What's in this review?
- What is Moneybox?
- How does Moneybox work?
- How do Moneybox round ups work?
- Which types of investment account does Moneybox offer?
- General investment account
- Moneybox ISAs
- Moneybox pension
- How does Moneybox invest my money?
- Moneybox ethical investing
- Moneybox savings accounts
- Should I get an investment account or a savings account?
- Moneybox fees
- Is Moneybox safe?
- Pros and cons of Moneybox
- Moneybox customer reviews
- Moneybox alternatives
- Our verdict
- Frequently asked questions
What is Moneybox?
Moneybox is a saving and investing app that aims to make both of these things a seamless part of everyday life.
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 as normal and the app will round up your purchases to the nearest pound and invest the spare change. Or you can deposit lump sums on a weekly or monthly basis into the Moneybox account yourself.
By connecting your bank card to the Moneybox app, you can set up an investment account 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:
- Open an account. To begin you’ll need to open an investment account with Moneybox. You have a range of account options to choose among – details below.
- Connect a bank card. You’ll also 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.
- Top-up your investment budget. You can also contribute to your investment account via one-off payments or weekly deposits.
- Select your starting investment plan. Choose from “cautious”, “balanced” or “adventurous”. More on how these risk profiles work is below.
- Automatic withdrawal option. Every Wednesday at midday your money can be taken by direct debit and invested.
How do Moneybox round ups work?
With Moneybox round ups 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 £2.40 coffee, for instance, it will round the transaction up to £3 and then put the spare 60p 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 account.
Which types of investment account does Moneybox offer?
Moneybox’s investing offer is quite thorough. You can choose among the following:
- General investment account (GIA). This is a standard investment account. You’ll pay taxes on what you earn, but only if you make profits over your capital gains allowance (£12,300 for the 2021/2022 tax year).
- Stocks and shares ISA. You can invest up to £20,000 a year and won’t be charged any tax on your profits. More on how these products work in this guide.
- Stocks and shares LISA. You can invest up to £4,000 a year tax-free and also get a 25% contribution from the government to either retire or buy your first home. There are a few age limitations and withdrawal restrictions to be aware of though, so you should read this guide for a complete overview on how LISAs work first.
- Junior stocks and shares ISA. This is an investment account you can open for your kids. Earnings are tax-free up to the £9,000 annual allowance, but money can only be withdrawn when they turn 18.
- Pension This account lets you save up for your retirement. You can get some tax benefits from the government, but you can’t withdraw until you turn 55.
General investment account
This is Moneybox’s basic trading account. It’s worth noting that you’re liable to pay capital gains tax on any profits over the capital gains tax allowance of £12,300.
You can invest in a range of tracker funds which can get you exposure to thousands of companies. There’s also a socially responsible option if you want to invest more ethically.
Moneybox has a few different individual savings accounts (ISAs). These include your typical stocks and shares ISA, which lets you save up for whatever you want, as long as you have a few years to let the money grow. There’s also the lifetime ISA, for saving for your house or retirement and the JISA, to save for your child.
Moneybox stocks and shares ISA
The Moneybox stocks and shares ISA lets you save up for whatever you want without paying any tax on your investments.
There’s an ISA allowance each year, which is the maximum amount that you can invest in all ISAs combined (cash ISAs, stocks and shares ISAs and lifetime ISAs). The ISA allowance for the 2021/2022 tax year is £20,000.
As with the general investment account, you can invest in thousands of companies through tracker funds. You can invest ethically in the stocks and shares ISA too.
The Moneybox lifetime ISA (LISA) is an ISA that lets you invest towards your first home or retirement. You can invest up to £4,000 per tax year in a lifetime ISA.
The government adds 25% to whatever you put in, so for every £4,000 you invest, you get an additional £1,000 added in from the government. The money has to be spent on either a house or retirement, though. If you withdraw it for anything else, you suffer a 25% loss (that’s what the government added and then some!), so make sure you know what your intentions are before contributing.
We have a whole guide
on LISAs if you want to find out more.
The junior ISA is a savings account that you can set up for your child. It’s pretty much the same as the ISA, here are the key features and things to consider:
- For under 18s
- Has an annual allowance of £9,000 per year
- Choose between cash ISA and stocks and shares ISA
- Separate mobile app
- Other family members and friends can contribute
- The child gets access to the money once they turn 18
- Must be opened by a parent or guardian
- Your child can’t have more than one JISA
You can now also apply for a Moneybox pension account along with an ISA or general investment account. You can move your old pensions to Moneybox, and will then be able to track them in the app, set your investment strategy and keep track of how much they’re earning.
