Monzo has closed its Monzo Plus packaged account to new customers just four months after it was launched. Announcing the move on its community forum yesterday, Monzo said ‘things just haven’t gone the way they should have’.
The account charged a monthly fee, starting at £6, and offered exclusive card colours and what Monzo called ‘swag’, which included hoodies and stickers. Monzo has now withdrawn the product and refunded some existing customers.
Find out why these changes are taking place, and what they’ll mean for current Monzo Plus customers.
Why is Monzo Plus being scrapped?
According to the Monzo Community post, the current form of Monzo Plus ‘isn’t the best it could be’.
When it first launched, the account’s core features included new colours for your bank card, exclusive Monzo ‘swag’ – and a custom Monzo.me link. These perks costed £3 a month for early adopters, and £6 a month thereafter.
You could also opt-in for services such as travel or contents insurance for an extra monthly cost.
When we analysed the initial Monzo Plus travel insurance just before it launched, we found its cover from Pluto didn’t fare well against policies offered by other packaged accounts. Monzo then switched its travel insurance provider to Axa.
Monzo declined to comment further on the decision to scrap Monzo Plus.
The changes won’t affect Monzo customers who haven’t signed up for the Plus account. Monzo became a Which? Recommended Provider in our most recent banking survey, scoring highly for its customer service, communication and application process.
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What does this mean for existing Monzo Plus customers?
What happens next to your Monzo Plus account may depend on what you signed up for.
Anyone who opted for the £6 ‘supporter bundle’ will have their fees refunded, plus some interest, and this should be done automatically.
The ‘Monzo swag’ previously mentioned when the account was first launched will no longer be sent out, and there will no longer be prize draws to win a metal Monzo card.
All Monzo customers who signed up for a Plus account, including those who opted in to travel or contents insurance, will be contacted ‘in the next week or so’, according to the community post.
In addition, all customers have the option to cancel within the app. While the official post doesn’t mention a refund for those who didn’t take the ‘supporter bundle’, community members have reported receiving refunds and getting re-issued with the normal hot coral card to replace the one that came with the Monzo Plus membership.
Will Monzo offer a new packaged account in the future?
Monzo Plus was one of the bank’s revenue streams, in addition to its overdrafts and recently-launched personal loans.
A new 11-person team has been brought in to ‘start from the very beginning’ and work on plans for an alternative paid banking subscription service.
Monzo has promised regular updates and asked for more input from its sizeable community. It launched a customer survey to ask what customers would want from a premium Monzo account, and says it will be regularly asking people to test out new features as and when they are devised.
The best packaged bank accounts on the market
Most big banks offer packaged bank accounts, giving customers extra features and services – like insurance cover – for a fee.
What they offer, and how much they charge for it, can vary widely.
After analysing packaged bank accounts currently on the market, we’ve identified those offering the best value for money.
The Nationwide FlexPlus is our best packaged bank account. Costing £156 a year, it comes with £1,000 mobile phone cover; a £250 interest-free overdraft; car breakdown cover with roadside assistance, home start, nationwide recovery, alternative travel or accommodation and European assistance; and worldwide annual travel insurance plus winter sports cover.
Elsewhere, First Direct’s First Directory costs £180 a year, and includes worldwide annual travel insurance plus winter sports cover; mobile phone cover up to £1,500; car breakdown cover with roadside assistance, home start, nationwide recovery, alternative travel or accommodation and European assistance. But you’ll need to pay at least £1,000 a month into the account.
Find out more: best packaged accounts
Is it worth paying for a packaged account?
Packaged accounts can be good value, as long as the services on offer work for your circumstances. Before signing up to any packaged account, you should consider:
- whether you actually need the benefits
- whether the insurance gives you the right amount of cover
- whether you could get the benefits cheaper elsewhere
- whether you’re already covered by another policy you have