UK based startup Moneybox announced the official availability of The Moneybox app, which launched today in the App Store. The innovative app enables users to round up their everyday card purchases to the nearest pound and invest the spare change.
For example, when you buy a coffee for £1.80, the purchase will appear in the app and you can choose to ‘round up’ to the nearest pound. The additional 20 pence is set aside to invest across thousands of companies worldwide including Apple, Facebook, Netflix and Disney, via three tracker funds. In addition to round ups, the app also allows users to set up weekly payments and make one-off deposits into their Moneybox account.
To help users decide how they would like their money to be invested, Moneybox offers three ‘starting options’ – cautious, balanced and adventurous. Each starting option contains different allocations of the same three tracker funds – a Henderson cash fund, a Vanguard global equities fund and a Blackrock property equities fund. Users can customise their investment choices using a simple slider interface.
Targeted at Millennials, the app aims to make it easier than ever for people to start saving and investing. Despite the fact that shares have consistently beaten cash when held for longer periods of time , recent data from HM Revenue & Customs shows that over 95% of under 35s choose Cash ISAs over Stocks & Shares ISAs. This should be a matter of particular concern when interest rates are at a record low.
Research from Moneybox revealed that the two main reasons why Millennials don’t invest are that they think it’s too complicated and that they don’t have enough money to get started. By enabling users to sign up in minutes from their mobile phone and start investing with as little as £1, Moneybox hopes to open up investing to a new generation.
The Moneybox team is backed by £3.4m of pre-launch funding from leading investors including Oxford Capital and Samos Investments.
How does Moneybox make its money?
Moneybox charges a subscription fee of £1 per month to cover transaction fees, and a platform fee of 0.45% per year. Users will not be charged a subscription fee for the first three months and can withdraw their money free of charge at any time. Moneybox was recently authorised by the Financial Conduct Authority (FCA) as part of its flagship Innovation Hub programme.
The company has recently appointed Daniel Godfrey, who has been advising the company during the authorisation process, to the Board of Directors. Mr Godfrey was formerly Chief Executive of the Investment Association, the representative body for the UK’s £5.5 trillion investment management sector.
Ben Stanway, Co-founder of Moneybox commented:
“The team has worked incredibly hard over the last year to create a way for people to invest, via three tracker funds, into thousands of leading companies around the world with a single swipe. We’re very proud to have made it possible to open an ISA in a couple of minutes from your mobile phone and get started with just £1. By making it easy, engaging and accessible, we hope to encourage people to get into the habit of setting money aside little and often, and help a whole new generation start investing towards their future. Our beta testing has shown that users are making about 30 purchases a week with an average round up amount of 28p – that’s £8.40 per week, or around £440 per year, just from saving your spare change! We’ve also seen that 75% of users are making one-off or weekly deposits in addition to round ups.”
Daniel Godfrey, Non-executive Director added:
“It’s been eye-opening working with Moneybox to create something that will breathe new life into the savings and investment industry. We’re extremely excited to be launching a product that can truly engage young people with saving and investing – a solution which I believe is long overdue.”