Moneybox ISA Review: Fees, Options, and How It Compares

What is an ISA?

An ISA (individual savings account), is a tax-efficient account for saving or investing. There are a number of types of tax-efficient ISA accounts available to adult UK residents. 

The main types of ISA accounts are:

• Cash ISA (£20,000 limit)
• Stocks and shares ISA (£20,000 limit)
• Lifetime ISA (£4,000 limit)
• Innovative Finance ISA (£20,000 limit)
• Junior ISA (£9,000 limit)

Each tax year, you get a £20,000 allowance that can be used for saving and investing with your ISA account. If you like, you can use this whole amount for your stocks and shares ISA, but keep in mind that the allowance can change yearly. 

The main benefit of using a stocks and shares ISA is that for most investments held within the tax wrapper, you don’t have to pay dividend or capital gains (CGT) tax on any income or growth. This allows your portfolio to grow and compound over the years without being held back by a tax burden. 

Another significant benefit is that when you want to withdraw funds from your ISA, unlike with a pension, any money you take out doesn’t count towards your income for that year – meaning you pay no additional tax on your funds down the line.

Lifetime ISA (LISA)

A Lifetime ISA (LISA) works slightly differently. You can only use £4,000 of your allowance towards this type of account. The main benefit is that you’ll get an automatic boost of 25%, so you can automatically earn a £1,000 bonus each year (plus any interest or investment gains). 

However, a LISA can only be used for retirement savings or to buy your first house. Any other reason and the UK government will penalise you by 25%, which would actually leave you worse off than when you began. Any money also has to remain in the account for at least 12 months before you can use it.

Moneybox ISA at a glance

Types of Moneybox ISA accounts

There are four types of ISA accounts available with Moneybox:

1. Stocks and shares ISA account: this is for adults over 18 based in the UK and you can invest up to £20,000 into this type of ISA during the tax year. This is a robo-advisor but you can choose to have some flexibility around the investments and portfolio allocations.
2. Stocks and shares LISA account: allows you to invest up to £4,000 each tax year. You get three starting options to choose from (cautious, balanced and adventurous). The fees are the same as the regular S&S ISA, but with the LISA you also get the 25% government bonus. 
3. Cash LISA account: the cash LISA offers a competitive variable interest rate of 2.75% (at the time of writing) plus a fixed one year bonus interest rate of 0.75%. There are no fees with this account, but you can only save cash, you can’t invest.
4. Junior ISA (JISA) account: allows you to invest on behalf of someone under 18. You can invest up to £9,000 each tax year, which doesn’t count towards your annual allowance. The child can only access the account once they turn 18. The only difference to the costs and fees is that the range of fund costs is between 0.13% and 0.25%.

How it works

The sign-up process is relatively straightforward. If you head to the Moneybox homepage and navigate to the ‘ISA’ page you’re looking for, you can then download the app and get started with just £1. During the registration process, it’s best to have: 

• Your national insurance (NI) number.
• Current address.
• A debit card or bank details.

It doesn’t cost you anything to open up a Moneybox account. Keep in mind there are platform fees if you opt for one of the investment options. 

So, you’re able to open up an investment ISA/LISA or cash LISA account quite easily. Just keep in mind that you can only open and pay into one stocks and shares ISA account and one LISA each tax year.

Moneybox ISA fees

The costs and fees for the Moneybox ISA are very competitive and straightforward. Here’s a table with everything laid out so that you can review the costs and fees yourself:

Pros and cons of the Moneybox ISA

Here’s a quick summary of the main advantages and disadvantages of the Moneybox ISA accounts:

Transfer an ISA to Moneybox

It is possible to transfer your existing ISA over to Moneybox. You’ll first need to set up an account before you can transfer your ISA. So, once you’ve set up a stocks and shares ISA or a Lifetime ISA on the Moneybox app, you just need to follow these steps:

1. Head to your ‘settings’.
2. Select ‘Transfer’ and then ‘Transfer in’.
3. Everything is done digitally, so you can return any forms by in-app chat or email.
4. Transfers should be completed within 3 weeks, but it can take up to 30 calendar days.

