Automating savings with AI and more is an easy way to see your savings grow
Often one of the biggest barriers to putting money into savings is simply remembering to do it. So your salary comes into your current account and stays there. Some of it goes to bills, some of it to shopping and going out. And before you know it, there’s not much (or any) left to put into savings. So nothing gets saved. And this repeats month after month.
But it is possible to break that chain so some of your money goes into savings before you can spend it – and you don’t even need to do anything each month. After the initial set up, these three methods will automatically move money out of your main account into a separate account.
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Set up standing orders
This is the simplest way to ensure you save every single month. Doing this means the money is automatically saved month after month.
You need to do three things. First, set up a separate account which is just for your savings (try for one with some kind of interest, though that’s hard right now). This doesn’t have to be a standard savings account with your current bank. It can even be a separate savings account at a different bank where it’s possible to get 7% with regular savers from First Direct and Co-op Bank.
Then work out how much you can afford to save each month. This isn’t difficult. Just add up all your regular bills and essential outgoings such as food and petrol for a month and deduct this from how much you earn in a month. What you’ve got left is what you have to spend for the rest of the month until your next payday.
Finally, set up a standing order for that amount to come out of your current account and into your separate account on the same date every month. This is often referred to the “pay yourself first” savings method.
Personally I’d set this to be as close to payday as possible so you can’t spend the cash before you save it. If your payday tends to move when it happens on a weekend, then allow a couple of days before the standing order takes the cash. You can always change the size of the direct debit if you feel it’s too much or too little.
Use an AI app
If you’re not confident you have enough money spare each month to save at payday then there are some apps that will help save smaller amounts as the month goes on.
Once you’ve downloaded the app you need to connect it to your bank account. Doing this gives each app access to see your bank balance and monitor regular payments in and out. The apps then use smart algorithms to analyse your spending.
Now it’s the clever bit. The apps can work out how much they think you can afford to save, and transfer that money automatically to a separate account. Slowly but surely the total saved adds up. You can, of course, use one of these as well as set up standing orders in order to save that little bit more each month.
With each of these apps you have the ability to increase or decrease how much and how often you save, and well as reject a saving if you think you need to keep hold of the money. And if you change your mind it’s easy to withdraw the money back to your current account, though it might not be until the next working day, depending on the app.
I know some people worry about the safety of this but your banking data is all encrypted to keep it safe. Your money is also protected if the companies running the apps were to go bust, though not necessarily if the bank holding the cash goes under. I’m happy with the ones listed below but if you’re not comfortable with doing this then do a bit more reading to put your mind at ease.
Here are the main artificial intelligence savings apps that will automatically move money for you:
Plum
The free version is all you need for the automatic savings, though if you choose to pay more you’ll also have access to Plum Plus which comes with more investment options. The interest rate paid on its easy-access pockets is 3.52% for the free version.
If you put your money into these pockets, it’s held with Investec and protected up to £85,000 by FSCS.
Sprive
Sprive is an app doing the same thing, though it has one major difference – the money saved goes towards overpaying your mortgage rather than a savings account. If your mortgage rate is higher than what you can get in savings, and if you already have a substantial emergency savings fund, this could be a better option for you.
Just bear in mind once it’s in the mortgage it’s much harder to access that cash if you need it later (you’d need to remortgage and release capital). It’s also early days so not all mortgage providers can be connected.
When you first sign up you can get £5 by using the code 5NN3KXFL, or it’s worth checking the rate offered by TopCashback.
Chip
The AI feature on Chip stopped being free to all users in mid-2022. It now charges 45p per save so I wouldn’t use this app for auto-savings.
Trigger auto-savings & savings challenges
The final form of automated savings is something I’m calling ‘triggered’ savings. Effectively, when a certain event happens your bank will move money from your main account into a separate savings pot.
Monzo and IFTT
The main bank for this is Monzo, which has a 1p savings challenge available. Sadly this year’s challenge ended on 31 January for free customers, though if you pay for a packaged Monzo account it’s available all year.
You can also connect to an app called IFTT (If This Then That). You can set up other simple savings challenges very easily, either choose from a catalogue of pre-made options or create your own.
For instance, you could use your maps app as a trigger when you visit a certain shop, or your weather app to trigger a save every time it rains. You’re limited to two free ‘applets’ with the IFTT basic plan.
Plum
The paid version of Plum also offers some of the standard ones, eg the 1p savings challenge, but I don’t think it’s worth paying extra for this.
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Round up your spending automatically
The most common way to get money in your savings account without any effort is to use a “rounding up” system. When you spend money on your debit card, the bank will round up the transaction to the nearest pound, moving this spare change across to a savings account. For example, spend £3.75 and 25p will be moved over.
I rarely use this option myself as I tend to spend with my cashback cards instead, but I like the idea of small amounts adding up each time you shop. If you use your debit card a lot it could quickly build up a few quid every day or two.
More and more banks (listed below) offer this and you’ll need to opt-in for the rounding-up to happen. All work a little differently so make sure you understand how what you’re signing up to. And if your bank doesn’t offer this there are third-party apps you can try.
The pick of the bunch is probably Chase as you’ll also earn 5% interest on the top ups for a year on top of the 1% cashback for spending. However, earlier this month Chase announced big changes to its cashback which could limit how much you can earn from April.
What banks offer round ups?
- Bank of Scotland
- Chase
- Halifax
- Lloyds
- Monzo
- Nationwide
- Natwest
- Revolut
- RBS
- Starling
- Trading 212
- TSB
The following also allow you to round up from spending at other banks
- MoneyBox
- Plum
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The best auto saving apps
Andy’s Analysis
So there are a lot of options for auto saving, here are the ones I’d recommend:
PLUM
Focus on Plum in the first instance. It’ll be the most impactful. But move your money across to a better paying account at least every month, if not weekly.
CHASE
I’d also suggest you try Chase. Mainly because of the 1% cashback, but the 5% on round ups doesn’t hurt either!
MONZO
Finally, if you already use Monzo, then the IFTT feature has huge potential to add more to your savings. And it could be fun!
