It’s very possible that when it comes to reaching your savings goals, nothing is more important than automation. Most people, no matter how hard they try, cannot save consistently if doing so requires a manual process. Mylo is a revolutionary app, the first of its kind in Canada, that not only automates your savings, it does so in such a way that you’ll hardly even notice.
Similar to Acorns in the U.S., Mylo links to your primary debit and/or credit card, and rounds up all of your purchases to the nearest dollar. It then withdraws the ‘spare change’, and invests it inside a low-cost ETF portfolio that you set up when you open the account.
What makes Mylo especially unique, is that it’s designed with your specific savings goals in mind. As I’ll explain in more detail later, Mylo wants to know what you’re saving for, and they’ll help you create a plan to make it happen. I found the concept so unique, that I thought I’d test it out myself by opening my own account.
Setting Up Your Mylo Account
As soon as you download the Mylo App, you’re ready to open your account. To get started, Mylo will guide you through a series of questions designed to establish an investor profile. Mylo will want to know about your investment experience, the time horizon for your savings goal, and your tolerance for risk (how you will respond if your investment were to drop in value).
From there, Mylo will prompt you to come up with a savings goal, or goals. This is where you name your goal. For example, you might decide that you are saving for a winter getaway. You’ll then assign an amount to that savings goal, and a date by which you hope to reach it.
It’s important to make your savings goal a reasonable one and to avoid being too aggressive with the date that you plan to reach it. You want this to be a motivating exercise, after all. And don’t worry if you haven’t figured out your savings goal right away, you can always adjust, or add another one later.
3 Ways to Save Using Mylo
As you’ll find out as you continue reading, Mylo has a tonne of unique features. You can a variety of account types, including TFSAs and RRSPs. You can even donate to your favourite charity. But at the centre of it all, are 3 unique savings features: Roundups (including multipliers) One Time Boosts, and recurring deposits. This is where the magic happens. You can see that my options have been 1x Roundups with a $5 recurring deposit.
Roundups are the main savings feature of the Mylo App. The concept is simple. You make a purchase, and Mylo rounds up to the nearest dollar. The spare change is then deposited into your investment account, and chances are, you haven’t even noticed the extra money that’s left your account.
How Roundups Work
Using a simple example, let’s say you purchase a pack of gum for $1.25. Mylo will instantly move $.75 into savings. If you want to save more quickly, Roundups can be multiplied up to 10X. And Mylo has added plenty of flexibility as well. If at any time, you need to place your contributions on pause, you can simply disable Roundups until you want to start again. What happens if your balance drops? Mylo won’t withdraw any Roundups if your account balance has dropped below $25, preventing a potential overdraft situation.
One Time Boosts
Sometimes you discover that you have a surplus of funds in your account. Rather than be tempted to spend, you can apply a One Time Boost to your next transfer. This lump sum payment feature makes it even easier to save. The minimum One Time Boost is $5.
Automating your savings is one of the best financial decisions you’ll ever make. Mylo Roundups are one way to do this, and recurring deposits are another. Like just about everything else on the Mylo, app, the setup is quick and easy. You begin by assigning a goal to your recurring deposit. You then choose your funding preferences and enable the recurring debit.
Round Up to Give
Mylo doesn’t just make savings easy, they make it easy to give too. Through Round Up To Give, Mylo allows you to select a Canadian charity and set a donation goal, the same way you would a savings goal. Every time you use your connected debit or credit card, Mylo collects the spare change and sends a donation once a month, to your favourite charity. There is a 2% administration fee paid to CanadaHelps, the organization that partners with Mylo to distribute the charitable dollars.
Over time, a few cents can turn into a significant contribution for a cause you care about. According to their website, you can select from over 86,000 Canadian charities, and at the end of the year, you’ll receive a tax receipt for your donation.