To set up a Moneybox pension, you’ll need to complete the following steps:
- Register with Moneybox. You’ll need to download the Moneybox app and join the pension waitlist.
- Report your old pension pots. If you want to speed up the registration process, you can provide details of the existing pensions you want to transfer into your Moneybox pension. This includes the provider name and policy number.
- Wait for your pensions to be transferred. The Moneybox customer service team will then manage the transfer of your old pensions into your new Moneybox pension, and will update you as they do so.
However, Moneybox won’t accept a pension you or your employer are currently paying into, or any old pensions that provide guaranteed benefits when you retire.
How does Moneybox invest my money?
When you get started with Moneybox, you’ll be asked about your risk profile. Depending on what you choose, Moneybox will apply a different investing strategy. You have three basic options:
- Cautious. A diversified portfolio that includes government bonds and deposits a good chunk of your money into banks and financial institutions that offer competitive interest rates. Only a relatively small percentage of your money goes towards a global shares fund.
- Balanced. Most of your money is invested into a global shares fund, but some is also invested in property companies and bonds.
- Adventurous. The vast majority of your investments goes into a global shares fund, but some funds are still invested in property companies.
You can get more information about Moneybox’s investing strategies at this stage too. If you’re a bit more expert, you can also manually edit your investing strategy and decide which percentage of your money goes into which fund. Don’t do that until you are 100% clear on the risks each fund entails though.
Moneybox ethical investing
If you’re worried about the impact of your investments, you can choose Moneybox’s “socially responsible” option. If you do, the default global shares fund in your investing strategy will be replaced by the Socially Responsible fund, which Moneybox offers in partnership with Old Mutual Investment Group.
When deciding which company to invest your money in, this fund takes into account a range of ethical values, from environmental impact to human rights to transparency. It’s based on what is commonly referred to as ESG (environmental, social and governance) scoring.
The Socially Responsible fund charges a 0.18% management fee, which is slightly higher than the standard global shares fund’s fee (0.12%).
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
Moneybox savings accounts
Moneybox’s savings accounts aren’t directly offered by Moneybox, but by its partners. This means that you can open them from the Moneybox app, but your money will actually be hold by the partner bank.
For now, Moneybox currently offers the following savings accounts:
- A notice savings account. This can be opened with as little as £1. You need to give 95 days of notice before being able to withdraw your savings. The partner bank offering this is Investec. Notice savings accounts are a bit of a hybrid between easy access accounts and fixed rate accounts, and we explain how they work in this guide.
- A cash lifetime ISA. As with all LISAs, you can open it between when you’re 18 and when you’re 39 and add up to £4,000 a year to it until you’re 50. You can only withdraw the money for free when you’re 60 or to buy your first house; if you withdraw it for some other reason, you’ll have to give the government contribution back and also pay a fee. Sounds complicated? You can learn more on how lifetime ISAs work in our dedicated guide.
Should I get an investment account or a savings account?
They’re two very different things, so you should think carefully about what you want to do with your money. Savings accounts’ rates aren’t exactly stellar these days and apps like Moneybox make investing easier, so it can be a tempting option. Here are a few things to take into account:
- Risk. With a savings account, you know from the start how much you’re going to earn in interest (even though it’s probably not much at the moment). If you invest your money, you could earn more, but also lose your capital. That investment disclaimer that says “your capital is at risk” is there for a reason.
- Withdrawals. With savings accounts, whether or not you can withdraw your savings depends on the type of account you get (easy access, notice or fixed term). With investing, you can normally withdraw your money anytime (except with stocks and shares LISAs). On the other hand, investments are meant for the long term, so if you withdraw your money too early you may not make the most of it.
- Fees. Savings accounts are usually free, whereas there are a few fees for investing (in Moneybox’s case, a £1 monthly fee plus platform and fund fees).
- Expertise. Investing may sound scary, although there are actually some fairly easy ways of doing it that don’t require a lot of experience (funds for “beginners” have become more and more common). Still, it’s a bit more complicated (and, depending on how you do it, time consuming) than opening a savings account. You need to be aware of where your money is going, what it’s supporting, how much it’s earning… so if you’re not up for doing a bit of homework, it’s better if you stick to savings accounts.
