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Moneybox Review – I saved an epic £1500 without trying

Moneybox was my personal gateway to investing. Within 18 months I had invested £1,500 without really noticing. It was my first and I owe it so much. But ultimately, we drifted apart. This is my full Moneybox review and an account of our dalliance. Read on if you are flirting with the idea of investing and want something quick, simple and easy to understand.

What is Moneybox?

Moneybox is a micro-investing, app-based platform that makes investing simple, quick and easy.

Here are the highlights:

  • Driven through your smartphone app (there is also a website).
  • Open an ISA from the app in less than 10 minutes, all from your sofa.
  • Perfect for investing beginners.
  • Open account with only £1.00.
  • No committed monthly direct debit.
  • Friendly and intuitive interface.

Heads up – We aim to produce honest and accurate content, however, we are not financial advisors. If you need financial advice, Unbiased can connect you with a suitable professional for free. Some of our links may earn us a small commission to help us run the site.

Making investing easy

The world of Investing is chock full of TLAs (Three Letter Acronyms……get it?). This makes it confusing, intimidating and puts a lot of people off. It did me, for sure.

The platform was originally created to encourage millennials to invest. It did this by being app-based, with an intuitive interface full of friendly icons that made it jargon-free and accessible.

And it works. Moneybox is a perfect gateway for anyone toying with the idea of investing.

Want to learn more? Check out the freeBeginners Guide to Investing – how to bank roll your financial freedom.

How does Moneybox work?

At its core, it is a Stocks and Shares ISA (S&S ISA) wrap, within which Moneybox makes investment decisions for you based on the risk profile you select.

Be aware, therefore, there are considerations that apply to S&S ISAs, including:

  • the maximum you can invest in a single tax year in £20,000
  • you can only pay into one Stocks and Shares ISA per tax year

For this reason, to realise the true benefits of this product, you need to take a medium to long term view to make it really work. Think a minimum of 5 years before you use this money, and ideally longer.

ISAs can provide you with a great wrapper for your investments to ensure you don’t lose any of your gains to the taxman. We have written a Complete ISA Guide and a Stocks & Shares ISA Guide that give you everything you need to know.

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How does it help you invest?

There are three key ways in which you can save:

1. Moneybox Roundups

Roundups are the main principle upon which saving is built and what the platform has become known for. They work by essentially rounding up your digital spare change.

If you want to get your geek on, the underlying psychology principle is Richard Thaler’s Nobel prize-winning ‘nudge theory’. His book ‘Nudge: Improving Decisions About Health, Wealth and Happiness’ is an interesting read.

For example, if your morning latte costs £2.40, then Moneybox will round this up to £3.00 and invest the £0.60 difference.

It might only be 50p here, 20p there. But over the month, they all add up without you even really noticing.

Moneybox app - roundup

2. Quick Adds

In addition, you can also make ‘Quick Adds’. You’re feeling flush and it’s been a good month. With one click, you can instantly add £20, £100 or any amount to your account.

Usually, at Eat Sleep Money, we are wary of these endorphins-firing quick press buttons within apps, as they usually make you spend money you shouldn’t. But in this case, it’s a good thing.

3. Weekly Deposits

Finally, you can also set up regular Weekly Deposits which are a good habit to get in to, particularly when you use the forecasting tab to show what an incredible difference they make in the long run.

Personally, I found that when I used all three together (though I mainly used the roundups and weekly deposits), the effect was powerful and really amped up my motivation and savings rate.

Like the sound of auto-save features? Chip app uses Artificial Intelligence to maximise your savings rate and offers market-beating interest rates.
Read the full review and get your exclusive VIP account invite HERE.

Are you cautious, balanced or adventurous?

One of the conundrums of investing is deciding what to invest in. It is a literal minefield out there. Moneybox simplifies this into three risk categories and adjusts the investment portfolio for you automatically.

  • Cautious – 15% in global shares, 40% in cash and the rest spread across property and bonds.
  • Balanced – 65% in global shares, 10% in property and 25% in corporate bonds.
  • Adventurous – 80% in global shares, 15% in property and 5% in corporate bonds.

This is going to be very much a personal decision based on your appetite for risk, what you have in mind for this pot of money and your personal circumstances.

