Savings app Plum launches its first interest-paying feature
“Interest Pockets” are now available to Plum Plus and Plum Pro subscribers.
Plum has unveiled a new “Interest Pockets” feature, which for the first time will enable customers to earn interest on the money that they set aside in the app.
Subscribers to the Plum Plus or Plum Pro plans can now open an easy access Interest Pocket that currently pays interest of 0.6% AER.
Plum’s app works by using artificial intelligence to analyse a user’s income and spending habits, calculate a suitable amount that can be set aside each week and then transfer this to a Plum account. Customers can then choose to put this money towards a savings goal or invest it in the stock market.
When users of the app create a new Pocket (which is a savings pot for a specific goal), they will now be given the option to choose between a regular Pocket and one that pays interest.
Plum Plus subscribers will be able to open a single Interest Pocket, while those paying for Plum Pro will be allowed to create multiple Interest Pockets (which can also be personalised with assigned savings goals).
Plum said that it also intends to offer Interest Pockets to customers on its free plan “in the near future… albeit at a slightly lower rate of return”.
Interest on these new Pockets is calculated daily and applied monthly. Plum users will need to provide one working day’s notice if they want to withdraw money from the Interest Pocket.
Customers can also use the app’s “Splitter” tool to control how the money they set aside with Plum is divided up – either being deposited in their primary Plum account, a new Interest Pocket or an investment fund.
Plum has described the 0.6% interest rate as “one of the most competitive going”, at a time when easy access interest rates at high street banks are averaging just 0.01%.
Money saved in Plum’s new Interest Pockets will be held on trust with the Investec banking group, which means customer funds will be protected by the Financial Services Compensation Scheme (FSCS).