Plum vs Moneybox: Best Automated Investment App for Beginners?

It’s getting easier and easier to save money and to make smart investments from your phone. However, with all the platforms on offer, it can sometimes get confusing which options are worth the price of admission, and which aren’t. Some of the most popular automated savings and investment services available to users in the UK right now are money management apps. Plum and Moneybox are examples of apps that help you manage your money better. Both offer similar services – but which is the best choice for you?

Let’s take a quick look at Plum vs Moneybox, and see if we can reach a firm conclusion.

Plum vs Moneybox: Quick Summary

• Plum & Moneybox let you save and invest money automatically. Please note: as with all investments, your capital is at risk.
• Both Plum and Moneybox are free to use, but they also offer premium versions providing more features to manage your money.
• Both premium versions of these services offer a savings account and the option to invest in various investment funds.
• Both services are FCA-regulated and are fully encrypted.
• With Plum, you connect your bank account(s) and credit card, with Moneybox, you connect a card you make payments from.

What is Plum?

Plum is a money management app which has been around since 2016. In that time, it has built itself up as a leading platform in this space. Plum effectively can view your money and income via your bank accounts (and or credit cards) and adapts smartly to you so that it can make worthwhile savings on your behalf. It’s a great way to automate money you want to save and invest without taking too much time out of your day.

How Does Plum Work?

Plum offers a pretty simple service. Essentially, it works by accessing your bank account – securely – before calculating how much you can set aside every few days. It’s worth noting that you can add multiple bank accounts and even credit cards. Then, it will act as your complete money manager. It will automatically move money across to your Easy Access Interest Pockets (or our Primary Pocket) so you don’t have to.

You’ll even be able to communicate with the service through a sophisticated chat bot. It’s here where Plum will tell you what you’re setting aside and how well you’ve performed for the week. You can even use this service to ask for money to be taken out, or for the amount you’re depositing to be increased, for example.

Your savings with Plum are either stored in an e-wallet (the Primary Pocket) or they are stored in Easy Access Interest Pockets offering 0.20% AER for basic accounts and 0.40% AER for Plus and Pro accounts (more about these later). These interest accounts are provided by Investec bank, who do have the right to change the rate at any time.

Plum Investment Options

Plum also gives you the option to invest your savings. You can do this within the tax free (up to £20,000 per tax year) wrapper of a Stocks & Shares ISA (also known as an Investment ISA). Or in a generic General Investment Account (GIA) if you already have a Stocks & Shares ISA elsewhere.

In terms of where your money is invested, Plum has a nice and simple approach to investment options and risk levels which will likely appeal to beginners. You can invest your money in various ‘themes’ where various stocks and bonds are grouped into funds. A few examples of these ‘themes’ are ‘Tech Giants’ (think Apple, Facebook, Google etc.), ‘Clean & Green’ (Socially Responsible Companies) and ‘American Dream’ (which is basically the S&P 500).

There’s also a simple 3 option risk level to choose from which vary in levels of risk based on the breakdown of stocks vs bonds within the selected portfolio; Slow & Steady, Balanced Bundle or Growth Stack. Please remember, as with all investments. your capital is at risk.

Plum Account Options

Basic

• Earn interest on your savings (up to 0.20% AER)
• 1 Pocket to store your savings
• Auto-deposit rules (algorithm & round-ups)
• Get alerts when overcharged on bills
• Connect multiple accounts to see all transactions and regular payments in one app

Plus

All of the above plus:

• Earn interest on your savings (up to 0.40% AER)
• 3 Pockets for savings (e.g. split holiday savings from house deposit)
• Beginner friendly investments (automated, simple, jargon free)
• Access to all investment funds from £1

Pro

All of the above plus:

• Goals (set savings targets, track progress)
• Unlimited Pockets
• Exclusive saving rules (52 week challenge, ‘rainy days’ and ‘pay days’)
• True balance after your bills & other regular payments
• Monthly spending diagnostics vs lookalikes
• Cashback on brands such as Nike, ASOS or Groupon

Is Plum Safe?

Yes. Any money held within a Plum Easy Access Interest Pocket is FSCS protected. Meaning that your money is covered up to £85k across all your Easy Access Interest Pockets (or Investec Bank savings accounts), if the scheme applies to you. You’ll benefit from read-only bank integration, along with AES and 256-bit encryption to keep your data safe. You also log into the app with biometrics (fingerprint ot face ID) or a PIN, similar to most mobile banking apps.

What Fees do Plum Charge?

Here’s the best part – Plum is absolutely free to use from the word go if you are just looking to set money aside. That’s likely to appeal to anyone new to a money management app. What’s more, there are no restrictions on how much you can deposit and withdraw. 

