Kaldi App Reviewed: Turn Everyday Cashback Into Investments

Is Kaldi any good?

I have never used cash back apps, becuase I am bad with money, which is odd considering what I do for a living. I like money, I like writing about it, I like the way it makes the world go round, I like trying to have more of it. But I really hate the admin involved in trying to save it. Every time we go to Pizza Express and my wife brings out her phone to look for the latest discount code, I have to order another Peroni just to cope.

Incidentally, my daughter tells me ChatGPT is a great place to look for discount codes these days.

Which is great for consumers, but bad for affiliate coupon aggregators (or even review sites like us) because it means you can just ask once.

But I know that cashback sites are great because you don’t have to do anything. Beanstalk, won best investing app in our awards this year (because of their excellent customer reviews) and was founded by the team from Kidstart, a cash back site for stuff that you buy for children. I’ve got a Beanstak JISA for my youngest, as it’s really simple to use, but unfortunately, Kidstart doesn’t connect to Beanstalk. I wish it did.

However, along comes Kaldi, fresh from raising a cool million on Crowdcube as part of an overall £3.8m raise, to, help the young “save earlier and better” according to, Mark Burges Watson, the CEO and co-founder.

I think this is great, GoHenry and Louise Hill have done a great job of helping children understand money, both my other children use it for pocket money and building up their JISA pot. I’m actually dreading what they will spend their money on when they hit 18. I hope it’s a gap year. They also have a great campaign to start teaching children about money in school, which is definitely needed as apparently people don’t know what an equity is. I think primary school is too young, though, secondary yes, though.

Getting set up on Kaldi

It was fairly easy to set up an account, although I hate with a passion of a thousand suns having to go and find where I last left my drivers licence to go through the ID checks. Surely, this can be done at a later stage, so that people can just get started. The drop-off rates must be huge. Especially seeing as no one has a wallet anymore, maybe the Government’s Digital ID will take care of that. But then I had to take a picture of proof of address which is a joke because the only letters I get through the post are from HMRC telling me how much tax I owe, and I always hide those at the bottom of my desk draw, so I can ignore them until I absolutely must deal with them. So I had to dig that out, which has depressed me, I was in quite a good mood for a Monday.

In my opinion, if you want to make investing and saving easy for people, make it easy to open an account. This is the regulator’s fault, because they are so scared of people laundering money, that you must prove your ID before you even deposit funds. I think you should go through this sort of thing when you are planning on taking money out. Make it easy to get started, and people will invest more. I am aware though, that brands will get lots of complaints if people have to prove their ID when they ask to withdraw funds. Which could result in lots of bad reviews, so it’s a bit of a balancing act…

Regulation

Kaldi, is not a bank, instead, it’s a payments institution regulated in Gibraltar, but I suspect they are part of the way through the long, drawn-out process of becoming fully regulated by the FCA. Which is another reason it’s not easy to invest in the UK, because the regulators are so anti-anyone-doing-anything-different that it makes it almost impossible to get directly regulated straight off the bat. Instead, you have to be an appointed representative or regulated offshore initially. Which is daft becuase it means that high-risk start-ups are not able to offer consumers FSCS protection, which is the whole point of the Financial Conduct Authority, to protect UK savers and investors.

However, the regulators still make you go through their stupid suitability test, to make sure you understand the risks of investing, which no-one really does. Except, that it’s really simple, the stock markets will probably eventually go up, if you are in them long enough, becuase when you are investing in the major indices you are investing in profitable companies. When they become unprofitable, they are relegated and kicked out of the big index trackers.

Investing

I don’t really want to save for anything, but I would like to put aside the spare change from when I buy a coffee into an investing account. Because it’s money I won’t notice and it’d be nice to see a tidy profit from it in the future.

When you invest with Kaldi, you get the choice of two money market funds (which is basically earning interest on cash) or index trackers (which is basically investing in lots of stocks at once). The money market funds return about 5% a year, just above inflation, which is good for the short term as you won’t lose money.

But if you are savings for five years or more you are better off picking one of the index trackers are ranked by risk. Basically, they contain bonds and shares. The more shares the more risk. I quite like the look of the Vanguard FTSE Global All Cap Fund which invests in over 7,000 global stocks. It’s like buying all the stock markets. But the good thing is that the top ten stocks in the fund are the usual tech giants like Apple, Microsoft, NVIDIA, Amazon, Meta, Alphabet (Google), Broadcom and Tesla. The rest are just fillers for a bit of diversification. Stock markets are basically driven these days by the biggest stocks in the indices, so it’s good to know that you are in the company of the Magnificent Seven.

