Moneybox Review 2024: Pros & Cons

Moneybox, a popular saving and investing platform in the UK, has gained widespread favor for its user-friendly interface and robust features. Despite its tidy and cute appearance, the app is making a significant impact in the financial market.

Offering a range of finance products, including savings, investments, pensions, and mortgage advice services, Moneybox has garnered attention for its promising returns in risk-based portfolios and reasonable fees. Established in 2015 by Charlie Mortimer and Ben Stanway, the London-based fintech firm has quickly become a go-to solution for younger generations looking to initiate their savings and investment journeys.

Through innovative features such as rounding up daily purchases and investing the change, Moneybox aims to make saving and investing more accessible. The platform has effectively leveraged technology to overcome traditional barriers and provide a comprehensive suite of financial services.

Moneybox Account Types: A Comprehensive Overview

Moneybox offers a versatile array of personal account options, catering to various financial needs.

• General Investment Account (GIA): Serving as Moneybox's basic trading account, it becomes relevant after exhausting the ISA allowance, potentially subject to capital gains tax.
• ISAs (Individual Savings Accounts): Moneybox provides diverse ISAs, including Stocks and Shares ISA, Lifetime ISA (LISA), and Junior ISA (JISA). Each serves a unique purpose, such as tax-free investing, saving for a first home, or building a nest egg for children.
• Stocks and Shares Lifetime ISA: This option allows for investments aimed at growing money over time, accompanied by a 25% government bonus and tax-free growth.
• Stocks and Shares ISA: Enabling tax-free investing up to £20,000 per tax year, this account shares the allowance with other ISAs, providing flexibility in withdrawals.
• General Investment Account (GIA): Unlike ISAs, this standard investment account lacks tax-free benefits, potentially subjecting profits over £6,000 per tax year to Capital Gains Tax.
• Junior ISA (JISA): A tax-free savings account for children, allowing contributions of up to £9,000 annually, with tax-free returns accessible when the child turns 18.
• Pension: Moneybox offers a personal pension that individuals can manage independently. The government provides a 25% bonus on contributions, and tax reclaims are possible for higher earners. Access to pension funds is restricted until age 55.

Cash Savings

• Cash ISA: Moneybox's Cash ISA stands out with an impressive interest rate and complete tax exemption, allowing users to earn interest without concerns about taxation. The annual allowance is £20,000 per tax year, providing a tax-free savings option.
• Cash Lifetime ISA: Geared towards saving for a first home or retirement, Moneybox's Cash Lifetime ISA offers a substantial 25% bonus on savings up to £4,000 per year. The initial interest rate of 4.25% for the first 12 months, including a 0.75% bonus, makes it a top choice in the market.
• Simple Saver: Functioning as an easy-access savings account, the Simple Saver by Moneybox offers a competitive 4% interest rate. While users can add and withdraw money freely, there is a limit of one withdrawal per month.
• Notice Accounts: Moneybox provides Notice Savings Accounts with varying notice periods (32, 45, 95, or 120 days), allowing users to lock away their money and earn favorable interest rates. The platform's rates for notice accounts are generally attractive.

Moneybox Fee Structure Unveiled

Understanding the fees associated with Moneybox involves navigating various aspects depending on your chosen accounts:*

Cash Savings:

• For cash savings, like a Cash ISA, no fees are incurred.
• Moneybox generates revenue by earning a fee from the bank where your cash is stored.

Investing:

• Monthly subscription: £1
• Annual account fee: 0.45% of total savings in investments
• Annual management fee within the investment fund: Ranges from 0.12% to 0.58%
• Pension annual charge reduces to 0.15% for amounts exceeding £100,000.
• No fees for buying or selling investments, including individual stocks.
• Currency conversion fee: 0.45% when buying and selling individual US stocks.

Currency Conversion Fee:

• Applies to individual US stocks, charged at 0.45% for both buying and selling.
• Comparable to industry standards ranging from 0.15% to 1.50%.

Product-specific Fees:

• Savings accounts and Cash Lifetime ISA have zero fees.
• Investment account fees include a fixed monthly subscription of £1, platform fees of 0.45%, and underlying fund fees ranging from 0.12% to 0.58%.
• Pension platform fees are 0.45% for amounts up to £100,000 and 0.15% for amounts over £100,000.

Overall Fees Score:

• Transparent fee structure.
• No commission for buying or selling investments.
• Competitive platform fees with a flat £1 monthly subscription.
• No additional charges or hidden fees, contributing to a high fee score.

Moneybox's Safety Assurance

Absolutely, Moneybox prioritizes your financial security. It operates under the authorization and regulation of the Financial Conduct Authority (FCA) , ensuring it meets the required standards for managing your funds.

Additionally, the Financial Services Compensation Scheme (FSCS) safeguards your savings, providing protection up to £85,000. Your investments, held directly with the funds in your name, offer an extra layer of security, as they can only be returned to you.

Moneybox Customer Feedback

Moneybox receives high praise from its users, earning a remarkable 4.4 out of 5 "excellent" rating on Trustpilot , as of January 2024. This score is particularly impressive within the financial services sector, known for its complexity and often poor customer service. Users frequently highlight Moneybox's excellent customer service and the app's exceptional quality.

Advantages of Moneybox

• Competitive interest rates offered for Cash ISA.
• User-friendly platform with a high level of trust.
• Cost-effective solutions.
• Outstanding mobile app functionality.
• Diverse financial product offerings, including Lifetime ISA, Stocks and Shares ISA, Junior ISA, and Pension.
• Excellent customer service.
• Attractive returns on pre-built portfolios.
• Free mortgage advice.

Limitations of Moneybox

• Restricted selection with only 20 available stocks.
• Monthly subscription fee of £1.
• Limited investment options, exclusively focusing on US shares.
• Absence of comprehensive financial advice.

Our Verdict on Moneybox

Moneybox is highly praised for its user-friendly app and features like round-up and auto-save, making it a great option for those new to saving and investing. The app addresses the struggle to save and encourages users to put away more money. It excels in offering a diverse range of financial products, including Cash ISA, investment funds, US stocks, Lifetime ISA , Stocks and Shares ISA, Junior ISA, and a pension.

However, the platform fees are noted to be higher than some competitors, and more experienced investors might prefer platforms with a broader range of investment options. While the app is easy to use, there's a lack of guidance on investment strategies and little assistance in determining the amount to save. Some users find the restriction on moving money between accounts and the need for a separate app for a Junior ISA to be inconvenient.

In conclusion, Moneybox serves as an excellent introduction to saving and investing, especially for habituating regular contributions. Yet, for long-term and substantial savings, users may explore alternatives with lower fees and more comprehensive investment choices.

Wealthify is suggested as a viable alternative, particularly for ISA investments due to its lack of minimum investment and monthly fees. Overall, Moneybox is a valuable tool for building financial habits but may not be the sole source for significant or prolonged savings and investments.