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Digital bank Monzo has launched a savings option to users of its current account service. Its new savings account pays 1pc interest a year, and savers need £1,000 to open one. Interest is paid monthly.
Cash held in the “savings pot” will take a day to transfer back to a Monzo current account. The Monzo current account pays no interest but gives instant access to funds. Monzo is rolling out the savings option to users in stages.
The savings pots are backed by Investec, the bank, which will hold savers’ cash and pay the interest.
Marcus, the new savings brand from Goldman Sachs, currently pays the best interest rate for an easy-access account, at 1.5pc.
A statement from Monzo said the firm wanted to team up with other banks to launch more deals, such as savings deals with higher interest rates.
Monzo has more than one million customers and accounts for 15pc of all new bank accounts opened in Britain. This week it raised £85m from investors, taking its valuation to more than £1bn.
The digital bank is based around a smartphone app. The app can analyse your spending, allows users to instantly block their card and offers good exchange rates.
Savers’ cash is protected up to a value of £85,000 by the Financial Services Compensation Scheme, a lifeboat fund.
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