it’s 1.6 million UK customers a choice of interest rates, ranging from 1% to 1.53% annual equivalent rate (AER).
Monzo CEO Tom Blomfield said: “ISAs and higher interest rates on savings are something our customers have been asking for, so we’re really excited to be launching them in time for the end of this tax year.
“Partnerships like this one are part of our plan to give customers more choice and control over their money.”
What is the Monzo savings account interest rate?
Launching on Monday, the first savings product to be made available will be an easy-access cash ISA earning 1.14% AER, giving fleet-footed customers the chance to make deposits before the end of the tax year on 5 April.
The other accounts, which include easy-access and fixed-term options, will be rolled out over the following weeks.
“We want to give our customers access to a wide range of products and services from across the market, so they can choose what works for them and maintain an overall view of their personal finances,” added Mr Blomfield.
Minimum deposit amounts will be £500, with a maximum total balance across all savings pots of £500,000, and the normal £20,000 limits applying to the ISAs each tax year.
Previously, Monzo customers have been able to store money in a “normal pot” that is good for setting aside smaller amounts of cash, but doesn’t pay interest.
The digital challenger will receive a small revenue percentage from the new products, and also plans to partner with other savings providers in the future as its expands its product range.
Monzo partners with OakNorth to offer savings account
To facilitate this new savings feature, Monzo has partnered with UK-based digital bank OakNorth, which specialises in SME lending but also has a portfolio of personal and business savings accounts.
OakNorth COO Amir Nooriala said: “Since our launch in September 2015, we have proven our ability in the UK savings market, providing tens of thousands of British savers with the opportunity to make a better return on their savings.
“Through this partnership with Monzo, we’re opening up the marketplace for the millions of savers who could benefit from better rates, while also giving them the added benefits of ease, convenience and usability that come with managing their money in one place.”
OakNorth recently secured a $440m (£332m) investment from SoftBank Vision Fund and the Clermont Group – taking its overall backing past $1bn (£755m), which is more than any other European fintech.
It also won the award for best online savings provider at the Moneynet Personal Finance Awards 2019.
The full range of Monzo savings accounts
Monzo will be rolling out several new savings accounts over the coming weeks. These are:
- An easy-access account offering 1% AER
- A six-month fixed-term account offering 1.36% AER
- A nine-month fixed-term account offering 1.46% AER
- A 12-month fixed-term account offering 1.53% AER
- A personal easy-access cash ISA offering 1.14% AER
- A personal 12-month fixed-rate cash ISA offering 1.38% AER