Depending on the investment product you choose, of course, separate fees will apply. The average annual fund management and provider fee is 0.51%. This means you’ll pay just £1 each month for access to Plum Plus’ investment services, and there’s a max rate of 0.9% fund provider fee and 0.15% fund management fee on the subscription fees you pay annually. Plum Pro is £2.99 a month. Both subscription tiers are free during the first month and you can cancel anytime during your trial. Although again, please remember that as with all investments. your capital is at risk.

What is Moneybox?

Moneybox has been around just as long as Plum, meaning it should offer a similar level of confidence. It’s a savings and investment app tour de force, which means that it actively rounds up purchases to the nearest pound, and saves any change you make. Therefore, if you were to spend £4.33 in a shop, Moneybox would save 77p for you. The service also offers some interesting investment opportunities, too, meaning it’s well worth dipping further into.

How Does Moneybox Work?

To start saving money with Moneybox, you’ll need to set up a credit card or debit card that you make payments with. This means that, each time you pay for something on that card in public or online, the app will detect change and set it to one side.

You can choose from one of three setup levels, too, meaning that if you’re unsure if you want to throw yourself right into the app, you can take things at a slower pace if need be. You’ll also be able to login and invest money through various options.

Moneybox Investment Options

Moneybox offers some great choices for the curious investor. You can set up a pension pot through the app, as well as a general investment account GIA. A GIA is likely to be your best default option if you are completely new to investing and are not likely to be saving huge amounts of money.

You might also want to invest up to £20,000 a year into a stocks and shares ISA, or £4,000 in a stocks and shares LISA, before you have to worry about paying for tax. Although do keep in mind that a lifetime ISA (LISA) will count towards your total annual ISA limit of £20,000. You can even set up a junior ISA to manage cash for your children.

In terms of portfolio options Moneybox have a simple approach. Ideal for those who don’t want to get involved in picking funds and just need a passive investment option. The three portfolios on offer are based on risk level – Cautious, Balanced and Adventurous.

Is Moneybox Safe?

There are always going to be some risk with any investment, and thankfully, Moneybox is backed by the FCA. This means that you will benefit from plenty of protection up to £85,000. As with Plum, the service also benefits from 256-bit encryption standards.

What Fees do Moneybox Charge?

Moneybox is, like Plum, free to begin with. Moneybox will charge you £1 a month after your trial period. There is also a flat 0.45% platform fee which applies each year.

You’ll also be charged 0.3% max for fund provision each year, though expect to pay this each month. Whereas Plum will charge up to 0.9%. Although it’s worth keeping in mind this charge varies depending on portfolio choice.

Again, similar to Plum, Moneybox do also offer savings only in the form of a Cash Lifetime ISA which has no fees applicable and pays 1% AER.

Plum vs Moneybox: Pros and Cons

So – it’s time to break things down even further. What are the pros and cons of each service?

Plum Pros and Cons

• Plum is free to use for the savings and basic money management aspects with the option of paid premium accounts to get into investing and additional money management features.
• Plum will actively set aside money for you so you don’t have to remember to do it yourself.
• The in-app notifications are great and keep you well informed about your finances.
• Plus and Pro accounts are great paid upgrade options at just £1 and £2.99 per month respectively.
• Plum offers a roundup, 52 week challenge, rainy days and payday options as well as the core service of automated savings.
• Plum offers you easy in-app switching for bills and utility providers which are overcharging you.
• There is some concern over customer service availability in that there’s no 24 hour coverage, although that’s unlikely to be a major issue for most.
• FCA regulated with plenty of encryption.

Moneybox Pros and Cons

• Moneybox offers a huge range of investment options, including personal pension services.
• Fund charges are very reasonable, as are annual rates.
• Investments are free to get into for the first three months.
• It’s extremely easy to use and get used to.
• FCA-backed with plenty of encryption.
• Withdrawals are quick and easy, and very flexible (although granted Plum are even quicker).
• However, Moneybox’s fees may not be a great fit for anyone looking to invest very small amounts.

Plum vs Moneybox: Which is Better?

Both Plum and Moneybox offer a great range of services, but both work on fairly different sides of the investing and saving coin. Plum is great if you have trouble saving on the whole and want a simple no fuss solution, whereas Moneybox has a larger range of accounts such as a personal pension.

In terms of investment options Plum offers more fund options and is cheaper overall. So if you are looking for more focus on starting to save money and smart ways to do so, and potentially looking to make a start with investing then Plum is likely to be the best choice for you.

As an added bonus if you sign up to Plum you can get a free 30 day trial to try out Plum Pro (then £2.99 per month).