Monzo has launched a significant initiative to capture the next generation of savers as financial institutions compete fiercely for the Gen Alpha demographic.
The London-headquartered fintech has introduced a three per cent interest rate on its savings account for Under 16s, as reported by .
This move propels Monzo ahead of competitors' offerings for children's accounts. TSB provides a 2.5 per cent rate whilst NatWest and Nationwide deliver 2.05 per cent and two per cent respectively.
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Monzo now matches Santander's 'mini' account offering.
The digital lender explained its emphasis on this age bracket – those born from 2010 onwards – follows research showing they represent a generation of "piggy bankers."
Under 16s are forgoing £162m monthly by not earning interest on their savings, Monzo discovered. The company revealed that over 80 per cent of eight to 15 year olds were putting money aside at least once monthly.
Banking disruptors target Gen Alpha
Starling and Revolut – Monzo's fintech competitors – initiated their campaigns for the youngest demographics with junior account launches in 2020. Revolut's children and teenagers account features a 2.5 per cent interest rate whilst Starling's 'Kite' provides no interest.
The battle for the youngest generation presents a fresh challenge for Britain's banking challengers who have successfully attracted current account switchers from established lenders.
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Monzo secured second position, trailing Nationwide, for the highest net gains in account switchers during the first three months of 2025 with 8850. While Lloyds, Natwest, and Barclays all experienced a loss of customers, Barclays suffered the most with a net loss of 22,334.
This period also coincided with a significant outage at Barclays that left some customers without access to their online banking for up to 48 hours.
Nationwide, which provided customers with £2.8bn in the past year through various reward schemes, saw nearly 73,000 switchers compared to 17,000 outflows, as per data from Pay.uk..
As the competition to attract switchers continues, both traditional lenders and contemporary banks are gearing up for a new challenge to win over the youngest generation.