Plum, a smart app for managing your money, has announced that its customers can now earn interest on the money set aside via the app with its Interest Pockets.
At a time where many high street banks have slashed instant access saving rates to 0.01%, Plum is rolling out a competitive rate of 0.6% Annual Equivalent Rate (AER). Plum Pro (£2.99 p/m) and Plum Plus (£1 p/m) subscribers can now earn the 0.6% rate when they save into Plum’s Easy Access Interest Pocket. In the future, free Plum users will also have access to an Easy Access Interest Pocket (rate TBC).
The new interest rates will offer savers a better rate of return compared to an equivalent easy-access account from the main high-street banks. Furthermore, Plum will provide a higher limitless interest rate than any of the UK’s leading challenger banks. At the time of launch, the easy access rate of 0.6% is higher than Starling‘s (0.05%) easy access savings account, while Revolut and Monzo keep their higher rates behind a higher paywall (Revolut Premium at 0.8% for £6.99 p/m, Monzo Plus at 1.0% limited to £2000 for £5 p/m).
Plum customers can split a percentage of the money they put aside automatically between their original instant-access Plum account, the new Interest Pockets and their investments, controlling the percentage to fit their individual saving strategy. Customers must provide notice of 1 working day to withdraw money from an Easy Access Interest Pocket.
Interest Pockets are available to all UK residents over the age of 18, with no minimum balance and a maximum balance of £85,000 for all Interest Accounts with Plum. Money saved in an Interest Pocket is held on Trust with an account provided by Investec. Customers who save into an Interest Pocket with Plum may be protected by the Financial Services Compensation Scheme (FSCS) in the event that Investec was to become insolvent, with the option of claiming up to £85,000 of their money back where applicable.
Launched in the UK in 2017, Plum uses AI to automate key parts of personal finance, such as saving, switching bills and investing. This scientific approach to money management has been proven to be particularly successful during the COVID-19 pandemic. Where spending-driven rules like round-ups have seen a decrease, Plum’s automation has led to a huge surge in the amount customers have tucked away during the Coronavirus outbreak. When people stayed home and spent less, Plum’s AI intuitively stashed more money for them, and in June, the company reported an increase of 5x in consumer deposits compared to January 2020.
“Plum has always been the smartest way to put money aside,” comments Victor Trokoudes, CEO & co-founder, Plum. “Now we’re offering a great low-risk option for your savings with our market-leading Interest Pockets. At a time when people are saving more than ever, high-street banks have chosen to punish savers by cutting their interest rates to record-breaking lows. But we’ve got their back by providing the most competitive rates on the market at the most critical time.”
He adds: “Together with our investment platform and our pensions product, which is coming soon, our new interest Pockets cement Plum as an all-round money management solution to help you effortlessly build your wealth in one intelligent app.”