The digital banking space has been witnessing intense competition for some time, with players vying to offer the best deals and features to customers.
The latest player to join the fray is Monzo, which has launched a new easy-access savings account that offers a rate of 3%.
What is Monzo’s Instant Access Account?
The account has no minimum deposit, and anyone with a Monzo account can open it. Savers can access their cash at any point without penalty, and the account has a maximum limit of £100,000. Monzo is protected by the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 per person.
The account will sit alongside other savings features from the bank, including savings pots, a salary sorter, and instant notifications for customers. Monzo already offers a range of easy access and fixed-rate savings accounts to choose from, which are provided by its partners.
How does Monzo’s Account Compare to Others on the Market?
While Monzo’s 3% instant access account is an attractive offer, there are other options available for savers looking to get the highest rate of interest.
According to Moneyfacts, Cynergy Bank’s Online Easy Access Account (Issue 56) is currently the market leader, paying 3.11% interest. The Paragon Triple Access Account (Issue 11) pays 3.10% interest with a minimum deposit of £1.
Tandem Bank has also recently increased the rate available on its instant access savings account to 3.05% AER.
Competition in the Digital Banking Space
Monzo’s move comes in response to rival online bank Chase, which recently increased the rate it pays to 3% for its instant-access savings account. Chase has also confirmed that it will start paying in-credit interest of 1% from April to current account customers. However, customers who want to continue to receive a debit card cashback of 1% after the initial 12-month period will need to meet a new £500 minimum deposit, while they will cap the cashback at £15 a month.
The CEO of Monzo, TS Anil, said that the new instant access savings account was developed with customers in mind and was designed to give everyone the flexibility to grow their money and access it whenever they need to. He added that Monzo’s mission was to make money work for everyone, and that amid the cost of the crisis, the ambition was to make money work even harder.
The competition in the digital banking space is intensifying, and customers stand to benefit from the attractive deals and features on offer. While Monzo’s new 3% instant access account is a welcome addition to the market, savers should consider all their options before making a decision.