When I deposited funds to test Kaldi, they were in straight away. You get a sort code and account number just like a normal bank account, which is run in the background by Clearbank, who are FCA-regulated. Fun fact, with FCA regulation comes FSCS cover up to £85k at the moment if your bank or broker goes bust. But, as Clearbank provides banking facilities for lots of different start-ups, that £85k is spread across the lot, rather than just Kaldi if you have an account with another savings platform, like Flagstone for example.

The Test

Anyway, I wanted to test Kaldi at Costa and top up my investments when I buy coffee. £100 in, bit of a faff transferring money from Natwest, and I accidentally did it from my business account rather than my personal account. So I wonder if in fact, it will be returned at some point. I blame it on the fact I had to find a pen and write down my account details, rather than using open banking for the transfer.

The cashback is pretty good from Kaldi, you get 7.5% back when you buy a Costa coffee. Again, still a bit of a faff, as you have to buy a Kaldi code which meant I had to decide how much I was going to spend at Costa before going. I was then sent an QR code (in the Kaldi App), to use at Costa. Easy enough.

I took the dog for an afternoon stroll to test the code. It worked fine, and as a bonus, I was able to use my Costa app and put it towards a free tenth coffee. Which means that as well as getting 7.5% cash back from using the Kaldi voucher QR thing, I also (in real terms after buying 9 other coffees) saved 38p on this one too as well as the 29p from Kaldi.

Plus, after this, I can opt for the transaction to be rounded up and put in my Kaldi savings account. But that would be utterly pointless because Kaldi doesn’t pay any interest on their savings account which means that I’d be losing money against inflation. I’d be better off leaving it in the bank.

I now, of course, have money left on my Costa voucher, but it was a pain to check how much as it took me off app to a site called givex.com and asked for my gift card number and to enter a bot check code. I am not going to do that, because it would mean going back to the app and copying the voucher code and inputting it on givex, then entering the captcha thing in wrong, then maybe having to do it all again.

So what’s going to happen instead is that the balance on that gift card will not be used.

Which is what brands love. All that money sloshing around unused gift cards. Apparently, Starbucks had around $165 million stashed in unused gift cards in 2021. I suspect this figure maybe growing, as the world becomes more addicted to coffee.

But, this could be the genius of Kaldi, instead of your forgotten gift cards turning to nothing, you should be able to opt for any balance to be swept over to your investing account at the end of the month. Instead, it’s only the money you hold with Kaldi that is in your spending balance to your investing account, so that gift card money will still go to waste.

Obviously, if you only deposit into Kaldi exactly what you plan to spend there is no wastage. The other argument is that I should have stayed at home and had a free coffee. But let us not mention that.

But I’ll try and use the 2.5% Kaldi cashback at ASDA next time we do our weekly online shopping delivery.

Interesting fact, if that $165m of Starbucks gift card money had been invested in the Vanguard FTSE Global All Cap Fund in 2021 which I mentioned earlier, it would be worth around $200 million today.

It’s a bit of a shame that you can’t allocate round-ups (to the nearest pound) when you spend directly into your investing account rather than your savings account, because whilst saving is great for tucking money away in the short-term, you can make more money by being invested in the stock market.

Verdict

Overall, Kaldi is a great way to earn cashback, save and invest. But it is hard work!

Pricing: The investment account fees are only 0.15% a year with Kaldi, which is actually cheaper than paying the £4 a month for smaller accounts to invest directly with Vanguard. You can do this in either a JISA or a stocks and shares ISA.

Market Access: A good choice of diverse funds, but no stocks, bonds or ETFs.

App & Website: Really simple app, but you cannot access your account from a computer.

Customer Service: Great, asked lots of questions and got quick responses.

Research & Analysis: A few educational guides and videos, ideal if you are just getting started.

What I’d really like to see and where I think Kaldi would do really well, would be to make the process more seamless. A bit like Currensea, where you have a debit card that links to your main account (I can’t imagine people getting their salary paid into Kaldi) and also sits in your Apple Wallet. So that when you pay for things at checkout via Apple Pay you can pay with your Kaldi card and get cash back applied automatically from transaction fees, then added to your investment account.

What this would mean is that whenever you spent money on your phone you could have the cashback and round up and invested automatically without ever having to do anything. That would be the dream, for me as a lazy consumer anyway…