Thanks to the rise of challenger banks, an increasing number of banking apps now offer ‘savings pots’ to help you to get into the savings habit. These pots can be ideal for saving for particular goals and help you set aside money to pay bills and other expenses.
How do savings pots work?
Savings pots typically sit alongside a current account (sometimes a savings account) with that particular provider.
In many cases you can open more than one savings pot and can give your savings pots separate names so you can distinguish between them. You can then set aside money for different goals. For example, you might have one savings pot for holiday savings, another for building a house deposit, and another for emergency funds.
This helps you to have a clearer idea of what you’re saving for and how soon you’ll reach your goal.
Many of these banking apps also offer spending insights to make it easier for you to work out how much you can set aside each month.
Open an account with Monzo and you'll be able to open multiple savings pots that are kept separate from your main account balance. You can choose a different name and image for each of your savings pots and you'll also earn interest on the money you're saving. You can even lock a savings pot to stop you from dipping into it for a set period of time.
Monzo uses data to work out your monthly essential spending, which makes it easier for you to know how much you can afford to set aside - you can set up automatic transfers to make your life even easier. Plus, thanks to the Monzo Roundups feature, whenever you spend more than £1, this is rounded up to the nearest pound and the difference transferred to your savings pot. Your savings are protected up to £85,000 under the Financial Services Compensation Scheme (FSCS).
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39% EAR variable.
Pros
Easy to set up
Good for budgeting and categorising spending
Automatic saving feature
Fee-free spending abroad
Slick app with face login
Overdrafts and loans available
Cons
Free ATM withdrawals outside the EEA limited to £200,
£1 fee for depositing cash at PayPoints,
Maximum cash deposit of £1,000 every 6 months
No rewards program
Minimum opening balance
£0
Switch service guarantee
Yes
Account fees
£0
Overseas card transactions
0%
Overseas cash withdrawals
0% conversion fee plus cash fee of 0% on up to £400 per 30 days (3% thereafter)
If you bank with Starling, you can choose to open separate savings pots, called Spaces. These Spaces sit alongside your bank account, so you can easily transfer cash into it as and when you're able to. You can name your different Spaces and select a suitable image for each of your savings goals.
Starling also offers a Round Ups feature which rounds up your spending to the nearest £1 and transfers the difference to your chosen Space. At the moment, you can earn interest on your Starling Spaces and current account balance up to £5,000. However, this will change from 10 February 2025, when the interest rate will be removed. Money held with Starling is protected up to £85,000 under the FSCS.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 15% EAR variable.
Pros
Split any bill with a tap
24/7 customer support
Bill manager & instant alerts
Pays interest on current account balance
Cons
No branch network
Limited options for depositors
No competitive switch incentives if you switch your account
Limited product range compared to other banks
Lower ATM withdrawal limit than some other digital challengers
Get a £20 welcome bonus when you spend your first £20 (T&Cs apply).
Revolut's savings pots are called 'Pockets'. They are linked to your main Revolut account and you can select a name and image for each Pocket to match your savings goal. You'll be able to set up one-time or recurring transfers into your Pockets from your main account - these can even be in different currencies. What's more, you have the option of setting up Group Pockets that can help you to save with friends and family for a common goal, such as a holiday.
Like many of its competitors, Revolut also offers a round-ups feature that lets you transfer the spare change from your spending into your chosen Pocket. Plus, you can easily track and monitor your spending in the app so you know how much to save each month.
Pros
Low overseas fees
Quick sign-up
Earn cashback on spending
Set budgets for financial goals
Virtual cards for online purchases
Easy to transfer money internationally
Linked 'Junior' account available for one child
Cons
1% currency conversion charge on weekend spending abroad
Free cash withdrawals in the UK and abroad both limited to £200 per month
Cannot deposit cash or cheques into the account
Charged a fee to receive your bank card
Minimum opening balance
£0
Account fees
£0
Overseas card transactions
0% Mon-Fri (max. £1,000 per month)
Overseas cash withdrawals
0% Mon-Fri (max. £1,000 per month) conversion fee plus cash fee of £0 up to £200 per month
Receive 1% cashback on everyday purchases capped at £15.
Chase doesn't offer separate savings pots as such, but you can open up to 20 separate current accounts at a time and use these for different purposes - whether you want to use one for direct debits for bill payments, another for holiday cash, and a third for everyday spending. The downside is you won't earn interest on these accounts.
However, you will earn 1% cashback on all your spending for the first year and be able to save in an easy access account that pays interest. Chase also offers a round-up feature where your spending is rounded to the nearest £1 and the change is transferred to a round-up account paying 5% interest. Your money is protected up to £85,000 by the FSCS.
Free 24/7 Emergency Cash Service to withdraw up to £250 for online and telephone banking customers or £60 if not.
If you have an easy access savings account with NatWest, you can set up a savings pot with the Savings Goal Tool in the NatWest app. This allows you to enter how much money you need to save and by when, and the tool tells you how much to save each month to reach that goal. You can easily track how close you are to reaching your goal in the app.
If you also hold a current account with NatWest, you can take advantage of the Round Ups tool which rounds up your debit card spending to the nearest pound and transfers the change into your savings account. Your money is protected up to £85,000 by the FSCS.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39.49% EAR variable.
Pros
No monthly fee
Emergency cash option
Easy to open and manage
Arranged overdraft available
Access to mobile banking app to help you manage your finances
Free 24/7 Emergency Cash Service to withdraw up to £250 for online and telephone banking customers or £60 if not.
Like NatWest, to use the RBS Savings Goal Tool, you'll need to have an instant access savings account with the bank. Decide what you're saving for and how much you want to save by when, then enter the details into the tool and it will tell you how much you need to save each month. You can only set up one savings goal.
If you also have a current account with RBS, you can use the Round Up tool to save faster. Every time you spend on your debit card, the transaction will be rounded up to the nearest pound and the difference transferred to your savings account. You can easily track your spending and how close you are to reaching your goal in the app. Your money is protected up to £85,000 by the FSCS.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 39.49% EAR variable.
Savings pots can be a great way to help you save for specific goals, such as a holiday or new car, but you can also use them to set aside money for essential bills and other expenses. Separating your money in this way can make it much easier to stay on top of your finances and take some of the stress away when it comes to managing big events such as Christmas or birthdays.
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Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
Cardless cash provides a convenient way to use an ATM without their card. If you often go out without your wallet or want to make it easier for family members to take out money, this is a feature that deserves a second look.
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