Moneybox review: The best performing ISA for the past 5 years

Savers. If you need access to your money in the next five years and are therefore unable to invest it, then you could do a lot worse than the Moneybox Easy Access A cash ISA is a type of individual savings account where you can earn tax-free interest on your saved cashCash ISA.

Completely inexperienced investors, and in particular those that don’t have a good starting pot and historically find it difficult to save will find features such as rounding up and payday boosts a painless way to build an investment pot. Simple tracker funds offer a beginner-friendly and effective way to invest and the app itself is super easy to navigate.

For people saving for their first home, the Lifetime ISAs (Individual Savings Accounts) (LISAs) are designed to help you save for your first home or retirement and come with an automatic 25% government bonus on all contributions up to the value of £4,000. There are stocks and shares LISAs – where you invest your savings – and cash LISAs – where you earn interest on your savings. You must be between 18 and 40 to open a LISA and all income, capital gains and interest earned within LISAs is tax-free, although these funds can only be used to purchase your first home or for retirement. Ensure you are familiar with the rules surrounding this account before utilising itLISA is excellent and can help you build your savings pot quickly.

The brilliant thing about this platform is that you can literally get started with just £1 (although you should bear in mind that after the first 3 months, you will be subject to a £1 monthly account fee)

General investment account (GIA)

Moneybox is a good option for anyone who is totally new to investing, struggles to save a decent starting pot, and would like access to hands-off, A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.ready-made portfolios that are diversified but have historically performed well, indicating that they are well managed by professionals.

However, if you fit this bill, then the likelihood is that you haven’t invested before, which means it is safe to assume that you don’t already have an Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAISA.

Investing into an ISA effectively shields your gains from any tax, meaning you get to keep more of what you earn from your investments. Given that the ISA at Moneybox offers access to all the same features and investments as the GIA at the same cost, this would be a better option.

Stocks and shares ISA

This isn’t the cheapest ISA on the market but according to our independent research, this is the best-performing ready-made ISA for the last 5 years, net of fees (for more information on the performance, scroll down in this review). For a beginner who lacks the confidence to pick and choose their own assets, this is a very compelling reason to pick this ISA. Also, the access this ISA grants to the other products and services at Moneybox means that this really is a good, all-around option.

Of course, you do need to pick your own portfolio, but given the lack of choice and the fact that they have performed well in every category, I don’t see this as an issue.

If a ready-made portfolio isn’t for you and you would rather take more control of where your money is invested, then there are a range of tracker funds, exchange-traded funds, and US stocks to choose from. I’ll go into more detail on this below.

Read more about ISAs

Junior stocks and shares ISA

What’s unique about the Moneybox A junior self-invested personal pension (SIPP) is a way of investing money for your child’s future retirement, free from capital gains and dividend tax. As it is designed to be started before a child turns 18, it must be opened by a parent or guardian although anyone can contribute. Once the beneficiary turns 18, they take control of the account, however, the money within the account cannot usually be accessed until age 55 (rising to 57 in 2028 and likely to rise further)Junior ISA is the 3.8% The annual equivalent rate (AER) is used to describe the percentage of interest you’ll receive on your savings and investments. AER accounts for compound interest whereas the gross interest rate does not. AER is also known as APY (the annual percentage yield). AER on any uninvested cash. However, the Junior ISA is only available to those who already have an account with Moneybox.

So how does this account stack up against the competition in terms of how the portfolios have performed for the past 5 years? The average across all the Moneybox portfolios available via the Junior ISA is 54.2% for the past 5 years, net fees. To put this into perspective, the next highest average score achieved by any other platform offering a Junior ISA is Saxo Bank, whose previous 5-year return, net fees, amounted to 35.4% and the average 5-year returns of any ready-made portfolio in a Junior ISA, net of fees, were 24.4%.

So, again, if you are new to investing and would rather set it and forget it, then this is a great option. However, it’s important to point out that a simple index fund tracking the S&P 500 would have returned more in the same time frame. That being said, many of these types of funds require a higher initial investment and therefore may not be accessible to investors who are just starting out.

