Newcomer dozens is more than just a current account and app. Here’s how things are looking so far.
dozens is all about saving money and making it profitable. And yes it is a lower-case “D”.
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It’s still in the development phase, but we’ve looked at what dozens is planning to offer and whether it seems to be worth your while compared to the competitors.
What is dozens?
dozens offers a current account that helps to grow your money, encourage saving and eventually investing. It aims to offer a whole range of financial services, including:
- A current account. dozens does not hold a full banking licence yet, so it won’t be a full UK account, at least for now. But it will have an account number and sort code.
- A card. dozens says it has started giving the first cards to people on the waiting list. They’re Mastercard and a very bright yellow.
- An app. It looks bright and clean and has a personalised dashboard.
- Spending report features. It will visually show your spending according to location (showing it on a map), category and size.
- Budgeting features. You’ll be able to save automatically by setting your own personal rules (such as “save £2 every time this person tweets” or “every time it rains”) and dozens will occasionally encourage you with cash prizes.
- A savings product. dozens calls them “Cash Savings” – basically, you’ll be able to set money aside regularly, according to a set of rules you decide. You won’t earn any interest on it, but you can transfer it back to your main account anytime.
- An investment bond product. It’s already listed on the NEX stock exchange, the bonds will be £100 each and earn a 5% annual interest rate, paid monthly (more on this below).
- An investment account. dozens will also allow you to invest your money if you want to, although it isn’t entirely clear how this will work yet.
dozens says it has a comparatively unconventional team, at least as far as banking startups usually go, with women comprising 75% of the team and all coming from very different backgrounds.
CEO Aritra Chakravarty talks about how dozens is trying to innovate banking
How does dozens work?
If you’re interested in dozens, what you can do for now is download the app, which is available both for Android and iOS, sign up and register for the waiting list. Until dozens officially launches or you make it to the top of the waiting list, you won’t be able to actually get a card and use it.
At the end of 2018, dozens had almost 2,000 people on its waiting list. People who joined the waiting list and then go on to open an account with dozens will receive £10 in their account as a thank you for their interest and support early on.
At the end of February 2019, dozens did a trial crowdfunding of its 5% bond – it says it issued 62 bonds for a total value of £91,000. dozens is planning a second one, but hasn’t said when it’ll be launched yet.
How does dozens’ 5% bond work?
When you’re promised a 5% annual interest rate, it’s difficult not to be interested in it, isn’t it? Such a high return usually comes with high risks, but dozens says your money and the interest will both be moved to a trustee account, where dozens won’t be able to touch it any more.
Does it mean that the investment bond is completely risk-free? Well, yes and no. You’re still investing money in a startup, and there’s always a risk it may go bankrupt. However, dozens is a fully licensed investment firm, so it says that if things were to go wrong, your investment would be protected up to £50,000 by the Financial Services Compensation Scheme (FSCS).
The bonds last 12 months – so, after one year, you’d be due all your money back.
If all this sounds good to you, you can download the app and subscribe to the waiting list. When the crowdfunding is open, you’ll be able to bid for the bonds; your offer will have to be a multiple of £100.
dozens says it prioritises small savers – once the “booking” period is over, it allocates the bonds starting from the smaller bids and going up until it finishes its monthly availability. In practice, this means that the lower you bid, the more likely you are to actually get the bonds.
dozens’ pricing and fees
There isn’t much information on this right now.
The idea behind dozens is that it’ll make money only when you make money, by keeping “a smaller share” of the returns and passing on “the majority to you”. This basically means that dozens will charge a fee on investment, while the other products (current account and app, savings account and so on) will come for free.
The fee on investments will be made of two parts:
- Management fee. This is how dozens is planning to make money – by keeping a percentage of the assets customers will be investing with them. If you’re not making any money out of your investment, the fee won’t be charged.
- Funds fee. dozens says it will invest your money in “a number of carefully selected ETFs/ETCs/open-ended funds which are generally low cost”. Those funds will charge a fee that won’t be included in your annual management fee.
dozens has confirmed that the 5% bond, instead, will come with no fee attached.
Is dozens safe?
dozens is not a bank. It is, however, regulated by the Financial Conduct Authority (FCA) as an e-money institution. This means it can offer a range of financial products with different levels of protection.
Customers’ current account money will be held in a segregated account, so that if things were to go wrong, the money couldn’t be used to repay dozens’ creditors.
As far as the Financial Services Compensation Scheme (FSCS) goes, dozens provides different levels of protection, depending on where you keep your money:
- Current account. The deposits on your current account will not be protected by the FSCS, so they won’t have the same level of protection that fully-licensed banks provide.
- Savings. The money you save and put aside in dozens’ savings accounts will be protected by the FSCS – dozens says it’ll move it to a Bank of Scotland client account that has the usual FSCS protection up to £85,000.
- Investment products. As an investment firm, dozens is fully licensed, so you’re protected up to £50,000 by the FSCS against poor investment management or default. This also applies to dozens’ fixed-rate bond. However, don’t forget that if the companies you’ve invested in go bust, you won’t enjoy any protection – that’s part of the investment risk.
dozens pros and cons
- Free (or so it seems)
- Brings together day-to-day banking, saving and investing
- Competitive interest rate on the bond
- Cash prizes when you save money
- App looks smart and clean
- Hasn’t launched yet so a lot of information is still missing
- Will it deliver?
So far, so good. For now, dozens looks quite good, especially when it comes to saving: if you know the market a bit, you’ll have quickly realised that a 5% annual interest rate is pretty much unheard of. Also, the idea of bringing together so many different features sounds definitely interesting.
However, the big challenge lies ahead. Will dozens deliver? Will it be able to make enough money to be sustainable and at the same time keep offering the same favourable conditions to its customers? Much remains to be seen, but for now, if it appeals, it’s probably worth subscribing to the waiting list to keep your options open.