Money-saving guru Martin Lewis has revealed how auto-saving apps could save you money without you even noticing, potentially boosting your balance by thousands of pounds.
The apps use tech and data algorithms to calculate how much you can afford to save and then moves the cash from your current account.
If you struggle to put money aside, the apps could come in handy to get you in the habit of saving.
Martin appeared on ITV's Good Morning Britain today to explain how a handful of the apps work.
He said: "The apps have an algorithm that looks at your bank account and sees how much money you can put aside, and automatically does it for you.
Martin Lewis shares money-saving tips for 2020 – you could put aside a fortune
Millions of Brit's ignore these 'dangerous car defects' and put lives at risk
"There are lots of these auto-savings apps coming out, people really like them and ask me questions like 'are they safe or not?'
"The answer is they’re good, the interest isn’t that good and they’re relatively safe but not as safe as a savings account."
You might be better off moving the cash to a normal savings account every few months unless you've chosen to invest, Martin explained.
The app Chip has access to your bank account and works out every four days what to set aside.
Martin explained how you earn no interest on its savings account and it isn't covered by the usual protective barriers.
It is, however, ring-fenced by Barclays so the risk of losing your money is slimmer.
Tandem works similarly but lets you make regular deposits and one-off deposits.
It gives you 0.5% interest on your money, unlike Chip.
This app is a fully regulated UK bank, which means savings of up to £85,000 are protected by the Financial Services Compensation Scheme.
One that started off as a “chatbot” in Facebook Messenger is now available as an app called Plum.
The service, which moves what it works out what you can save into your account, does not provide any interest on your cash.
Though you can invest in stocks and shares and chose the level of risk you're willing to take.
Your return will outperform savings interest rates if it does well over the long-term, but if it doesn't, you will lose money.
The final app the money guru discussed was MoneyBox.
This app works by rounding up your transactions so if you buy a coffee that costs £1.80, it'll put the 20p to the next pound into savings for you.
It's currently providing the top Lifetime Isa paying interest of 1.4 per cent.
This could be the most suitable option for first-time buyers aged 18 to 39.
It also offers a 95-day notice account paying an interest rate of 1.65 per cent.
And with both accounts, you will get the full £85,000 per person protection.
Source: Read Full Article