Monzo partners with Freetrade to offer free shares for subscribers

Fintechs have a long history of teaming up with each other, but this latest partnership has come a bit out of left-field.

Digital bank Monzo has joined forces with investment platform Freetrade to offer its paying subscribers free shares.

In a blog post, Matt Mair, business analyst at Monzo, wrote: “In a nutshell, the Freetrade app lets you invest in stocks and exchange-traded funds (ETFs) with no commission or hidden fees. Where they do charge, they do so in a transparent way.”

“Whether you’re an experienced investor or you’re a total beginner, they make it easy to manage your portfolio right there in the app.”

Monzo’s Plus and Premium customers will get three free shares—worth between £3 and £200 each—when they sign up to a new Freetrade account and deposit at least £2.

The offer is slightly better than Freetrade’s standard referral programme, which only gives the user that refers a friend and the friend referred a free share each, not three free shares all for themselves.

But, Freetrade’s standard referral scheme requires the same minimum deposit (£2) and doesn’t have the added cost of Monzo’s subscriptions on top.

“We are delighted to announce our partnership with Monzo, one of the UK’s largest digital banks,” Viktor Nebehaj, CMO and co-founder of Freetrade, added.

“We have grown rapidly since our app launched in 2018 and as a business that is on a mission to get everyone investing, our partnership with Monzo is another step in that direction.”

Monzo Plus is £5 per month and allows users to connect their other bank accounts, while Monzo Premium, which boasts other features such as travel insurance, a metal card and higher interest rates costs a whopping £15 per month.

Freetrade’s partnership with Monzo could be a new avenue for the digital bank to make money through commission fees, and hints at Monzo’s growing interest in the share trading space.

Last week Monzo also withdrew its US banking licence application after regulators told the digital bank that its application was unlikely to be approved.

Without the costs of its US banking licence, Monzo will refocus its attention to investing more in its UK operations, with this partnership likely being the first of many new launches for its customers.

In its 2021 annual report, Monzo also revealed that it is being investigated by the FCA for a potential breach of anti-money laundering regulations.

On 7 May 2021, the FCA informed Monzo that it has “started an investigation into our compliance with financial crime regulation,” after initially telling the bank to appoint someone internally to oversee the initial review into its financial crime practices in August 2020.

Over the last year, Freetrade has gone from strength to strength.

The trading and investment platform now counts 950,000 users on its platform and recently poached an executive from Revolut for its new CFO.