Lifetime ISA

There are not that many platforms offering a Lifetime ISAs (Individual Savings Accounts) (LISAs) are designed to help you save for your first home or retirement and come with an automatic 25% government bonus on all contributions up to the value of £4,000. There are stocks and shares LISAs – where you invest your savings – and cash LISAs – where you earn interest on your savings. You must be between 18 and 40 to open a LISA and all income, capital gains and interest earned within LISAs is tax-free, although these funds can only be used to purchase your first home or for retirement. Ensure you are familiar with the rules surrounding this account before utilising itLifetime ISA in the UK so Moneybox has even less competition on their ready-made portfolios for this account. This is a hugely underutilised account for those saving for a first home, although the limit is much lower than a standard ISA at £4,000 a year.

This is still a great option and the combination of the high-performing portfolios and the 25% government bonus means that if you were to deposit the annual limit for five years and add the average historical returns across all the Moneybox portfolios, you would have amassed £29,930, with your total deposits amounting to £20,000. Not bad!

Read more about Lifetime ISAs

Cash ISA

At 5.16% AER, this is the leading rate for any A cash ISA is a type of individual savings account where you can earn tax-free interest on your saved cashcash ISA for the first 12 months after opening your account. But be warned, once that 12-month period is over, your rate will automatically decrease by 0.96%. In addition, balances of under £500 will be subject to a very low rate of 0.75% so this wouldn’t be a suitable product for small amounts.

In addition, make four withdrawals from this account in a 12 month period and you will be subject to a low rate of 0.75%.

Personal Pension

It’s important to note that the Moneybox pension account offers access to four funds, which differ from the ready-made portfolios offered via their other accounts. That is because these funds are specifically designed to help people achieve their retirement goals. The Blackrock LifePath fund makes adjustments to your investments, reducing your exposure to risk automatically as you approach retirement age.

There aren’t a lot of options here. Outside of the Blackrock and Fidelity funds, the only other options are the ESG is an investment approach that takes environmental, social and ethical governance factors into account alongside more traditional financial factors.ESG fund and the Islamic fund. However, this lack of choice may suit some new investors. Still, it’s important to know whether these funds are working hard towards growing your money. Here at Investing Insiders we have conducted some preliminary analysis into Starter Pension Funds across the industry. These are funds which are specifically recommended by the platforms for beginners looking for an easy entry point. Looking at the 5-year returns provides more insight into the long-term historical returns, and in this respect, only the Fidelity World Acc fund had enough historical data. However, I can tell you that the cumulative returns for this fund over the past 5 years has been 80.4% which is still represents one of the best returns out of any Starter Pension Fund we have analysed to date. In fact, the 5-year average performance across all Starter Pension Funds in the industry came to 30.5%, which shows how strong the performance of this fund has been.

In addition to the A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.ready-made portfolios, Moneybox provides access to tracker funds and some US stocks. It’s by no means a comprehensive offering of investment options such as those you would find at Hargreaves Lansdown or Trading212; however, that can end up being overwhelming for beginners, and there are some decent options here for growing your wealth.

Read more about SIPPs

Tracker funds

Tracker funds (also referred to as index funds) are designed to track the performance of a specific market or index, usually by mimicking the assets within the index. In this way, they also replicate the performance, aiming to expose the investor to the entire index at a fraction of the cost. Tracker funds focus on financial growth, stability and diversification.

It’s important to note that tracker funds are a passive type of investment and are therefore not designed to beat the market. However, not many actively managed funds do succeed in beating the market, so this is still a solid option when it comes to returns.

There isn’t a massive range of tracker funds at Moneybox; however, there are some good options, including the S&P 500 ETF by Vanguard and some decent ESG is an investment approach that takes environmental, social and ethical governance factors into account alongside more traditional financial factors.ESG options.

ETFs

ETFs provide another affordable way of gaining access to a large basket of assets that have been diversified. Moneybox provides access to a small number of ETFs managed by the likes of Legal & General, iShares, Vanguard and JP Morgan, to name a few.

