FSCS Protection for Account Linked to Monzo

ando0980

Hi ...Looking for some clarification of the following if anyone knows...Thanks

In Monzo there is an option to create fixed savings pots via other banks eg Charter Savings and Oak North. 

I raised a chat with Monzo to find out if each pot would have its own separate £85k financial protection then but they said the FSCS protection of £85k would be the maximum across all combined pots..

If I were to separately set up a savings account via Charter Savings and Oak North would all accounts then have their own £85000 protection? Thanks

Doctor_Who

ando0980 said:

Hi ...Looking for some clarification of the following if anyone knows...Thanks

In Monzo there is an option to create fixed savings pots via other banks eg Charter Savings and Oak North. 

I raised a chat with Monzo to find out if each pot would have its own separate £85k financial protection then but they said the FSCS protection of £85k would be the maximum across all combined pots..

If I were to separately set up a savings account via Charter Savings and Oak North would all accounts then have their own £85000 protection? Thanks

Yes, as long as they don't share a banking licence, which it appears they don't. You say 'would all accounts then have their own £85000 protection?', it's the combined balance across ALL accounts held with the provider, not each account.

https://www.moneysavingexpert.com/savings/safe-savings/ 

km1500

both of these are separate financial institutions which are covered by the fscs so yes your 85k per institution would be covered

ando0980

Thanks for your replies..I'll set up separate accounts. Doing this through the Monzo app looked liked a quick and easy method..but the devil's in the detail. I'm surprised they don't make this pitfall clear. Thanks

Doctor_Who

ando0980 said:

Thanks for your replies..I'll set up separate accounts. Doing this through the Monzo app looked liked a quick and easy method..but the devil's in the detail. I'm surprised they don't make this pitfall clear. Thanks

I have never used Monzo, but I have used Raisin and HL Active Savings. With both of these you save with their partner banks and you get the £85K FSCS protection with each bank. So it's a 'one stop shop' and you can spread your money around to make sure it's all protected.

ando0980

Excellent..I'll try that. Thanks

James_Londoner

ando0980 said:

Thanks for your replies..I'll set up separate accounts. Doing this through the Monzo app looked liked a quick and easy method..but the devil's in the detail. I'm surprised they don't make this pitfall clear. Thanks

I think you might be getting the wrong end of the stick.  

If the money is with OakNorth (for example), then it's covered by OakNorth's FSCS membership, not by Monzo's - even if you've opened the pot via Monzo.

It makes no difference from this point of view whether you go via Monzo or go direct.

Albermarle

From Monzo website.

FSCS protected

The money you put into Savings Pots is protected up to a total of £85,000 by the Financial Services Compensation Scheme (FSCS).

The FSCS apply this limit to each person and to the total amount of any money you have with the provider, whether held through Monzo or not.

Please note, this means if you have separate accounts with our savings providers outside of the Monzo app, then the deposits held in those accounts will also count towards the limit of £85,000.

Doctor_Who

Albermarle said:

From Monzo website.

FSCS protected

The money you put into Savings Pots is protected up to a total of £85,000 by the Financial Services Compensation Scheme (FSCS).

The FSCS apply this limit to each person and to the total amount of any money you have with the provider, whether held through Monzo or not.

Please note, this means if you have separate accounts with our savings providers outside of the Monzo app, then the deposits held in those accounts will also count towards the limit of £85,000.

I read that information from the Monzo website and I found it contradictory! The first part implies your 'Savings Pots' are held with Monzo and the total is protected to £85K (single banking licence). Then it gets confusing...'whether held through Monzo or not', so 'Savings Pots' may or may not be held with Monzo. The last part then contradicts the first part by saying if you hold savings outside Monzo, but with the same provider as the 'Savings Pot' inside Monzo, then both count towards the £85K limit. This implies multiple banking licences if you have 'Savings Pots' with several providers. The OP was told by Monzo that the first part of the website statement was correct (Savings Pots' protected to a total of £85K).

Maybe it's just me, but I find their explanation of their FSCS protection very confusing. My guess is that they work like Raisin and HL active savings, with each provider bank having their own £85K FSCS protection (as suggested by James_Londoner above). Obviously if you hold accounts with the same provider outside Monzo, you need to factor that in, in the same way I do with Raisin and HL active savings.

They've confused me and I think they've confused themselves with their website statement!