Save the change

How clever apps and tools can help you save your digital pennies

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Save the pennies and the pounds will take care of themselves has long been sound financial wisdom. Now, thanks to improving technology, you can do it almost without effort – our guide explains how banking apps can conveniently help build your savings pot.

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What does save the change mean?

You might have heard the term ‘save the change’ before, but you may be a little unsure as to what it is. When it comes to banking and savings, it’s straightforward – save the change isn’t new, it’s just been updated and innovated to be more convenient.

For generations we’ve been spending our cash and receiving a handful of loose change in return. The thriftier among us would turn out our pockets to store the coins in a jar at home. Once full, we might take it to the bank or use it for spending money on the annual family holiday.

Modern save the change is the same concept, but because most of us now pay by card, it uses technology to move it on a step.

Rather than pocketing cash, our spending is rounded up digitally to the nearest pound, with the extra pennies moved to a separate savings account. It’s a way of saving every time you shop without even noticing it.

As the popularity of save the change has grown, more banks and banking apps have seized on the idea, providing their customers with cleverer and more convenient ways to save.

How does save the change work?

Banks and banking apps can make saving so easy that you forget you’re even doing it. If your bank offers the service, it’s simple to set-up as follows:

  1. Make sure you have both a current account and linked savings
  2. Register for save the change and turn it on – this can be done through internet banking
  3. Spend as normal on your debit card
  4. Your bank will round up the purchase to the nearest pound – but only if your current account is in credit
  5. The change from each purchase will be totted up and added to your savings account – sometimes even by the next working day

Who offers save the change features?

From traditional banks to newer so-called challenger banks and banking apps, there are an increasing number of options for customers looking for save the change functionality. These include:

Bank of Scotland, Halifax, Lloyds and TSB: All offer similar ‘save the change’ options that you can turn on to round up any spending to the nearest pound and move into a linked savings account. You can set up save the change and turn it on and off through internet banking, mobile app, by phone or in branch. The savings are totted up and will show in your savings account on the next working day.

Monzo: As long as your balance is over £10 and your purchase more than £1, Monzo rounds up your spending to the nearest pound and adds it to your savings pot it calls a ‘coin jar’. Just make sure you have updated to the latest version of the Monzo app.

Revolut: As with other save the change options, Revolut rounds up your spending and saves the change. Its ‘vaults’ option allows you to save in 25 different currencies plus three cryptocurrencies, and in smaller currencies it rounds up to the nearest five, 10 or 100. For example, the Polish zloty is rounded up to the nearest five, the Czech koruna to 10 and the Japanese yen to 100. As well as save the change functionality, you can also set up recurring and one-off payments to your ‘vault’.

Starling: Starling’s save the change equivalent is ‘goals’. As the name suggests, it encourages users to come up with a goal (ie. a family holiday) and then save towards it. Each ‘goal’ is a separate savings pot within the app where you can choose to direct your change when you make purchases. As well as rounding up your spending to the nearest pound, Starling allows you to save faster with an option to multiply the amount.

Plum: Plum is a smart banking app that works with your existing current account and is supported by all the UK’s major banks. It uses artificial intelligence to analyse your spending every few days and regularly transfer money into a savings account on your behalf. Depending on your view, you can choose to be ambitious or cautious with your savings, meaning more or less will be set aside. Plum’s save the change option ‘round ups’ works on the same premise as other providers. Head to the ‘brain’ section of your account to enable or pause ‘round ups’.

How do I access my save the change savings?

Linked savings accounts and savings pots used for ‘save the change’ are generally easy access, so there is no fee for withdrawing any of your money and you can get to it quickly. Accounts that typically offer higher interest rates may have a notice period, which will mean you have to wait to withdraw your cash or pay an early release fee. Check the terms to make sure

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Is save the change worth it?

In most cases, save the change is less about generating lots of interest from a high performing savings account, and more about developing savvy financial habits and – with some of the more innovative apps – making your money easier to handle.

Used smartly it can help you grow a nice nest-egg and is so convenient you barely even realise you’re saving.

The daily amounts aren’t high, and there’s no risk involved because accounts also have in-built safety nets, such as not transferring anything to your savings pot unless your current account is in credit. This way you won’t leave yourself in debt through rounding up purchases.

How much could I save?

This depends on your spending habits. Lots of small transactions throughout the day would mean you’re likely to save more than through the occasional large purchase.

If you round every purchase up to the nearest pound and buy a coffee in the morning, a sandwich for lunch, use public transport and meet friends out for dinner – then the amount you save could quickly add up.

For example, let’s assume that Monday to Friday, you use your card four times a day to ‘tap and go’ at local stores.

We can also assume that your average bill needs to be rounded up by 50p to make the next pound. This gives a daily saving of £2 – or £10 per week. Over the course of a year that’s £520 plus interest.

If you’d like some help working out how much you could save or how long it will take to reach your savings goal, then use our Savings Calculator.

What is the best round-up app?

Deciding on the best ‘save your change’ app is a matter of personal preference.

If you’re a customer of a traditional bank such as Lloyds or TSB, then you may think it’s easiest to just use their save the change function.

However, if you want more flexibility, then challenger banks offer plenty of alternatives.

Those such as Monzo and Starling allow you to set up different savings pots rather than just one savings account, which means you can organise your money in a way to suit you and put money aside for different reasons – holidays, days out, meals out and so on.

Then there are apps, such as Plum, that embrace open banking – which is essentially a secure way to give your chosen save the change provider access to your financial information.

The advantage with Plum is that it’s not just arbitrability rounding up your purchases to the nearest pound, but analysing your overall spending to try to optimise what you save.

If you’re interested in finding out more, read our guide to digital-only banks.

How can I sign-up for a save my change account?

With more and more banks and banking apps providing this option, you’re spoilt for choice when it comes to saving your change.

A good option is to compare current accounts with MoneySuperMarket. We’ll show you a list of accounts from our leading panel of providers including information on overdrafts, fees, switching incentives, rewards or other perks each account offers.

When choosing the right account for you, it’s not just save the change feature you should look out for.

You should also check you meet the opening criteria, check you’re happy with the internet banking or phone app you’ll be using and consider other extras such as cashback, fee-free overdrafts, in-credit interest and travel, mobile and breakdown cover.

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