Being in my thirties and having no intention to use this money in the next 20 years, I plumped for Adventurous.

moneybox risk

Which funds does Moneybox use?

Whether you choose Cautious, Balanced or Adventurous, these profiles simply apply different allocations across three main investment categories, each run by a different fund manager:

  • Global shares – Vanguard Global Equities.
  • Cash fund – Janus Henderson.
  • Property shares – BlackRock global.

All three are considered major, global players so no red flags here.

The Moneybox app

This is a key feature and deserves some special attention. Even in a world where the traditional and challenger banks alike are massively upping their digital game, this app holds it’s own.

  • Friendly interface – everything about the app is intuitive, simple and user-friendly icons.
  • Blog – a nice, digestible monthly money news roundup.
  • Incentives – get exclusive access to offers and discounts on products ranging from genetic testing to shaving subscriptions.
  • Time Machine – a visual tool clearly shows you the powerful effects of compounding on your personal investments. For example, simply upping your regular weekly deposit from £10 to £20, increases your investment value by about £7,000 over 10 years, including £5,000 of gains.

I found the Time Machine feature was hugely motivational and encouraged me to save more and more.

Moneybox fees

As you learn more and more about investing, it becomes apparent that minimising your fees makes a huge difference. Half a per cent may not sound like much, but over the course of ten, twenty, thirty years it can make a huge difference to the value of your investment.

Because of that, we always take a close look at any fee structure. Here, this breaks down into three areas:

Platform Fee 0.45% No trading or transaction costs
Fund Provider Fees & Costs 0.12-0.3% No withdrawal costs
Subscription fee £1/month Free for the first three months

The subscription fee, in particular, needs to be considered carefully. £1 may not seem a lot, but it can make a big dent in smaller balances, making it quite expensive.

On a £100 balance, you would incur platform fees of £0.45 (0.45%) plus fund fees of up to £0.30 (0.3%) and subscription fees of £12. This means the fees could be as high as 12.75%. The subscription fee is the cost of the app and the nudges and rounding that make investing easier.

By comparison, Hargreaves Lansdown has a similar platform and fund fees but no monthly subscription making the annual cost usually less than 1%. Vanguard is even cheaper than Hargreaves Lansdown but with a limited choice of funds.

The bigger your balance, the less impact the £1 subscription fee has.

If you invested £20,000 (the annual maximum for an ISA), the fees would be more like 0.75%, which is much more competitive. Again, there are cheaper options out there, but you will have to work harder to invest.

Moneybox needs to make money for the service it provides. However, there must be a better way rather than penalising those with smaller balances and are just starting out.

What did we like about Moneybox?

There is much to like about this service:

  • Easy setup – being able to open an ISA from an app within 10 minutes, whilst nursing an espresso, made it a simple and stress-free affair.
  • Round-ups – made saving / investing easy without really noticing.
  • Time Machine – was hugely motivational by showing you what your money will be worth in 10 year’s time.
  • Customer service – whilst all driven through the chat function, the quick response at any time of day and day of the week was impressive.
  • Blog – this is a nice touch. Not everyone will use it, but if you like easy-to-digest peeks into the world of investing and global events such as International Women’s Day, then you’ll like this.
  • Discounts – you can get access to exclusive discounts on services ranging from DNA testing to shaving subscriptions.

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What didn’t we like about Moneybox?

There are some things that could be improved:

  • Investment delay – the time it takes money to go from your account to actually being invested can take several weeks. This can be frustrating and feels like a missed opportunity.
  • Expensive fees on smaller balances – Moneybox needs to make money for its service, sure. But it should be able to find a better way than penalising the very customers it’s trying to attract.
  • Limited fund choice – it could be argued that there is little choice in where to invest your money. But that’s the very point of this product – it makes those decisions for you. If you want more control over where your investments go, then check out other, more manual platforms like Vanguard or Hargreaves Lansdown. Or you could check out the best investing platforms.

What products does Moneybox offer?

Originally there were two main products:

Moneybox Stocks and Shares ISA

A tried and tested tax wrapper, where no tax is paid on the income you make. Maximum investment of £20,000 per tax year.