These are the fees you’ll be charged to use Moneybox for investing:
- Fixed subscription fee. Free for the first three months, £1 thereafter. Charged monthly.
- Platform fee. 0.45%. Charged annually, billed monthly.
- Fund provider fees. Between 0.12% and 0.30%. Charged annually, billed monthly.
There are no fees for opening a savings account with Moneybox.
Is Moneybox safe?
Moneybox is FCA authorised, but is not a bank itself. Customer money in the pensions, savings accounts and ISA accounts operated by Moneybox is actually held by its partner banks. These institutions have full UK banking licences, so are covered by the Financial Services Compensation Scheme (FSCS), which protects individual customer funds up to the value £85,000.
Finally, Moneybox uses 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
- 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.
- You can withdraw some, or all, of your money at any time, using the app, as long as that amount has fully settled.
- 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 only takes a few minutes to invest.
- Savings account options are also available, including a competitive cash LISA product.
- Every time you 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.
Moneybox customer reviews
We carried out a customer satisfaction survey in December 2020. Moneybox customers in the survey gave it a rating of 3.5 out of 5 stars, and 72% would recommend the brand to a friend.
Moneybox customers liked that you can round up your transactions and found that its 10-year forecasting feature was useful for planning. They think that it’s easy to use, innovative and reliable.
A few survey respondents found that Moneybox took direct debits from their bank accounts on unusual days, which took some getting used to, but in general said that Moneybox has very good customer service.
If Moneybox is not up your street, then there are a number of alternative apps on the market to choose from.
Squirrel is a budgeting app designed to help you save money. It does this by taking a personalised overview of your monthly finances, helping you ring-fence what you need to pay bills, set a limit on your optional spending and then save whatever is left.
Squirrel is not a traditional current account, but you will need to get your monthly income paid into it in order for it to manage your finances. You can do this either by transferring the money in yourself from your main bank account or by asking your employer to pay your salary into your Squirrel account.
A subscription for a Squirrel account costs £3.99 a month. You can check out our Squirrel review to learn to more about it.
The Chip app is designed to a be a hassle-free way to save small amounts of money on a regular basis. You connect Chip to your current account. It uses an artificial-intelligence-based algorithm to look at your finances and work out how much you can realistically afford to save.
Chip then moves this money from your current account into your Chip account however frequently you choose – maybe every few days or once a week.
If you don’t want to save anything that week, you can cancel any transactions before they go ahead. And once you’ve reached your ultimate savings goal you can draw that pot of money back out and into your current account.
There’s no fee for downloading and having the Chip app, although it will charge £1 if it sets aside more than £100 for you during a 28-day period. This means your maximum charge over one year could be £13.
Find out more about how it operates by crossing over to our Chip review.
Starling is a British challenger bank, allowing customers to open and manage a personal current account all through a mobile banking app.
There are a lot of savings-friendly features with this current account. These include the personalised spending data, which is designed to help you budget more effectively, plus the ability to round up transactions to the nearest pound and save the spare change.
These savings can be ring-fenced into money buckets called “goals” – with the idea that you’re saving towards a specific financial goal or treat.
Starling’s personal account is free to use and being a full current account it comes with a host of other features, which you can read about in our Starling review.
Our verdictMoneybox started out life as a stocks and shares ISA. The neat app and product make it a great place to start investing your savings if you’re not wanting to get too involved. The trade off for this is the fees. The fees are slightly higher than other stocks and shares ISAs, but then those alternatives come with clunkier interfaces and a frankly less fun experience.
Since the early days, Moneybox has branched out into offering savings products, so now it’s “round ups” feature can be coupled nicely with shorter term goals. (Remember, investing is generally best done over the long term!)
Overall, Moneybox is a good option for beginner investors or savers who are looking to put money towards a shorter term goal. The round ups feature is really fun and Moneybox makes a big deal out of you achieving your goals which is really nice to see. There are other apps out there which allow you to round up spare change though (such as Monzo, Revolut and Starling Bank), and these may be better suited to your needs.
Frequently asked questions
Share dealing platfrom ratings
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
- Financial Services Compensation Scheme
- Finder Customer Satisfaction Survey, December 2020
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