Read more about ETFs

US stocks

Moneybox provides access to a selection of US stocks but only via the ISA. It’s important to remember that when you buy US stocks, you will incur an A foreign exchange (FX) fee is added to all trades involving foreign currencies. If you buy a stock that trades in US dollars, for example, and your home account is in GB pounds, you’ll need to pay an FX fee.FX fee. At Moneybox, the FX fee is set at 0.45%, which is fairly standard (I have come across FX fees as high as 1.5% at eToro and as low as 0.002% at Interactive Brokers).

One of the things that makes Moneybox stand out is its access to Fractional shares are portions of shares (or ETFs) that are smaller than one whole share. They are designed to make ownership of large, expensive shares more accessible. fractional shares. There are actually not many ISAs that offer fractional shares due to a lack of clarity when it comes to legislation surrounding fractional shares. However, in November 2023, the UK government officially announced their intention to make this officially permissible.

Moneybox also offers a tool called Weekly Stocks. This allows you to invest a set amount of money every week into the stocks of your choice rather than just investing a lump sum at the start. Effectively, this means you will be drip-feeding your money into the market, which can help smooth out market volatility and avoid buying shares when the price is high.

Socially responsible investing (ESG)

Moneybox offers two ways to invest in line with your values. One is to buy into one of their socially responsible Starting Options (there are three available, one in each risk category) or you can take the initiative to build your own ESG portfolio from their range of funds.

Savings accounts

In addition to their range of investment products, Moneybox has a good range of savings accounts, which includes the Cash ISA with the second highest rate in the UK after Plum who just manage to take top spot.

Rates are as follows:

Money-saving tools

As mentioned previously, Moneybox is aimed at those who historically struggle to save (there are enough of us out there). They have a range of tools designed to make saving painless, including round-ups where each time you spend, the app rounds up the transaction to the nearest pound and puts this amount to one side. There is also a payday boost option where you select an amount and date to automatically leave your account.

I’m going to be honest; if this is your primary reason for using this account, then I personally prefer the algorithms used at Plum, which use AI to determine an amount based on your income and expenditure. This ensures you are never left short and you won’t notice the small amounts leaving your account. However, you won’t get all the products and investments at Plum (that’s not to say there aren’t very decent investment options there) that you can access at Moneybox, in particular the LISA.

Ready-made portfolio performance

As mentioned, Moneybox’s ready-made portfolios have performed well when compared to their robo-advisor counterparts. So if you are looking for an uncomplicated way to start investing, with a low minimum starting amount and handy tools to help you grow your pot quickly, then this is a decent option. But just remember that this data looks great when compared to other robo-advisors; however, when you compare the same data across the whole market and even simple tracker funds, the results are less favourable.

Lowest risk portfolio for cautious investors – 5-year average 10.8%

Medium risk portfolio for confident investors looking for a balanced portfolio – 5-year average 22.8%

High-risk portfolio for adventurous investors – 5-year average 44.4%

Here’s how the ESG is an investment approach that takes environmental, social and ethical governance factors into account alongside more traditional financial factors.ESG Starting Options have performed in recent years:

This is in line with the performance of their non ESG funds and represents decent returns for ready-made portfolios.

There’s no web platform here. You either succumb to the app or go elsewhere for your investment needs. Many reviewers have marked Moneybox down for this omission; however, I’m not sure it’s a bad thing. The app is definitely aimed at the generation that wouldn’t be seen dead without a smartphone and can happily conduct most of their affairs on the move.

Mobile app
The mobile app is highly functional and easy to navigate. It is almost childlike in its appearance, but don’t let that put you off. From here, you can deposit, withdraw, save, tap into the tools, invest, and manage your accounts. There is a section called Discover that can provide a breakdown of your account and spending insights, although spending insights are little more than a list of transactions that would be more up-to-date on your actual banking app.

