Plum, the smart app for managing money, is today announcing the availability of free Interest Accounts, or ‘Interest Pockets’, for all of its customers.
In light of the COVID-19 outbreak and subsequent boom in household savings, Plum aims with its Interest Pockets to provide an easy, automated way to put more aside and grow that money in an interest-bearing account.
Plum is currently offering a competitive rate of 0.35% Annual Equivalent Rate (AER) for anyone who opens an Easy Access Interest Pocket*. This comes as an addition to the Easy Access Interest Pocket with 0.55% AER which is already available for Plum Plus (£1 p/m) and Plum Pro (£2.99 p/m) subscribers. Many major banks have slashed instant access saving rates to 0.01%**, so Plum’s rates will offer savers a better return compared to the equivalent easy-access accounts on the high street (see chart below for comparison).
Furthermore, money saved in any Easy Access Interest Pocket provided by Plum is held on Trust in an account provided by Investec. Because of this, 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.*** Money saved into a normal Plum Account (Instant Access Pocket) is protected in a different way as it is held in an e-wallet administered by Plum’s Electronic Money Provider, rather than directly with a bank. Plum’s provider maintains a specific UK customer bank account for all Plum customers, which is protected by e-money safeguarding rules.****
Plum’s unique Splitter allows customers to 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 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 Pockets with Plum.
Victor Trokoudes, CEO and co-founder of Plum, comments: “When spending dropped during lockdown, we immediately saw deposits into Plum grow. People are taking a closer look at their finances and want to make sure they are covered in the future. While we can’t predict exactly what lies ahead as the global pandemic continues, we do know that financial resilience will be critical for everyone. With Plum, you have the power to split your savings the way that works best for you, between our new Interest Pockets with its bank-beating interest rates, and our hand-picked investment funds. It’s all part of our strategy to make sure all our customers can effortlessly build wealth for the long-term.”