What Is Moneybox?
Moneybox is a “micro-investment” app that rounds up everyday purchases so that young people have some money to invest. Moneybox rounds up any payment you make with a linked payment method and puts that extra change to work by investing it in securities of your choice.
Moneybox was born in 2015 by co-founders Charlie Mortimer, and Ben Stanway. Mortimer and Stanway developed that app and released it a year later in 2016. It has since become one of the most popular money-managing apps in the UK and has won several awards in the past few years for its intuitive and beginner-friendly approach to investing.
Moneybox is not just for investing in small companies either. There are some big-name investments such as Amazon, Nintendo, and Disney, and enough diversity so that you can get a well-diversified portfolio, even though you are investing very small amounts.
Should You Get Moneybox? Is It Right for You?
Moneybox offers a super simple and straightforward way for people to get into investing. Aside from the general investing tools, Moneybox has some good features for younger people looking to build their wealth. Moneybox may be the right choice if any of the following about your are true:
- You want a hands-off approach to investing
- You don’t have much capital but want to invest what you can
- You want to learn more about investing and experiment
- You are looking for simple and stable investment strategies
- You prefer self-directed investing instead of working with an advisor
- You have a main investment account but want to experiment with different investment strategies with relatively little risk
How Does Moneybox Work?
Moneybox is a “micro-investment” app and is geared towards making small investments in the range of 0.01p-0.99p. The app rounds up any purchase you make with a connected payment method to the nearest pound and puts that extra change into a brokerage account.
So for example, say you bought your morning coffee for £2.75 (that’s about $3.42 USD for you readers across the pond). Moneybox will round up that purchase to £3.00 and invest the extra 0.25p. The idea is that over time, you build up a sizable investment pool by rounding up spare change on everyday purchases.
Moneybox works via a smartphone app (Android and iOS are both available). Unfortunately, there is no desktop version so you’ll have to get the app if you want to use it.
Once you download the app and create an account, you can decide what kind of brokerage account you want and pick your investments. The app is very intuitive to use and you can click on any of the “?” in the interface to get help on functions and investment tips.
Moneybox allows users to set up general brokerage accounts, self-invested personal pensions (SIPPs), and ISA/Junior ISA accounts. You can also pick between 3 investment “strategies”: Cautious, Balanced, and Adventurous. Each option differs based on the amounts allocated to cash funds, global shares, and property shares. The breakdown for each type is:
- Cautious: 85% cash, 10% global, 5% property
- Balanced: 30% cash, 45% global, 25% property
- Adventurous: 5% cash, 60$ global, 35% property
After setting up an account you select your payment and deposit options. Moneybox’s unique feature is rounded up purchases on registered payment methods, but you can forgo that option and just directly deposit funds instead if you want. You do have to have at least £1 in your account to start investing though.
One cool feature Moneybox has is the auto-fill for bank details. If you have your bank’s app then Moneybox can automatically establish a connection without you having to manually enter the details. Money deposited into your Moneybox account is collected each Wednesday and invested in your selected products the following Monday. You can even go and select which payments to round up and which to not round up.
Is Moneybox Legit?
Yes, Moneybox is a legitimate investment app and is safe to use. Moneybox is FSCS covered and is protected up to £85,000. Moneybox also has a 256-bit bank-level TLS encryption on all users’ personal information and they do not sell personal data to third-party organizations without your permission.
Moneybox also has a knowledgeable and helpful customer support team you can reach any time of day via live chat or email.
What Fees & Charges Does Moneybox Have?
Like most micro-investment apps, Moneybox gains most of its revenue from account fees and fund fees.
Moneybox does not charge any transaction fees on normal stock trades and there is no account minimum. However, for ISA and general investment accounts, they do charge a £1 monthly subscription fee and a %0.45 annual platform fee. Funds expense ratios fall anywhere between 0.12%-0.30%.
Pensions funds, on the other hand, do not charge a monthly subscription fee. Pension funds are charged a 0.45% annual fee for accounts under £100,000 and 0.15% for accounts over £100,000. Both ISA and general accounts are subjected to annual and weekly contribution limits, respectively. ISA account contributions have an annual limit of £20,000 and general accounts have a £20,000 weekly investment limit.
Now, these amounts may seem small initially, but you need to keep in mind the small amounts you will be investing in. £1 a month is not a lot all things considered, but that could be a sizable chunk of your invested funds, proportionally speaking.
What Else Does Moneybox Do?
Moneybox has a couple of unique features that separate it from other investment apps. One feature is the ability to create Junior ISAs. Junior ISAs work basically the same as regular ISA and investment accounts, but the Junior ISA is designed to help your child save for their future. Each Junior ISA account can be named for only one child so you can set up multiple Junior ISA if you have multiple children. Junior ISAs can only be set up for children under 18 years old.
There is also the option to invest in “socially responsible” options through the Old Mutual World ESG fund, a feature that is available exclusively to Moneybox users in the UK. This global mutual fund is indexed to companies that score highly on MSCI’s environmental, societal, and governance approach metrics.
What Are People Saying About Moneybox?
Moneybox has received a lot of praise and has had a great track record in the 4 years the platform has been live. People praise the intuitive interface, simplicity, and accessibility of the app as it opens up trading to a demographic who might otherwise not consider investing. The focus on small micro-investments rounded up from daily purchases substantially lowers the entry bar to investing.
Moneybox also seems to be just as profitable as other investment apps. According to company data, £1,000 invested using their methodology with £50 contributions per month would be worth £9,000 using the Cautious approach, £12,511 with the Balanced approach, and £13,270 using the adventurous approach.
What Are the Benefits of Moneybox?
- Simple and smart way to get younger people and beginners into investing. The focus on micro-investments makes the entire process feel manageable and familiar.
- Good range of investment account-types and options. Account-holders can contribute to ISAs, SIPPs, and GIAs, with a special option for Junior ISAs.
- Good growth. Simulations and data indicate the investing with Moneybox can generate at least average market returns.
- Choice between 3 portfolio options (Cautious, Balanced, and Adventurous), each curated for those with different risk tolerances.
- FSCs-protected. All your investments are ensured and personal data is protected by bank-level 256-bit encryptions.
- No transaction fees on normal trades. Average ETF expense ratios.
- Good customer reviews and positive word of mouth.
- Knowledgeable and friendly customer support staff is available 24/7
What Are the Drawbacks of Moneybox?
- Relatively high account fees. £1 a month may not seem like much but proportionate to the average Moneybox account value, it is.
- Some customers complain that it takes a long time for funds to make their way from your account to selected products.
- Relatively limited investment selection. There are enough options to have a well-diversified portfolio, but not as many options as some other trading apps.
Our verdict is that Moneybox is a great beginner-friendly app that is perfect for those new to the world of investing. Moneybox’s focus on small-scale investing is a perfect way to introduce the process and make it seem less intimidating. It also makes the investment process autonomous so you can focus on other things while your money grows. The main criticism we have is the relatively high account fees. The flat-account fees will affect you more if you have a smaller account value. Otherwise, it is a good app to practice trading and start building for your future.
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