The savings accounts are all free – and with the great rate available on their A cash ISA is a type of individual savings account where you can earn tax-free interest on your saved cashCash ISA I see no reason why you wouldn’t tap into that. However, there are fees associated with investing, and for very small amounts (which this kind of service seems aimed at), they can be significant.

• £1 Monthly subscription fee (free for the first 3 months)
• 0.45% platform fee
• 0.09% – 0.88% fund provider fee
• 0.45% FX fee for US stocks

Fees differ slightly for pension accounts and are as follows:

£0 monthly subscription fee

• 0.45% platform fee on balances up to £100,000
• 0.15% platform fee on balances over £100,000
• 0.09% – 0.88% fund provider fee
• No stocks available

To put this into perspective for actual costs and give you an idea of how this compares to other robo-advisors – here is a breakdown:

Managed Portfolio annual cost

Please note: all published fees are correct at the time of publication. However, we suggest checking Moneybox’s website for the most up-to-date figures.

For larger pots, Moneybox is coming in just higher than Wealthify; however, when you take the portfolio performance into account, this seems worth it.

As Moneybox aims to simplify investing for beginners, you wouldn’t expect there to be a great deal of research and tools available. However, they are very transparent about the performance of their portfolios (and with good reason) and they provide a Key Investor Information Document (KIID) on all their funds, which can give you the risk rating, charges, past performance, and objective.

What they don’t do is offer much guidance on how to select your funds or stocks, or even identify your risk profile. You also won’t find any fundamental data, charts, or an economic calendar.

Tools include a very basic calculator that projects your earnings based on your weekly deposits, a mortgage calculator, and a pension calculator. There is also direct access to humans who are qualified mortgage advisors, as well as a mortgage in principle to help you calculate how much you could borrow from a lender.

You can trust Moneybox with your investments as they have all the appropriate levels of security in place and consumer funds are held by a third party to ensure they are safe should Moneybox fail. Moneybox is authorised and regulated by the Financial Conduct Authority (FCA), which ensures they comply with the strict criteria laid out by the FCA.

In addition, clients of Moneybox can rely on compensation of up to £85,000 from the Financial Services Compensation Scheme (FSCS).

The only thing missing from the suite of safety features is a banking license; however, I don’t think this should dissuade anyone from using the service.

Account security
There are pins and biometric ID, keeping your account details completely safe while ensuring you can easily access your account.

Education is a little thin on the ground; however, this feels in keeping for a platform where the emphasis is on providing a service for savers and investors who would rather just have the whole thing done for them. There is an academy with 8 sections that provide articles and videos on topics such as ‘Why the stock market rises and falls’, ‘The key types of asset classes’, and ‘The benefits of tracker funds’, to name a few. What’s missing is anything interactive, such as quizzes to test your knowledge.

All education material is also geared towards those who are complete novices. You will find articles helping savers know when it’s time to start investing and updates that include guides to the end of the current tax year.

If you navigate past the usual FAQs, which are divided into topics, there is a Contact Us button at the foot of the app. From here, you can access your messages, which contain all the answers to previous enquiries and an option to send a message. Moneybox says they typically reply within 2 days, and that was in keeping with my experiences, but where is the live chat or telephone number Moneybox? Investors often want answers instantly.

That being said, they do get points for courteous and knowledgeable staff.

Moneybox scores an ‘Excellent’ on Trustpilot with 4.4 from 1.9k reviews.

As you would expect from this type of service, opening and closing your account is a very painless process. Simply download the app from the Apple app store and have your National Insurance Number to hand. You will be asked to verify your email and you can then select the account you wish to open.

It’s a really simple process and shouldn’t take you more than about 10 minutes to complete. However, I am getting increasingly frustrated with the amount of time it takes for funds to appear in your account.

In the interest of giving my account time to demonstrate the functionality of the investment process, I have yet to withdraw my funds from Moneybox. Therefore, I will return to the platform at a later date in order to document that process. In the meantime, I suggest you look at reviews on Trustpilot that mention withdrawals.

Have a question about Moneybox that we haven’t covered? Ask it here and we will get back to you as soon as possible!