Looking for a good way to kickstart your savings for a deposit while earning interest?
Look no further, we’ve got a smart money app for you which pays a competitive rate of interest, and you’ll get a bonus too.
Forget the jargon, the Plum app is all about straight talking and making your personal finances work better for you.
Over two million people have already signed up and are benefitting from the app’s slick features, including automatic savers and an AI chatbot full of tips to help you achieve your savings goals.
Whatever the reason for saving, be it a holiday, a new car, a first home or just a rainy-day fund, Plum helps you build better saving habits automatically.
It’s a no-brainer, really. The AutoSaver* function within the app automatically links to your bank account (with your consent), and then regularly moves money into savings pots for you.
You choose where the money goes, it could be invested in one of Plum’s professionally managed funds (capital at risk), into an ‘Interest Pocket’ where it’ll start earning interest, a Cash ISA or an ‘Easy Access Pocket’ which you can dip into when you need to⁑.
It’s these features that attracted Olga Demi, 37, to open a Lifetime ISA (LISA) account with Plum, and now she’s saved over £15,000 in it.
After experimenting with other providers, Olga, along with her partner, consolidated her money into the Plum account, where the interest rate edge and simplicity won out.
‘At first I doubted if we could ever afford a mortgage, and I had always found savings a struggle, but we have proved ourselves wrong,’ she says.
The bank worker from Essex opened a Plum LISA with an interest rate of 4.75%⁂. As it’s a LISA, the annual limit for savings is £4,000, but there is also a 25% government bonus paid on top, increasing these savings to £5,000 per tax year.
Olga says she found the simplicity of the Plum app and its attractive interest rate were winning features for her and her partner.
Along with its highly competitive LISA, Plum also offers a range of other tools to make starting (and maintaining) a savings habit a little bit easier.
These include the Splitter tool, which automatically moves money from your bank account into the savings pockets you’ve set up. It also has nine automatic savings rules to help you be more consistent with your savings.
Plum uses smart technology to analyse your spending to see how much money you could afford to set aside each month and the best possible place for this money to go – and grow – and it will even suggest helpful ways to make the most of any leftover money you may have.
The couple were able to maximise their returns in the Plum LISA and now have £15,600 saved towards their first home.
Olga, who comes from a traditional working-class Estonian family, says her partner, who is in his 40s, missed the window of opening a LISA by months.
There are strict rules around who can open a LISA, and it’s only for those aged 18 to 39. Once it’s open (you must make the first deposit by your 40th birthday), you can continue putting away up to £4,000 a year until you turn 50.
Make sure a Lifetime ISA is right for you. Withdrawing for anything other than your first home, retirement, or a few specific circumstances may result in a 25% government penalty, meaning you could get back less than you put in.
But as Olga’s partner had already turned 40, he couldn’t open his own account.
‘Together, we estimate we forfeited around £7,000 in government bonuses, a real regret, but it also fuelled us to move forward.
‘Our goal now is to buy a home priced at approximately £360,000 by autumn this year, and we aim to have a deposit of 15 – 20% saved by then.’
As the couple are using a LISA to save, the first home they buy must be £450,000 or less, according to the government rules. The money is also only permitted to be used for a first home, for a retirement for someone aged 60 or over, or it can be taken out if the account holder is terminally ill.
Olga, who has an annual salary of £40,000, says ‘it’s been remarkable how easy it’s been’ starting their savings journey, despite the bonus money they missed out on.
Olga explains that ‘the breakthrough came when we mapped out our expenditures, paused discretionary spending, and set up automated savings so the money was out of sight and out of impulse.’
She adds: ‘My partner, who was once dismissive of money-saving tactics, now gleefully hunts for the ‘yellow sticker’ deals and meal deal bargains while quitting smoking has contributed to over £3,000 a year in savings, helping us financially but also with our health, and it lowered the cost of our insurance too.’
For Olga and her partner, their savings journey is not just about the numbers either.
