What is Dozens?
Dozens is a brand-new app aiming to bring internet banking to the untapped Gen-Z market. It offers current account budgeting and encourages saving with incentives and a guaranteed interest rate of 5%.
Dozens helps you stay in control of your money and understand your spending habits. Like other digital banks It is free and brings all the day-to-day banking services you would expect. But, unlike competitors, Dozens offers direct access to financial services so you can invest in Cash or Stocks and Shares ISA’s with ease.
Although Dozens is not an official bank. They are authorised by the Financial Conduct Authority (FCA) as an e-money institution (FRN 900894) and also as an investment firm (FRN 814281). This means your money is safe.
Dozens seem to care a lot about transparency they have publicly answered all questions from their community.
Another defining feature of Dozens is the makeup of the company. In a male-dominated sector, Dozens currently have a 70% female workforce and are making strides into breaking the norm in the financial sector.
Should I get Dozens?
The app is designed to help people on their financial journey from spenders, to savers, to investors – so even if you have a small savings pot, it gives you the flexibility you need to get started.
Treat Dozens just like any other banking venture, it’s best to proceed with caution before you make any sizable investments.
It is still unknown if Dozens will implement its plans of monetisation – Dozens needs users to save and invest before it will become a profitable business. Seeing as this is still considered a start-up, the direction of the app may change depending on users saving and spending habits. If everyone uses the card for spending their holiday money abroad, the current system will not be sustainable for the company.
However, the competitive offer of 5% returns, alongside the fee-free overseas spending is likely to be of particular appeal to frequent travellers.
How does Dozens work?
Dozens has four main sections: spending, saving, tracking and investing.
- To spend you use the current account
- To save you use the savings account
- Track covers your budgeting
- Investing is for stock & share investments on offer
Also, currently you are able to invest in Dozens itself as they are still securing additional funding. They aim to allow them to complete their vision of being an all-in-one banking app.
The 5% interest bonds
A very enticing feature for savers is the idea of earning 5% interest per year on a bond. Rates this high usually mean a risky investment however the money you invest with the Dozens bond doesn’t go anywhere, the bonds are held within a stocks & shares Isa and put into a separate trustee-controlled account. By doing so Dozens can no longer touch your money, your return won’t vary (and will be tax-free) and none of the capital isn’t at risk.
The trust bonds last for 12 months, you are given the ability to sell up at any time, and as the interest is paid monthly, you’ll receive that too. But you’ll have to sell back all bonds from a single issuance – so you either save everything for a year or withdraw it all.
However, it is important to know that NO investment is totally risk-free. Dozens have issued bonds to the NEX stock exchange, as a strategy to raise money. Seeing as it is a new company, there is a definite risk it could fail to remake payments.
Therefore, it is important to remember bonds aren’t a savings product, so it will not be covered under the £85,000 savings guarantee from the Financial Services Compensation Scheme (FSCS).
If the worst were to happen, you would be covered by the FSCS investment protection, which offers up to £50,000 if your investment company fails. However, it must be remembered that the underlying stocks and shares that back the ISA are volatile and may result in losses.
Is your money safe?
Your funds will be protected by the FSCS. However, if you trust your money with Dozens as an investment firm or the Bank of Scotland as a bank, they will be protected differently.
Dozens current account and cash savings are protected up to £85,000 from FSCS through Bank of Scotland. But it’s important to bear in mind that FSCS covers £85,000 per person, per institution. Bank of Scotland is owned by Lloyds Banking Group, so if you have money saved within a different Bank of Scotland account, or with Lloyds Bank or Halifax, only £85,000 across all accounts will be covered.
The savings bond, on the other hand, is covered by the £50,000 FSCS protection for investment firms. This is only applicable if the adviser or firm who gave the advice is unable to meet the claim or if the company goes bust. Importantly, you are not covered for losses due to the investment itself not performing as expected.
As of the 1st of April 2019, the FSCS increase to cover to £85,000 to cover investment firms.
Will Dozens be the next big thing in the world of finance?
*** UPDATE – 10/4/2019***
Dozens have recently given an update on the progress and continued growth of the firm.
“In that time, we have reached over £1 million in balances in customer accounts, over 11,500 unique downloads and over 5,000 customers.
In addition, the platform has processed over £3.6 million in transactions already, and average balances in Spend, Grow and Invest are now £350, £725 and £1,685 respectively.
We had initially targeted funding of £3.5 million at £20 per share, based on a pre-money valuation of £20 million. The campaign is now in overfunding and will close for investment no earlier than 15 April and no later than 30 April.”
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