Moneybox General Investment Account (GIA)

A simple place to hold investments. No tax relief but also no limits on investments.

If you need more information on ISAs and how they work, why not check out our Complete ISA Guide.

Moneybox has since added many more products to its portfolio, the first two of which are other types of ISA tax-wrappers:

Moneybox Lifetime ISA (LISA)

An ISA wrapper designed to help you either save for a house or towards retirement. Handily, although the maximum you can contribute is £4,000 per year, the Government give you a 25% top-up of any money you put in. Nice.

Check this out for more information on Lifetime ISAs.

Moneybox Junior ISA (JISA)

Tax-free saving wrapper for children. Beware though, they get full entitlement at 18, so make sure you educate them on the ways of healthy finance beforehand!

This post goes into more detail about Junior ISAs.

Moneybox personal pension

A way of bringing together your previous old, stranded pensions and manage them from one place. Pick from a simple range of options, including socially responsible funds.

What can be better than having your old pensions all in one app where you can track their progress? Plus, you get tax relief on contributions and no capital gains tax on growth.

Fee wise, you’re looking at 0.45% for the first £100,00, then a slim 0.15% on balances above that. In addition, you have annual fund manager fees of between 0.12% and 0.21%, depending on the fund selected.

Remember though, this is where your previous pensions come to live……and die. You cannot transfer your current workplace pensions or employer contributions to here.

Furthermore, there is no early draw-down facility. You can’t touch this account until the young age of 55.

For an alternative to easily finding and managing old pensions, check out Pension Bee.

Moneybox savings account

Two versions here that can be opened with as little as £1: the 45-day and 95-day.

The 45-day notice Savings Account requires 45-days notice if you need to get at your cash. In return, you get a 0.45% AER variable interest rate.

The 95-day notice Savings Account, in return for a longer notice period, rewards you with a whopping a 0.6% AER variable interest rate.

Looking for the best savings rate? Check out Hargreaves Lansdown Active Savings.

How do I open a Moneybox account?

Opening an ISA used to mean donning your finest suite tails, adjusting your coiffure and booking a meeting with your bank manager. OK, so it’s not the 1950s, but it did mean you had to physically go into a branch, which frankly was a faff.

Opening a Moneybox Stocks and Shares ISA is incredibly quick and requires three simple steps.

Grab a brew, get comfy and it can all be done within 10 minutes. Just download the app from the website or App Store/Google Play to get going.

Open a Moneybox account in three simple steps:

Step one – choose between General Investment account or Stocks and Shares ISA.

Step two – select your risk profile: Cautious, Balanced or Adventurous.

Step three – link your bank accounts. All the major banks are included and Moneybox now supports Monzo and Starling.

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Moneybox alternatives

Interested in Investing? Check out this Beginners Guide to get started.

Plus, whilst you may need to get a little more hands-on, look at the reviews below for some of the best investment accounts available.

  • Hargreaves Lansdown – best platform & App, competitive fees and access to the widest range of investments.
  • Fidelity International – access to a wide range of investments with cheaper fees than Hargreaves Lansdown.
  • Vanguard Investor – lowest fees but limited to Vanguard funds only (no picking Apple or Amazon stocks here).

If you are looking for a better way to manage your finances, then check out the Financial Fitness Programme. The personal finance programme provides a six-step guide to managing and automating your finances. It gives you the tools and resources to get yourself financially fit and reduce your money worries. Learn more here.

In Summary

Moneybox was responsible for getting me into investing. It made it easy, simple to understand and accessible. However, in a way, it became a victim of its own success. It whetted my appetite and encouraged me to learn more. As a result, I started exploring other platforms, researching low-cost products and wanting to take more control over how my money was invested. Alas, we are no longer together. But it will always be my ‘first’ and for that, it will always have a special place.

If you still have questions, please come join our supportive UK Personal Finance club on Facebook. You will find other like-minded individuals. It’s a safe, private community where you can ask questions and learn more about making the most of your money. Best of all, it’s free! I’d love to see you there.

Here’s to Financial Fitness does not offer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. If you need financial advice Unbiased can connect you with a suitable professional for free. Investments may go up as well as down and you may get back less than you put in.