‘It has taught us discipline, teamwork, and optimism, and as the saying goes, ‘good habits and better choices attract a better quality of life,’ she explains.
‘The pride we find in our growing savings motivates us every day, and by next year, we expect to be proud homeowners. Keep an eye on us, we believe in what we’re building, both literally and figuratively.’
Download Plum NOW (available on App Store and Google Play).
All you need to know on Plum
Is Plum free?
You can download Plum from the App Store or Google Play for free. There are also paid-for subscription options available within the app, which include extra features which could boost your savings and bring you closer to meeting your financial goals.
What else can I use it for apart from a house deposit?
Plum is all about helping you save and invest, but that’s not all it does; it can also help you keep track of regular payments and expenses.
In the app, you can filter your transactions by account, find specific retailers with a few taps and even set weekly allowances to control your spending.
Is it safe?
Plum uses encryption and face and fingerprint ID for added security, and this is just one reason over 2 million people trust it.
Money held in a Plum Interest Pocket, 95-day Notice Account or Cash ISA is covered by the Financial Services Compensation Scheme (FSCS) up to a total of £85,000 per customer. There are also safeguards for a non-interest-earning pocket, such as a Primary Pocket, which is protected by the E-Money Safeguarding Rules.
If you ever need help, friendly customer support teams are available 7 days a week.
* Some Auto Savers are only available with a paid subscription.
⁑ Easy Access Interest Pockets and 95-Day Notice Accounts are provided by Investec Bank Plc. The rate Plum offers may change in the future.
⁂The total 4.25% AER (variable) assumes you meet all eligibility conditions for the full 12 months.
RISK: T&Cs & fees apply. You will need to review periodically whether automation is suitable for your circumstances.
Capital at risk if you invest. You shouldn’t invest in or deal in any financial product unless you fully understand it and the inherent risks. If you invest, you should be satisfied that your choices are suitable in light of your financial position, circumstances and needs.
Plum does not provide investment or any other form of financial advice, and individual investors should make their own decisions or seek independent advice. The value of investments can go down as well as up, and you may get back less than your original investment. Past performance of an investment is not a guide to future performance.
Your account and related payment services are provided by Modulr FS Limited. Plum Fintech Limited is a distributor of Modulr FS Limited, a company registered in England and Wales with company number 09897919, which is authorised and regulated by the Financial Conduct Authority as an Electronic Money Institution (Firm Reference Number: 900573) for the issuance of electronic money and payment services. Whilst Electronic Money products are not covered by the Financial Services Compensation Scheme (FSCS) your funds will be held in one or more segregated accounts and safeguarded in line with the Electronic Money Regulations 2011 – for more information, please see this.
Plum is also registered with the Financial Conduct Authority as an e-money agent of PayrNet Limited, which is an e-money institution also authorised by the Financial Conduct Authority (Firm Reference Number: 900594). The Plum Visa Debit is issued by PayrNet Ltd pursuant to a licence from Visa. PayrNet Ltd is authorised by the Financial Conduct Authority to conduct electronic money service activities under the Electronic Money Regulations 2011.
Plum Fintech Limited is a registered account information service provider with the Financial Conduct Authority (Firm Reference Number: 836158). Plum is a trading name of Plum Fintech Limited.
Saveable Limited is authorised and regulated by the Financial Conduct Authority (Firm Reference Number: 739214) to carry out investment and credit broking services. Plum and Plum Money is the trading name of Saveable Limited.
Plum is registered with the Information Commissioner’s Office, with registration number: ZA217685.
Plum offers various products, some of which are covered by the Financial Services Compensation Scheme (FSCS) whilst others are not. The FSCS does not cover electronic money products. No other compensation scheme exists to cover losses from your electronic money account. Your funds will be held in one or more segregated bank accounts with a regulated third-party credit institution, in accordance with the provisions of the Electronic Money Regulations 2011. For more details on how your money is protected, please see here.