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Plum app review

Regular money saving is difficult.

  • 1 in 10 Brits (9%) have no savings at all.
  • A third of Brits have less than £600 in savings.
  • The average Brit has £6,757 rainy day  savings

(Source: Global Banking and Finance, Gov.uk, Money Advice Service, ONS)

There are multiple ways to start saving and investing but what is the best way and how can you start? Plum app makes it easier. Check my Plum review to see how to save money with ist and if it’s for you.

What is Plum?

Plum is a savings and investment ‘bot’ installed on your phone. Plum is an algorithm that monitors money spending, putting aside the amount you could put aside to save each month. It automates the money-saving process without having to change your spending habits.

Plum inventors wanted to make saving money effortless and really easy. Get the Plum app to test and review it yourself.

How to save money with Plum AI - money saving assistant
How to save money with Plum AI

How does Plum work?

Once you download the Plum app and create a Plum account it connects to your bank account to analyse your spending transactions to figure out the best amount of money to set aside weekly. You can specify how much you want Plum to save, you can also pause saving at any time. The ‘saved’ money goes to Plum Pocket and can be withdrawn on request which takes 30 minutes to reach your bank account. To sign up for the Plum account you need to be a UK resident and have a UK current bank account.

Plum account allows you also to invest your savings for a small monthly fee. You can start investing with just £1. Through the Plum app, you can choose how much to invest, what to invest in (Plum Stocks and Shares ISA or a General Investment Account) and how to do it, e.g. automatically allocate a set percentage of your auto-deposits for those funds. You can withdraw your investments as often as you wish, although it can take up to 5 days for the money to return to a Plum account.

Where are Plum savings kept?

They go to so-called Plum Pockets. There a few Plum pockets, so you choose between a primary pocket or one that pays interest.

  • Primary Plum Pocket – with no interest rates and no FSCS protection
  • Easy access Plum pockets – 3 types offering between 0.35-0.55% interest rates and FSCS protection (Financial Services Compensation Scheme), notice period on all of them is 1 day and two of them arent free.
Plum Pockets
Plum PocketInterest OfferedInstant Access/NoticeFSCS protectionCost
Primary0%Yes/N.ANo£0
Easy access Plum Basic0.35%No- 1 dayYes£0
Easy access Plum Plus0.55%No- 1dayYes£1/mth
Easy access Plum Pro0.55%No- 1 dayYes£2.99/mth
Plum Pockets

Plums fees and limits

There are three types of Plum accounts:

Plum Basic

Is free, including the app download and registration, as well as unlimited deposits and withdrawals, plus the automatic deposit and bill analysis. Roundups to the nearest £1. You can choose Plum primary pocket with no interest rate & no FCSC protection or Plum easy access pocket with 0.35% interest rates +1 day withdrawal notice + FCSC protection.

Plum Plus

It costs £1 a month taken by direct debit from your bank account directly- it has the interest rates of 0.55% on savings plus offers investment features. The fund’s management fees don’t show on the statement as they fluctuate daily – see below for a fee illustration.

Plum Pro

Plum Pro costs £2.99 per month after a 30-day free trial. It automatically covers Plum Plus investment access. It has an interest rate of 0.55% on savings plus offers additional functionalities, such as cashback at certain retailers- up to 11%, a monthly spending ‘diagnostics’ report, and the ‘rainy day saver’ (save money every time it rains), 52-weeks challenge to save an extra £1 on the top of your regular savings to set aside £1,378 per year.

Plum Plus and Plum Pro investing fees:

  • Investment fee. This is £1 per month following your first month (it’s Plum Plus monthly fee, the minimum Plum’s plan with investment features). You pay it regardless if you use a Plum account to save money or do any investments.
  • Fund management and provider fee. The fund management fee is between 0.08% – 0.90% a year, depending on the fund you choose. There is also an additional 0.15% annual provider fee on top of that. Both fees equal an annual fee of 0.53%. So if you invest £10,000, Plum will cost you an average of £170.30 a year.

How much does Plum cost?

