Student Advice Service – Money Matters

News from the Student Advice Service at the University of Brighton

Money Week blog of the day – how banks can work for you

Making banks work for you – the techie way

In our smartphone and tablet-driven world it’s no surprise that banking is changing dramatically, with the rise of banking and savings apps. These can actually prove useful in helping you ‘take back control’ of your finances, as they have cunning ways of helping you identify your spending patterns and save money.

What is this app-based banking all about?

There are now a number of purely app-based banks, which don’t have a physical presence – Monzo and Starling Bank are two of the better known.

Many give real-time notifications when you spend or save, something traditional banks don’t do – so for example, if you spend £1.39 on a bottle of water in a well-known chain of caffeine-pushers (top tip – don’t ever spend money on something that comes out of a tap for free), you get an instant pop-up on your phone telling you what you’ve spent.

App-based banks can also give you insights into your spending habits, so you can see how much you spend in one particular shop each month or more generally how much you spend on entertainment or travel – which should make it easier to budget and keep track of your money.

There are also savings apps, which have functions such as calculating how much you can afford to save each week and automatically sweeping money into a separate savings account – though you can always tell the app to save less if you need to, or move the money back into your current account. This is intended to help you save without having to think about it. Have a look at what our colleagues at Save the Student say about savings apps.

For example, with Monzo you can set up ‘savings pots’ – money that’s in a pot can’t be spent and won’t appear in your available balance. However, if you run out of money, you can easily transfer funds out of your savings pots and back into your current account. If you create a new pot and call it ‘Coin Jar’, Monzo will automatically round up any purchases over £1 and add the difference to the pot. For example, if you buy lunch for £4.25 (top tip – don’t spend £4.25 on lunch in the first place, make a delicious, fresh and cheap packed lunch!), 75p will be added to your Coin Jar pot.  

I’m suspicious – where’s the catch?

Your money might not be protected in the same way as a traditional bank. UK-regulated banks such as Barclays and NatWest have the full £85,000 Financial Services Compensation Scheme (FSCS) protection (basically this means that if the bank goes bust you’ll definitely get up to £85,000 of your money back). Some of the savings apps and app-based banks also have FSCS coverage, but a few don’t – always check out how your money’s covered before parting with any of your (virtual) cash.

There are also drawbacks with a bank only existing in cyberspace – for example in order to deposit a cheque into your account you may have to post it off to the bank, and you may get better rewards, such as interest free overdraft facilities, with the ‘old school’ high street banks.

Where can I find out more?

There’s lots of info out there about app-based banks etc – check out and Save the Student – there’s even info on savings apps and chat bots (if you fancy taking money advice from an artificially intelligent entity…) and of course you can always come and talk to us in Student Advice.

**Get involved in the Money Week stall today** – Falmer campus, outside Westlain canteen 11.30am – 2pm


Helen Abrahams • February 12, 2019

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