In late 2018, Mylo broadened their service offering with a new plan, called Mylo Advantage. For a flat fee of $3/month, Mylo Advantage comes with the following features not available in a basic Mylo account:
- TFSA and RRSP accounts
- Socially Responsible Investing (SRI) optionality
- Faster withdrawals, (next business day, free of charge)
- Advantage Perks – Advantage members are eligible for cashback offers from many of their favourite retailers
If the bonus features of Mylo Advantage aren’t of interest, you can stick with a basic Mylo account, and access the main savings features, such as Roundups, Roundup Multipliers, One Time Boosts, recurring deposits, and Roundup To Give. Withdrawals are free in the basic Mylo, but they do take longer to process, up to 8 business days.
3 Types of Mylo Accounts
Mylo now offers three types of investment accounts: a basic non-registered account, a TFSA, and an RRSP. Let’s take a closer look at the benefits of each account, and how they work within Mylo.
With Mylo, you can open a Tax Free Savings Account (TFSA), for a fee of $3/month. It doesn’t matter if you already have a TFSA with your main financial institution, but if you do have more than one, you’ll be responsible to make sure that you stay within the allowable contribution limit between all of your accounts.
In 2019, the annual limit is $6,000. The beauty of this type of account is that any income earned by the investment is tax-free. With Mylo funds being invested in market-based ETFs, you have the potential to earn a higher return than you would in a standard savings account, and you can get at your money any time. The $3 fee may be a turn off for some, but if Mylo is helping you reach your savings goal sooner, it just may be worth it.
For conservative investors or those with a very short term outlook, a tax-free account may not be necessary. Instead, a Mylo non-registered account might be the best choice. The main advantage to the basic account is that the fee is a paltry $1/month, and you still get access to the most popular Mylo savings features. As a short-term savings towards a vacation, you can see how my portfolio is in cash and high-interest savings.
You can now use Mylo as part of your retirement strategy, by opening an RRSP account. Because Mylo will invest your money in one of 5 low-cost ETF portfolios, they have solutions for the long term investor. When opening a Mylo RRSP, it’s important to answer the investor profile questions accurately, to make sure you’re invested properly. Just like an RRSP held at your main bank, you’ll receive a tax receipt for contributions you make throughout the year. You’ll also be able to select a beneficiary for your account. RRSP accounts are available in the Mylo Advantage Plan, at a cost of $3/month.
Is Mylo Safe?
Referring Friends to Mylo
One thing I noticed as I was getting started with my Mylo account, was the ability to earn $5 through the Mylo Referral program, and the person signing up also gets $5 (use my link to get $5 when you sign up). Because Mylo is geared towards a younger clientele or those new to investing, it’s a great incentive to help your friends get started investing. In fact, if you were successful in making referrals on a fairly regular basis, the $5 bonus would more than cover the monthly $3 Advantage fee, making it a free savings tool.
Using the Mylo App
The more I use fintech apps, the more I’m blown away by their ease of use. My experience with the Mylo app was no different. Opening an account with a traditional bank seems archaic by comparison. As I mentioned earlier, the process was a breeze, as the Mylo app flowed through a series of questions designed to get to know me, and my savings goals.
It made a secure connection to my main chequing account, I set up a small recurring debit, and was able to get my Roundups going almost instantly. I’m really looking forward to watching my savings grow in the coming months. I have savings going to my goal every week, though a multiplier would help me get there sooner without needing to shop more often!
Mylo vs. Wealthsimple Roundup
Mylo isn’t the only fintech company making headlines in Canadian savings. Wealthsimple is another leader in the market and offers a similar feature to Mylo, called Roundup. Wealthsimple’s Roundup feature rounds up your purchases to the nearest dollar and adds it to your Invest or Save account. There is no cost to Wealthsimple’s option, but it exists as a customer acquisition strategy, so you can only save with them.
Who is Mylo Best Suited for?
While Mylo is clearly targeting young adults who are new to investing, I feel like the app can be a great tool for just about anyone. After all, even the most experienced investor has smaller, short term savings goals that arise from time to time. Best of all, Mylo makes saving money a lot of fun.