How much you need in savings before Monzo Max pays for itself
Key Points
- Monzo pays 2.75% AER on Instant Access Savings for free customers and 3.25% for Perks and Max subscribers
- Perks costs £84 a year, so the 0.5% boost breaks even at £16,800 in savings
- Max costs £204 a year, pushing its break-even to £40,800
- Tax on interest lifts the real break-even to £28,000 and £68,000 for higher rate taxpayers
- Chase and Saga pay 4.5% with no subscription, beating Monzo's boosted rate
Monzo customers need £40,800 in savings before the interest boost on its £17 a month Max plan covers the cost of the subscription.
The digital bank updated its tiered interest structure into its Instant Access Savings terms on 6 July, confirming that rates now depend on which Monzo plan a customer holds.
Customers on the free account or the Extra plan earn 2.75% AER (variable) on Instant Access Savings and 3.15% AER (variable) on Select Access Savings, while subscribers to Plus, Premium, Perks and Max earn 3.25% and up to 3.65% respectively, according to Monzo.
That extra 0.5% AER carries a price. Perks costs £7 per month, or £84 a year, and Max starts from £17 per month, or £204 a year.
Dividing the annual subscription cost by the 0.5% uplift produces the balance a saver needs before the extra interest matches the fee. For Perks, the break-even point sits at £16,800. For Max, it sits at £40,800.
What the numbers look like in practice
A customer holding £10,000 in an Instant Access Savings Pot earns £275 a year on the free rate and £325 on the subscriber rate. The £50 difference falls £34 short of the cheapest qualifying plan, so the subscription loses money on interest alone.
A customer holding £16,800 earns £546 at 3.25% against £462 at 2.75%, an £84 gap that exactly covers a year of Perks. Only balances above £40,800 generate enough extra interest to pay for Max.
Tax is also a consideration for larger balances. HMRC gives basic-rate taxpayers a £1,000 personal savings allowance and higher-rate taxpayers £500, and interest above those thresholds attracts income tax at the saver’s marginal rate.
A higher rate taxpayer who has used their allowance keeps only 60% of the uplift, which pushes the effective break-even to £28,000 for Perks and £68,000 for Max. Monzo’s Instant Access Cash ISA versions pay the same tiered rates without the tax exposure.
How the boosted rate compares with the wider market
The Max rate trails the top of the easy access market. The highest easy-access savings rate currently stands at 5.00% AER, including bonuses, offered by Revolut and LemFi, according to Moneyfacts, and Chase and Saga both pay 4.5% with no subscription attached, per MoneySavingExpert.
A saver with £16,800 at 4.5% earns £756 a year, £210 more than Monzo’s boosted rate pays on the same balance, before counting the £84 Perks fee.
The LemFi rate includes a six month bonus of 1.89% and drops to 3.04% AER afterwards, so savers comparing headline rates need to check the underlying figure.
Monzo’s rates apply on balances up to £1,000,000, and the Financial Services Compensation Scheme protects eligible deposits up to £120,000 per person across all Monzo accounts.
However, it should be noted that Monzo’s plans bundle other benefits alongside the rate boost, including insurance products, so the interest calculation covers only one part of the subscription’s value.
On the savings maths alone, the numbers show that the boost functions as a top-up for customers who already pay for a plan rather than a reason to buy one.