For Plum cost summary check the table to see what Plum features are available depending on a membership level be it Plum Basic or Plum Plus or Plum Pro:

Plum BasicPlum PlusPlum Pro
Primary Pocket&
Easy Access Pocket –
0.35% interest
YesYesYes
Easy access Plus or Pro pocket –
0.55% interest
NoYesYes
InvestingNoYesYes
Automatic depositsYesYesYes
RoundupsYesYesYes
GoalsNoNoYes
Multiple pocketsNoNoYes
52 Weeks ChallengeNoNoYes
Rainy DaysNoNoYes
CashbackNoNoYes
Pay Days Money SavingsNoNoYes
Diagnostic ReportsNoNoYes
True BalanceNoNoYes

What can you invest in with Plum?

There are 10 funds you can choose from to invest in, the risk varies of course depending on your choice. The funds are provided by established 3rd party investment companies and seem to yield nice 5 year ROI figures. Check Plum Investment funds performance on their site. You can choose your preferred investment type based on your attitude to risk:

High risk level:

  • Tech Giants
  • Medics

Medium risk level:

  • Clan& Green
  • Raising Stars
  • American Dream
  • Best of British
  • European Essential
  • Balanced Bundle
  • Growth Stack

Low risk level: Slow & Steady

Remember: You can only contribute the current tax-year allowance into one stock and shares ISA with one provider and so make sure you check before you commit to a PlumISA. As much as I like Plum I am myself opting for Halifax ISA.

Is Plum safe to use?

Plum is safe to use for money saving and investing but the devil lies in the detail, follow me…

It’s worth remembering that your capital is at risk when you start investing regardless of your investing method choice. This is a universal investment true though.

Plum savings safety

If you decide to keep your money in an instant access primary pocket as so-called e-money Plum uses an e-money provider that is protected by E-Money Safeguarding Rules. However Plum states the money kept in the primary pocket is not protected by the Financial Services Compensation Scheme (FSCS). So to ensure your savings are safe I suggest you get Plum Plus or Pro as these paid types offer full FSCS protection of your savings and investments.

Plum investment safety

Plums is FCA (Financial Conduct Authority) regulated & it’s an appointed representative of Resolution Compliance Limited. All Plum’s funds are FSCS protected and the ‘most risky’ Plum’s tech and growth funds keep your money in an investment account with Gaudi Regulated Services LTD, which is FCA regulated.

Is Plum a good idea?

Yes if you struggle with regular money-saving and may rely on automatic saving using Artificial Intelligence. It’s helpful when need to really focus on putting money aside some big spend planned for the future e.g wedding reception, honeymoon, a big birthday, etc.

Is Plum Plus or Plum Pro better than Plum Basic?

The paid versions of Plum – Plum Plus or Plum Pro – offer you more functionalities than Plum Basic but it doesn’t mean they are ‘better’.

You can get away with testing Plum when getting the Basic Plum version which is totally free and as long as you start putting your money into the Easy Access Plum Basic pocket you will get 0.35% of interest rates on them as well as the FCSC protection.

If however, you want to do more than set money aside and are planning on investing in stocks and shares ISA then the paid Plum versions will be necessary.

But then there may be still more attractive options than Plum Plus or Plum Pro – as always it depends on many factors. For me, I go for tried and tested stock and shares ISA from Halifax as its ROI has been great over the last few years (currently my husband reports 15% ROI as of December 2020. It’s possible to get that much and more with Plum Plus or Plum Pro it’s just a matter of installing and managing one more app, whereas I already use Halifax, not to mention the fees there are more modest than those from Plum investments… Again if you have a hefty ROI Plums fees may be worth it…it all depends on the return on investment on your money after all.

Which is better Chip or Plum?

In the times where savings account seems to gradually worse offering lower interest rates seems like the money-saving apps may be more popular. Chip offers a 1.25% return if you refer 1 friend… No FCSC protection unless you have an interest account…Plus it may take up to 48 hours for the withdrawn money to reach your bank account.

