Plum vs Moneybox: Which is The 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. Two of the most popular automated savings and investment services available to users in the UK right now are Plum and Moneybox. Both offer similar services and savings goals support – but which is the best choice for you?

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

Plum vs Moneybox

Quick Summary

• Plum lets you save money automatically with targets and a Facebook Messenger function.
• Moneybox connects to your cards and rounds up your purchase, saving or investing your change.
• Both Plum and Moneybox are free to use to begin with.
• Both services offer a range of savings accounts and investment options.
• Plum is better suited to people looking to save money in the short term.
• Moneybox is likely to be better for those looking to invest money over a longer period.
• Both services are FCA-regulated and are fully encrypted.
• With Plum, you connect your personal bank account, and with Moneybox, you connect a card you make payments from.

What is Plum?

The Plum savings app has been around since 2016. In that time, it has built itself up as a leading auto-money-saving platform. Plum effectively has access to your money and income via your main bank account, 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 save every few days. Then, it will act as your complete wealth manager. It will automatically move money across to your savings pot so you don’t have to.

You’ll even be able to communicate with the service through Facebook Messenger, which is a really nice touch. It’s here where Plum will tell you what you’re saving 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 saving to be increased, for example.

Plum Investment Options

Plum isn’t just your run of the mill round up savings app. It gives you the option to invest your savings too. You can do this within the tax free wrapper of a Stocks & Shares ISA (also known as an Investment ISA).

In terms of where your money is invested Plum have 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’ (similar to an ETF) where stocks are grouped into options. 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.

Plum Performance Track Record – is Plum Safe?

Plum seems to have a good track record with its customers thanks to its innovative savings system and its messenger system. Is it the best save the change app out there? It’s certainly a challenger, but let’s consider its safety and security features before we can be too certain.

Thankfully, there’s not much to worry about here. You’ll benefit from read-only bank integration, along with AES and 256-bit encryption to keep your data safe.

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 save money. That’s likely to appeal to anyone new to a round up savings 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 may apply. This means you’ll pay just £1 each month for investment services, and there’s a max rate of 0.9% on the fees you pay on top, annually.

What is Moneybox?

Moneybox has been around just as long as Plum, meaning it should offer a similar level of confidence. It’s a round up savings 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.

Moneybox Performance Track Record – Is Moneybox Safe?

Moneybox has a solid track record. It also offers a socially responsible or ethical investment option which will help to ensure you only place your money in services and stocks which are ethically responsible. What’s more, when you start investing, it’s very easy to choose between different options to set your risk level based on your experience.

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. There are £1 fees for investment accounts and competitive rates there on out.
• Plum will actively save for you so you don’t have to remember to do it yourself.
• The Messenger service is a great touch, and is very easy to use and manage.
• Investing is cheap to get into, and the service benefits from a huge amount of security.
• Plum offers a roundup, 52 week challenge, rainy days and pay day options as well as the core service of automated savings.
• There is some concern over customer service availability in that there’s no 24 hour coverage.

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.
• However, Moneybox’s fees may not be a great fit for anyone looking to make money in the short term.
• Some users feel that Moneybox offers a slow burn – if you have the time to give it patience, it might work well for you.

Which is Better Plum or Moneybox?

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 will make sure you’re making the most of that change with a larger range of investment products.

In terms of automated investing Moneybox may just inch it for me as it offers plenty of variety in choice of investment products and a simple risk based portfolio option. It’s also very reasonably priced.

However, if you are looking for more focus on starting to save money and smart ways to do so, and potentially looking to make a small start with investing then Plum is likely to be the best choice for you.