Surging inflation means the outlook for savers hunting returns is bleaker than bleak. Not one savings account is currently able to keep anywhere near the pace of rising costs.
People can be forgiven for losing interest and whether there is a point of tucking money away for interest paying in some circumstances 5 per cent below the rate of inflation – and this gap could grow bigger in the coming months.
However, firstly for those without a savings pot whatsoever, it is important to have a rainy day fund to fall back on.
Meanwhile, those who have savings stashed away earning a pittance, 2022 might be the year to try and make the money work harder.
Some apps can help you stick to your savings goals by analysing your income and spending habits and automatically putting money aside so that you don’t have to make the decision
There are a host of money management apps and websites specifically designed to simplify the process and for novices, the importance of getting started.
They won’t necessarily help savers secure the best deal on the market – although some will – but they can at least get people into the habit of saving.
Some savings apps can help you automatically save by rounding up your spare change when you spend on your bank card.
Some apps calculate how much you can afford to put aside and squirrel it away automatically, while others allow you to set yourself quirky savings challenges.
They can also help to simplify the savings process and remove the form filling and time sacrifice you might otherwise experience were you to move from provider to provider on the open market.
We went on the hunt for the niftiest savings apps and websites based on what they do and return on offer.
Best for returns: Raisin
What is it?
Raisin can help to simplify the savings experience and cut the bureaucracy involved with setting up new savings accounts.
As a savings platform and app, Raisin allows savers to effectively manage all of their savings in one place.
It means that through a single online account, you can open multiple savings accounts with numerous different banks as and when you require without the usual form filling and admin.
The Savings platform Raisin is currently offering a £50 welcome bonus to savers who sign up and deposit £10,000 or more
What return can I expect?
Raisin’s welcome bonus gives savers the chance to boost their savings by £50 when they open and fund an account on its marketplace with a minimum of £10,000 – although it’s worth noting that the bonus only applies to one’s first savings account with the platform.
Given that its current range of deals sit very competitively with the rest of the market, Raisin offers savers a chance to effectively leapfrog the best savings rates via its £50 bonus when depositing their first £10,000 using the platform.
For example, Raisin’s best easy access deal – offered by the private bank, Brown Shipley is paying 0.61 per cent, not far off Shawbrook Bank’s market leading 0.67 per cent rate.
Add the £50 welcome bonus and it means anyone saving £10,000 into this account via the Raisin platform, can effectively secure a rate of 1.11 per cent for the first year – a return of £111.
Raisin also has a one year fixed rate deal, via Investec paying 1.33 per cent, again not far off the 1.41 per cent being paid by the market leader Gatehouse bank.
Add the £50 welcome bonus and a saver depositing £10,000 will effectively receive a 1.84 per cent rate or £184 return.
Is it safe?
All of Raisin’s partner banks are fully regulated in the UK and in the event that Raisin ceases trading, your deposits, would be protected by the FSCS up to £85,000 per person, per banking group, or up to a similar amount through the equivalent European deposit guarantee scheme.
Any money left sitting in your Raisin UK Account is also protected by the FSCS up to £85,000 as your Raisin UK Account is managed by Starling Bank, a fully regulated UK bank.
If Raisin UK ceases trading, then your funds would remain safe with the partner bank you originally deposited them with.
When it comes to maximising returns, Raisin is probably the pick of the bunch compared to rivals.
It currently offers savers a choice of 72 savings deals from across 20 providers, comprising fixed rates bonds, easy access accounts and notice accounts.
It’s also free to use unlike a number of the other savings platforms so there isn’t a monthly charge to worry about.
However, like some of the other digital savings apps, it does not use any advanced machine learning to automatically help you save.
For a saver who wants full manual control over what and when they put into their savings while having all of their cash in one place with minimal form filling, Raisin is a good bet.
Best for AI: Chip
What is it?
Chip is an automatic savings and investment app designed with the intention of helping its customers to save and invest without having to even think about it.
Chip uses artificial intelligence technology linked to your bank account via open banking to calculate how much its customers can afford to save based on their spending habits.
It then transfers that money from their current account to their Chip account – automatically whilst not interfering with a person’s normal day-to-day spending habits.
Customers can increase or decrease the amount Chip puts aside by tweaking their saving level on the app, which determines how fast or slow they want to save.
Chip can apparently adapt to a person overspending or earning irregular income and can adjust the savings amounts accordingly.
It offers a host of features – it analyses your spending habits, helps set savings goals, and can automatically set a regular amount to save every time you get paid by your employer.
What’s the return?
Chip recently launched a new easy access account, powered by Allica Bank, offering a market leading 0.7 per cent.
More than 400,000 people have downloaded Chip.