So even the interest rate is bigger at Chip I prefer Plum as there are fewer limits and Chip only allows to connect to one account, I have 6 so if I was to go for a money management app I would choose easy access Plum to save money.

How does Plum earn?

As a startup Plum was funded by various crowdfunding campaigns in the past. Following its 5th year on the market, it’s established now so it creates its own revenue through:

  • investment options fees (that includes its monthly subscription fees for Plum Plus and Plum Pro).
  • facilitating any switches for its customers

Alternatives to Plum

Chip

The most similar to Plum is Chip. It relies on open banking to analyse your spending habits and to save you money automatically in your Chip account. It helps you save towards your goals.

Chip is FCA regulated but your savings are stored in a fenced Barclays account, which doesn’t offer FSCS protection.

Tandem

Tandem is another money-saving app helping you automate your savings. It does have a bank license yet it doesn’t operate as a typical bank.  Tandem does not offer its own current account. It works as a pocket accountant, pairing itself with your existing bank accounts to look at all your income and spend. It then shows you how you could spend less, and save more.

Moneybox

Yet another savings app that allows you to save and invest the money you put away. Moneybox is rounding uo your spare change, so that you can invest the saved money into a variety of savings products such as a Stocks and Shares ISA, Stocks and Shares Lifetime ISA, Pension, Junior ISA, General Investment Account, Socially Responsible Account, Cash Lifetime ISA, 45-day notice account and 95-day notice account. The difference between it and Plum looks at % rates as Miney box seems to have slightly lower rates but the notice period is much longer than the notice period offered by Plum.

App-only banks

There are 2 app-based banks that help you save when rounding up your spend change: Monzo and Starling Bank . You need to opt in to use this money-saving functionality.

Plum review

Plum’s Trustpilot rating is 4.4 based on ‎1,108 reviews. The majority of the reviews are positive. I am actually impressed it myself as soon as I connected it to my main bank account not only it automatically put some money aside showing me what I can afford to save today (and it may be a bit better interest rate than many savings account can offer) but it spotted that we overpaid on pour utility bill…The spookiest is I don’t even pay for the bill myself as my husband does but since plum is AI it detected that anomaly by my postal address – great accuracy and spot indeed, I am impressed! As my utility deal ends soon I will definitely explore Plum’s switch to cheaper bills. I also like the overdraft savings option (remember to turn it on as it is not on by default).

Plum overpayment notifications
Plum overpayment notifications

Therefore I think that in a world where we have multiple outgoings or bank accounts and are increasingly busy some clever artificial intelligence largely protected by the Financial Services Compensation Scheme can actually help manage our savings effectively.

Final Thoughts on Plum

Pros of Plum

  • Easy to use
  • Free ( Plum Basic)
  • Short notice periods
  • Automated effortless saving
  • Investing from as little as £1
  • Notifications to save more or less money
  • FCA regulated
  • Most of it is protected by the Financial Services Compensation Scheme (FSCS)
  • Can be used if overdraft to minimize the overdraft

Cons of Plum

  • Expensive investing fees if investing small amounts
  • Money in a primary pocket isn’t protected by the Financial Services Compensation Scheme (FSCS
  • Some Plum account features common in other apps for free are paid
  • Access to money isn’t instant, it may take up to 24 hours
  • Plum team is only contactable during office hours (09:00–17:00 from Monday to Friday and 10:00–16:00 on Saturday and Sunday).

Overall, Plum may be really helpful for those who have trouble saving and I like to control and change how much you want to save each month by selecting your mood. Plum is regulated by the FCA and any money kept in saving pockets – except for primary pocket- or any investments is covered by the FSCS.

Plum may be one of the best money apps you should get in 2021 to manage your finance.

About admin

I am not Martin Lewis but Martyna aka Money Saving Girl. When I first came to the UK I was on a super tight budget, so I know how hard it is not to have money or how to get creative to get 'more for less'. I share with you my money saving tips about anything which worked for me. Be it free samples, shopping tricks, iTunes, various discount apps, websites and reward programs. Occasionally I write about traveling or insurance.

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