Round up everyday purchases and invest your spare change.
Moneybox will round up your purchases to the nearest pound and invest the extra cash into a Stocks and Shares ISA. Moneybox want to make investing more accessible, while giving customers the opportunity to grow their money.
Read on to find out more about Moneybox and whether it is the right option for you.
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What is Moneybox?
Launched in 2016, Moneybox is an investing app that aims to make investing simple and accessible to anyone.
With as little as £1, you can invest in companies like Amazon, Netflix, Apple, Nintendo, Unilever and Disney via Moneybox’s tracker funds.
It takes the whole investment process out of your hands too. All you have to do is spend and the app will round up your purchases to the nearest pound and invest the spare change. Or you can deposit lump sums weekly or monthly yourself.
By connecting a spending card to the Moneybox app, you can set up a Stocks; Shares ISA, GIA or Junior Stocks; Shares ISA from your mobile phone in a couple of minutes. This gives those with little or no investment experience an easy starting point.
How does Moneybox work?
The streamlined smartphone app gives everyone the opportunity to invest by following a few simple steps:
- Connect a card: To begin you’ll need to connect a spending card to your Moneybox app.
- Save as you spend: Moneybox will enable you to round up the spare change from purchases such as your morning coffee or bus fare.
- Invest your spare change: It can then be invested in thousands of global companies via tracker funds.
- Invest: You can also contribute via one off payments or weekly deposits.
- Select your starting option: Choose from cautious, balanced or adventurous. The options are made up of different ratios of the same three tracker funds – a cash fund, a global shares fund and a property shares fund.
- Automatic withdrawals: Every Wednesday at midday your money is taken by direct debit and invested in your ISA, your General Investment Account, or your child’s junior ISA.
How do Moneybox roundups work?
With Moneybox roundups you can regularly squirrel small amounts of money away. As the name suggests, it rounds up your transactions to the nearest pound, before putting the spare change in a savings pot.
If you buy a £2.60 coffee, for instance, it will round the transaction up to £3 and then put the spare 40p in your “digital piggybank.”
Your round ups will be automatically calculated every two days. Or you can do them manually. Head to the account section in the app and choose between the automatic or manual round up options.
All these round ups will build up in your Weekly savings total, which you can see as a blue circle on your home screen. At midday Wednesday, this little savings pile is taken by your pre-arranged direct debit and invested in your ISA or GIA, or your child’s junior ISA.
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Moneybox’s other products
Aside from personal investment you also select to invest in a Junior ISA or a Lifetime ISA
Junior ISA: A Junior ISA is a savings and investment account for children up to the age of 18. It is an efficient way to save or invest towards your child’s future as it is free from any income or capital gains tax. Money can only be withdrawn by the child after they reach the age of 18.
Lifetime ISA: With the Lifetime ISA, you can pay in up to £4,000 per year and you get a 25% government bonus on all savings. That means for every £4 you save, you get £1 for free. If you pay in the maximum £4,000 you’ll receive a £1,000 bonus. Savings can then be used either to buy your first home or for retirement.
Moneybox’s fees and limits
- Fixed Subscription fee: Free for the first three months, £1 thereafter. Charged monthly.
- Platform fee: 0.45%. Charged annually, billed monthly.
- Fund provider fees: 0.23% average. Charged annually, billed monthly.
Is Moneybox safe?
As with all investing, the value of your investments are subject to rise and fall. It is important to know that there is some risk involved. You could get back less than you invested.
Moneybox is FCA authorised and covered by the FSCS. So if it were to go bust, your investment would be protected up to £50,000. However, this does not protect your money if investments fall in value.
Moneybox use 256-bit TLS encryption for all your personal information and will never share any of your details with third parties without your consent.
Pros and cons of Moneybox
- You can withdraw some, or all, of your money at any time, using the app, as long as that amount has fully settled.
- The app is simple, making it easy to save and invest
- You could see a greater return than if funds were stored elsewhere.
- You are able to select a preferred risk level – cautious, balanced or adventurous.
- Great for individuals with no experience in investing.
- Safe and secure, FCA authorised with 256-bit encryption protecting your personal details.
- If you have online banking, a national insurance number and £1 to spare, it takes a few minutes to invest.
- Your capital is put at risk.
- The charges could be an issue for those starting out with small investments as fees could be higher than monthly profits. You might make more money with a high interest current account.
- It can take time to see any substantial return on savings.
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