The digital banking space has been fiercely competitive for some time, with players vying to offer customers the best deals and features.
The latest player in the fray is Monzo, which has launched a new easy-to-access savings account with a 3% interest rate.
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 money at any time 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 be offered alongside the bank’s other savings features, including savings pots, a salary sorter and instant customer alerts. Monzo already offers a range of easy-to-access and fixed-rate savings accounts to choose from, provided by its partners.
How does the Monzo account compare to others on the market?
While Monzo’s 3% instant access account is an attractive offer, there are other options for savers looking to earn the highest interest rate.
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 also recently increased the interest rate on its instant savings account to 3.05% APR.
Competition in digital banking
Monzo’s move is in response to rival online bank Chase, which recently increased the interest rate on its instant access savings account to 3%. Chase has also confirmed that it will pay 1% loan interest to current account customers from April. However, customers who want to continue receiving 1% debit card cashback after the initial 12-month period will have to make a new minimum deposit of £500, while cashback will be capped at £15 per month.
Monzo CEO TS Anil said the new instant access savings account was designed with the customer in mind and was designed to give everyone the flexibility to grow their money and access it at any time. He added that Monzo’s mission was to make money work for everyone and given the cost of the crisis, the aim was to make money work even harder.
Competition in the digital banking space is heating up and customers are taking advantage of the attractive offers and features. While Monzo’s new 3% instant access account is a welcome addition to the market, savers should consider all options before making a decision.
