Monzo will now pay interest on children’s savings accounts in a move to help the next generation of savers “grow their money faster.”
In the next few weeks, children will be able to earn 3% interest (variable) on their savings using the digital bank’s free Under 16s account. The account, aimed at kids aged 6 to 15, allows them to manage their own spending and saving with oversight from their parents. Duygu Yenidogan-Schmidt, general manager for core banking at Monzo, said: “We know that saving can feel slow and unrewarding, especially when you’re a kid and the temptation to spend is everywhere. That’s why we’ve introduced some Monzo magic to help make saving feel good from the very first penny.”
This comes as new research from Monzo, which serves more than 13 million customers, found that Generation Alpha is a demographic of “Piggy Bankers.” Data showed 80% of people aged 8 to 15 save at least once a month.
Despite these efforts, the majority of young savers miss out on up to an estimated £162million in interest every month by keeping their savings in cash or current accounts instead of interest-earning savings accounts.
This figure is based on calculations that apply a 3% interest rate to the estimated £5.42billion currently held in children’s savings accounts.
Along with the new interest feature, kids will also get encouragement from a new digital mascot, the “saving sidekick”.
The sidekick is an animated dog character who makes saving more fun by rewarding every contribution—no matter how small—with lively reactions. This aims to help kids build that “little and often” saving habit.
Mr Yenidogan-Schmidt added: “Whether it’s seeing your money grow with interest or getting a salute from your saving sidekick, we want to cheer on the nation’s little piggy bankers and help them feel proud of every step they take towards their goals.”
The Monzo for Under-16s account gives children the opportunity to experience financial firsts like saving, budgeting, receiving pocket money, or using a card to pay in a shop, while giving parents or guardians complete control and visibility.
