Monzo launches a premium account - but is it any good? - MSE News

ozaz

arnoldy wrote: »

Read todays Telegraph (Saturday 27th April). They have been well and truly found out. Telegraph article says that they give you far less interest then you would get going to their 'partners' direct. Up to 20% less interest. Thank goodness I was never suckered into the hype.

That Telegraph article lacks balance and decent research. As its The Telegraph, perhaps I shouldn't be surprised. It's fair enough to point out Monzo charge a fee and so you could achieve better rates by going direct to the provider, but that's pretty much all the article bangs on about. It makes mistakes on and does not address other relevant bits of information....

1. The article says Monzo charge the customer 0.2%. This is incorrect. They charge the provider. The provider can set the rate for the customer to whatever they want.
2. This type of savings platform is also provided by others (e.g. Hargreaves Landsown & Octopus Cash) who charge a similar fee to the account providers as Monzo are charging. Not mentioned in the article. The Telegraph probably don't want to annoy HL in particular.
3. The product is really aimed at individuals who like convenience banking (i.e. those who want current account and savings accounts in one place) not those who are inclined to open an account at a specialist savings provider, so the competitors are really high street banks. The article could have had such a different tone if it also pointed out how two modern challenger banks can come together and provide a substantially better interest rate to convenience banking customers than almost all the high street banks (even when one of the banks is paying the other a commission).
4. The ISA product offered direct at provider is not the same as that offered through Monzo's platform. The latter has benefits like flexible terms and lower initial deposit. So its questionable whether a direct comparison of rates between those offered on Monzo's platform and those offered direct at the provider is even valid.

colsten wrote: »

I don't know [but can guess] how Raisin are making their money, but their offerings seem to have the exact same rate you'd get if you went to the provider directly. That is, if the provider actually has the products on offer directly, which is not always the case.

I'm interested in how Raisin manage this too. Do they provide a platform like Monzo, HL, Octopus cash where you only ever need to interact with that platform and not with the underlying provider?

Or is it the case with Raisin that they only provide assistance with account discovery and account opening and then to check your balance and transactions you have to go direct to the provider? If this is the case, I wouldn't put it in the same bracket as Monzo/HL/Octopus and would suspect they charge the provider a one-off introducer fee rather than an ongoing fee.