Savers can deposit up to £85,000 into any Chip savings account, including the Allica account, although the Allica account is not yet set up to accommodate the auto saving feature.
It also works with the savings platform Flagstone to negotiate access to savings accounts with competitive interest rates.
Flagstone’s services are normally only available to those who are able to deposit £50,000 or more, but Chip is enabling those with smaller deposits to also benefit.
Money you put into an Allica Easy Access or Flagstone accounts are held in a ‘segregated client trust account’ with other Chip savers’ money.
By pooling all Chip savers’ money it claims it can negotiate better interest rates for its savers from the banks.
Is it safe?
All Chip’s savings accounts are powered by UK authorised banks and therefore the money you deposit is covered by the Financial Services Compensation Scheme, up to £85,000 per person, per bank.
Its default account in the app is powered by ClearBank and is also FSCS eligible.
Work out how a lump sum or regular monthly savings would grow
Currently to open the Allica account, customers need to have a paid-for subscription which costs a minimum of £1.50 per month, which will eat into the savings rate.
This means, for example, someone saving £10,000 via the Chip AI account would see their £70 return drop to £52 over a year – effectively rendering the rate 0.52 per cent.
However, from mid-January, Chip will move to a simplified fee structure with two membership plans; ‘Chip’ which is free and ‘ChipX’ which will cost £3 every 28 days.
Savers on both plans will be able to save between £1 and £85,000 into any of the accounts, including the Allica account offering 0.7 per cent.
They will also be able to auto-save into that account, regardless of the plan they’re on.
The premium ‘ChipX’ membership won’t be necessary for those just focusing on saving, however, for those willing to dip their toe into investing, it will include a range of investment funds, including ethical and clean energy funds and an emerging markets fund.
Once the fee structure is simplified the free Allica powered easy access account could be a great option for savers who will not only benefit from a top rate, but all Chip’s AI that could get them in a great savings habit without having to think about it.
Best round-up app: Moneybox
What is it?
Moneybox is an app that allows savers to round up their everyday bank card purchases to the nearest pound and set aside the spare change into a savings account.
Similar to Chip it uses open banking to link to your bank account and means savers can get into the habit of saving every time they spend without having to actively set aside money.
Savers can also deposit money into their account on a weekly or monthly basis and even give themselves a monthly boost when payday arrives.
The round-ups feature will likely be particularly attractive to those who are struggling to get into a savings habit.
How much you save will depend how many transactions you make, but according to Moneybox, its customers are making around 30 transactions per week with an average round up of about 28p each time, resulting in £8.41 savings per week from round ups alone.
It’s worth noting that roundups are not live deductions taken each time you spend, but are pooled over the course of the week and debited from your bank account in one go.
If you’d prefer not to use round ups, you can still make payments by setting up a weekly deposit or making one-off deposits.
Moneybox claims to have been downloaded by more than 700,000 people.
What’s the return?
Moneybox’s easy access saver pays 0.47 per cent, which is 0.24 per cent less than Shawbrook Bank’s 0.67 per cent deal on the open market.
It does however, allow you to open an account with as little as £1 and deposit up to £85,000.
It allows for one withdrawal per month which means access is more restricted than some other easy access accounts.
It also offers a 45 day notice account paying 0.55 per cent, a 90 day notice account paying 0.6 per cent and a 120 day notice account paying 0.8 per cent – none of which are as high as the best paying deal on the open market.
Is it safe?
This savings account is powered by its partner bank’s Shawbrook, Charter Savings Bank and Investec.
All three are covered by the Financial Services Compensation Scheme so your total eligible savings are protected up to £85,000.
There are no fees for holding any of its three savings accounts.
The only catch is that you will not be earning as much interest as you might otherwise make on the open market.
However, for those looking to feel a little less guilty every time they spend, this could be a great option.
Best for money management: Plum
What is it?
Similar to Chip, Plum connects to your current account and analyses your incomings and outgoings.
It analyses transactions and then identifies your regular income, rent, bills and daily spend.
Using this and other factors like your available balance it calculates daily what amount it can safely put aside without impacting your daily life and moves it to your Plum account via direct debit every four to five days.
It also offers a round-up feature much like Moneybox so you can save spare change without any effort.
You can create your own savings buckets based on your personal goals whether that be a holiday or a house, for example.
Plum is then able to adapt to help you automatically save to meet those goals.
It also allows you to choose your own auto-saving rules or you can pick a mood to save based on how you’re feeling.
For example, if you’re feeling ambitious, you can expect Plum to start saving 50 per cent more than usual, or if you’re feeling shy, then you can expect 50 per cent less savings than usual.
Plum’s smart algorithm analyses your spending and helps you save without even thinking about it.
What’s the return?
