The most common types of questions we receive from our users are around our collection timings. We collect payments on a weekly cycle via Direct Debit, which, although different to what you may be used to with your traditional bank, offers a number of benefits. Here’s a quick rundown of how it all works, as well as a little more information on why we do things the way we do! Ultimately, it all comes down to our mission of making saving and investing available to everyone.
Why do you take payments via Direct Debit?
Although direct debit payments take a little longer, they’re a secure method of moving money, covered by the Direct Debit guarantee. Compared to quicker alternatives such as faster payments or debit cards, taking payments via direct debit is also a lower cost payment option for us as a business, so we’re able to reflect these savings in our fee structure.
We’re on a mission to help as many people as possible save and invest for their future – by offering a low minimum deposit of £1, and taking steps to keep our fees low (plus no fees for cash savings accounts) we’re able to make Moneybox an accessible platform for everyone to get started!
How does the Moneybox collection cycle work?
We collect from your Moneybox account by running a weekly collection cycle, which is the same for all our users. Each week, on Wednesday at midday, we collect your weekly savings total. This is the amount shown in the green circle in the home screen, which you can tap to edit any time before the collection. Once collected from your Moneybox account, your funds are ‘saved’ and your weekly savings total is reset for you to add funds for the following week’s collection. Any weekly deposits, one-off payments or payday boosts you have enabled on your account will be automatically added to your weekly savings total for the selected week’s collection.
The next day, we submit a direct debit instruction to your bank for the saved amount. We take all payments via direct debit, and doing so means we need to give three days notice before debiting from your bank account. This means that after the payment instruction is sent to your bank on Thursday, the money leaves your bank account early the following week. For the majority of users this will be Monday, however depending on your bank, or if there’s a bank holiday, this can occasionally be on Tuesday. Once debited from your bank account, your payment will be added to your balance in the Moneybox app by the end of the following day (typically the Tuesday).
For cash accounts – as late payment failures can occur on Tuesday and Wednesday, your money is deposited with the bank(s) who hold your funds on Thursday, at which point you’ll begin earning interest.
For investment accounts – we keep to the same weekly cycle as above. However investments have a slightly longer timeframe as they need to settle. This means by the following Wednesday after debiting from your account, your investments will have settled and you’ll be able to see the breakdown of your investment into each fund within your Moneybox app.
Why do you collect payments weekly?
Operating on a set weekly cycle gives you the opportunity to set up your preferred payment settings (e.g. automatic rounds ups, weekly deposits, or a recurring monthly payday boost) and lets us do the rest. Being able ‘set and forget’ means you can build your savings and work towards your financial goals without needing to keep updating your settings or make manual payments into your account. Plus, because our collection cycle is fixed and timings are the same each week, you always know what’s happening with your money and when.
For investment accounts, our payment cycle allows us to submit all deposits for investment on the same day each week to keep all of our users on the same weekly investment cycle. Through collecting and processing all investment trades in one single weekly transaction, as well as offering investment into a range of funds that are a lower cost investment option, we can pass these savings on to our users and keep our trading fees low.
Do fixed timings mean I could miss out on stock market gains?
At Moneybox, we believe that the best way to build your savings in the long term is by developing regular habits and investing in the right account for you. Rather than trying to time the markets and make deposits and withdrawals when times are good, remaining in the market long term is key to getting the most out of your investments. You can find out more about how staying the course and contributing regularly can be the best way to reach your goals in our article on Automating your investments.
If you have any questions about your account or your payments, our Customer Support team are happy to help! You can contact them either via the in-app chat or by emailing firstname.lastname@example.org.