Unfortunately, Moneybox can’t accept ISA or LISA transfers from Ulster Bank, One Family, or National Counties.

You can carry out an ‘in-specie’ transfer of investments held elsewhere. These investments would have to match your choices on Moneybox and it can take up to 6 weeks for a transfer to complete. Along with a cash transfer, you can also choose a mixed transfer, moving some funds as cash and some as an in-specie transfer.

Always make sure that you use the official Moneybox ISA transfer service. Don’t withdraw everything from your current provider and move it yourself because you could lose the tax protection you’ve built up over time.

Is your money safe with the Moneybox ISA?

Yes! Moneybox is regulated by the FCA (Financial Conduct Authority), and is covered by the Financial Services Compensation Scheme (FSCS), which protects up to £85,000 of your deposits.

How to pick the right ISA

Finding the right ISA for you depends on what you’re looking for and how regularly you save and invest. Here are some things to look out for and questions to ask yourself when you’re trying to find the best ISA:

1. Does the platform offer commission-free trading in the UK, and how cheap are the platform and share dealing fees?
2. Can you access multiple accounts, such as a LISA or JISA?
3. Is there a discount for frequent investors or savers?
4. What is the investment choice like?
5. How easy is it to use the platform, is there a mobile app?
6. Do you have to pick all the investments, or are there ready-made portfolios?
7. Is there a cheap FX fee if you plan on buying international shares?
8. How reputable is the provider?
9. Does the platform offer good customer service?
10. Are there any incentives like free stocks or cashback for joining?

The truth is, there’s no single ‘best’ ISA provider. It’s all about finding the one that fits your needs. Many platforms structure costs and fees differently, especially if you opt for a managed portfolio. So some will work out cheaper for you depending on what you invest in and how frequently.

As mentioned, you can open and pay into one type of each ISA account each tax year. So, if you try one out for a while and don’t like it or find it expensive for your needs, you can always transfer to another platform down the line.

The bottom line – is the Moneybox ISA a good choice?

The Moneybox ISAs offer you a straightforward way to save and invest in a number of different ISA options using its app-based platform.

To sum it up, Moneybox’s ISA offering stands out because of:

• Low minimum deposit of just £1.
• Good value in terms of costs and fees.
• The option to have a stocks and shares ISA, a cash/investment LISA, or a JISA.
• Offers cheap managed investment portfolios that can be tweaked to your liking.
• A competitive rate of interest and no fees for a cash LISA.
• An easy-to-use app and platform for beginner investors who want to keep things simple.

It’s up there with some of the cheapest robo-advisor ISA platforms available to UK investors. The investment choice isn’t as wide as with some other platforms, but the focus is on simplicity. 

With the investment ISAs, you can stick to the ready-made portfolios, or you can adjust things to include additional ETFs and US stocks. Moneybox also offers the option to carry out an ISA transfer for you. So if you’re looking to change providers or find a cheaper platform, this will make moving much more effortless.

Hopefully, this review of the Moneybox ISA accounts has given you some insight into what it can offer you as a saver or investor. Let us know how you get on in the comments and what you think of this account.

Is Moneybox high risk?

You can choose riskier investments if you want for a potentially higher reward, but you should have that option with most providers. In terms of regulation, Moneybox is regulated and protected in the same way as most other UK ISA platforms and providers.

Which bank is behind Moneybox?

It depends on the ISA account you hold. Sometimes with a cash LISA, funds are split across multiple banks, but no more than 50% of your cash funds will be held with a single bank at any given moment. But Moneybox has relationships with a number of UK banks.

Can you make money on Moneybox?

Definitely. If you opt for a cash LISA, you’ll get a variable rate of interest. If you choose an investment ISA, how much money you make will depend on how successful your investments are.