Its best easy access deal pays 0.4 per cent, but it is only available to those with a fee paying Plum account.
Plum has four account options for customers. Basic, which is free, Plus which is £1 per month, Pro which is £2.99 per month and Ultra costing £4.99 per month.
Those with a free basic account can only secure an easy access deal paying 0.25 per cent.
Given the best easy access deal on the market currently pays 0.71 per cent – this is a major sacrifice.
You can get a real-time view of your daily and monthly spending.
Is it safe?
When Plum sets money aside for you, it’s moved from your bank account and held in an e-money account, which is held and administered by a partner, which is regulated to hold your money as an ‘Authorised Electronic Money provider’.
This e-money account is not FSCS protected, but is subject to strict European regulation, meaning that in the unlikely event that Plum or the partner should go bust, you will get your money back.
Although its Basic Plum account is free and this includes automatic savings and round-ups, savers will only be able to secure 0.25 per cent on their savings which is not far off three times worse than the best paying easy access deal on the open market.
Those who wish to have access to the higher paying 0.4 per cent deal will have to sign up to the Plum Plus account which costs £1 each month.
The app is one of the simplest to use, but the returns on offer may make Plum less appealing than some of its competitors.
The other money management apps are out there
Claro is a ‘financial coaching’ app which enables its users to have one-on-one sessions with financial expert to discuss their goals and plans for the future.
The first financial coaching session is free once you download the app. Thereafter you pay between £60-£80 an hour, depending on your needs.
Using the app you can connect your bank accounts via Open Banking and therefore allow you to see your spending and income from all your bank accounts in one place.
Claro says its coaches will work with you to create a plan to make your goals a reality no matter what financial stage you are at.
It is also offering savers a deal paying 2 per cent – they don’t have to pay for coaching to benefit either.
However, it may not appeal to those looking to stash away large amounts as the 2 per cent deal is capped at £3,000.
The Claro account is Financial Services Compensation Scheme protected for individual balances up to £85,000, with savers’ money held in a pooled NatWest account.
- Affordable financial advice
- 2 per cent bonus rate on deposits up to £3,000
- Seeing all your bank accounts in one place
Yolt is a venture of Dutch bank ING Bank N.V. meaning it has the stability of a well-established bank but also the agility of a future forward fintech.
It is a licensed third party provider, is regulated by the Dutch Financial Authorities and can be found on the FCA register.
- Seeing your spending history via charts
- ‘Splitting the bill’ between accounts
- Earning rewards from various retailers
- Comparing utility and insurance providers
Emma, described as ‘your best financial friend’, is a free app designed to help you avoid overdrafts, cancel wasteful subscriptions, track debt and save money.
It also allows you to see all your accounts in one place, including your current accounts, savings, cryptocurrencies and even pensions
Emma analyses your transactions to give you the full list of recurring payments across your accounts enabling you to better track and cancel wasteful subscriptions.
- Helping track and cancel wasteful subscriptions
- Syncing your budget to payday
- Comprehensive analysis and budgeting
Money Dashboard was voted Best Personal Finance App in both 2020 and 2021 and is one of the more popular apps available, with half a million users.
It allows you to set up multiple budgets and send notifications if you overspend, while also allowing you the ability to predict any future spending.
- Seeing your total balance across all your accounts
- Transferring money between all your bank accounts in one app
- Personalising how your spending is grouped and organised
- It notifies you when your balance is looking low and bills are still due
- You can review how your spending habits have changed over time
Cleo is very much targeted towards the younger generation, with a fast-paced quirky nature and the opportunity to win cash via quizzes and games.
Cleo is different from most of its competitors in that it uses AI to talk to you like a real person.
You can ask the app questions and it will respond as if you’re texting a friend making the user experience a bit more fun and lively.
It is free to use, FCA-registered and it has also signed a pledge which provides protection for up to £85,000 in losses to UK bank accounts and credit cards where the losses are attributable to sign-up and use of Cleo.
Moneyhub brings together all your bank accounts, credit cards, investments, savings and borrowing under one umbrella.
- Making money management fun and interesting
- Setting saving goals with Cleo via Round-ups
- Also savers can pick a number and just let Cleo automatically save for you
- Informative and engaging blog posts
- Get spending updates, budgeting tips and help with bills
Moneyhub is another one of the leaders in this area, having been around since 2009.
It intuitively categorises your transactions, whilst its spending analysis shows you exactly where your money goes each month.
It is FCA registered and is one of the few money management apps that is available for businesses as well as for personal use.
- All your accounts, investments, assets and borrowing in one place
- Insights into your spending habits and tools to help you change your behaviour
- Keeping you informed with relevant and timely ‘nudges’
- Spending analysis and spending goals
- Explaining jargon
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