Monzo 1p challenge upgrade worth it?

Uriziel

Monzo is allowing users to put away money away into a pot as a savings challenge. They take 1p on the first day, 2p on the 2nd day and keep going until a year passes.
In total this will amount to £667.95.

However if you upgrade to Monzo Extra which costs £3 a month, they let you save x4 as much so 4p a day instead of 1p a day.
On top of that they pay you 5% on this.

My question is, is the interest you make from this more than the £3 a month cost?

Has anyone calculated this?

eskbanker

A rough and ready calculation gives an average balance of £895 over the year if paying in 4p on day 1, 8p on day 2, etc, so the interest paid would be just under £45, for an outlay of £36, so a small profit.

easyasonetwothree

It's better than the 0% interest on the free account.
But you could do the challenge yourself and put the money each day in a fee-free savings account to keep all the profit. It's convenient that Monzo do it for you but if profit is important for you then I'd do it myself.

EthicsGradient

If the 5% is the same rate that the "free" 1p, 2p ... £3.65 saving gets you, then I don't think it's worth it. Because in that case, the £36/year that allows you to save another 3p, 6p ... is, I think, getting you an extra £34 or so (depends on how interest is calculated, but that's roughly  in line with £45 for the 4p, 8p ... calculation - that would be £33.75).

But I presume Monzo "Extra" has other benefits - depends what value you'd personally put on them.

And of course you could get about the same rate with a monthly saver elsewhere, without the fee.