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Alternatives to Monzo
The digital banking revolution is in its golden years, so consumers have never had more banking options. If you don't know how to choose, we've got you covered.
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Banks like monzo including competitors and alternatives
The main alternatives to Monzo are Starling Bank and Revolut. N26 was a big player here but has recently closed down in the UK. Cashplus and Monese are a bit smaller, but should fill that gap in the market.
Cards like Monzo for day-to-day banking
If you’re looking for a challenger that can provide you with a main bank account and cover as many basic financial needs as possible, you will have to think about what you normally use your mainstream bank account for, and what your priorities are.
Challengers are constantly widening their range of services, but there are a bunch of things that they still don’t do. Chances are that in return for low fees, better working apps and less bureaucracy, you’ll end up giving up on something you didn’t realise you like about your normal bank.
Here are some of the features you may be most interested in:
- ATM withdrawals. Starling Bank is probably the top player here – UK ATM withdrawals are for free.
- Cash loads. Starling Bank allows you to deposit cash on your account at Post Offices for free, whereas with Monzo you can do it at PayPoints and it costs £1 a transaction. There’s also Monese, which allows you to do it in both places, and it’s free up to £200 a month (it costs a 2% fee after that). You can’t load cash in your account with Revolut.
- Direct debits. For now, Revolut only allows direct debits from the accounts in euro, so you can’t use it to directly pay your bills in sterling. Its competitors instead support them fully.
- Overdrafts. Monzo and Starling Bank both allow planned overdrafts, but Starling is cheaper.
Alternatives to Monzo for travelling
Abroad transactions and payments are usually challengers’s strongest spot. Traditional banks often charge extra fees when it comes to using their cards abroad and since the beginning the new players in the game have prided themselves in being different.
You can pay with your card abroad without any fee with Monzo, Starling Bank, Revolut and Monese.
Starling also allows free ATM withdrawals abroad.
Revolut and Monese allow free ATM withdrawals abroad up to £200 a month (there’s a 2% fee after that). With Monzo, there is a £200 fee-free withdrawal limit for overseas ATMs (and a 3% fee beyond that).
Alternatives to Monzo for saving
Challengers aren’t big on savings account yet, and if that’s what you’re looking for you may be better off with a traditional bank. However, things are starting to move in this area too.
If you are considering a challenger for a savings account, Atom is probably your best bet. It offers saving accounts and mortgages instead of regular current accounts – something its competitors haven’t quite started experimenting with yet.
Atom offers fixed-rate saving accounts that last up to five years and competitive interest rates that vary according to the number of years you keep your money into the account. Those are established in advance – you cannot withdraw your money until the product term ends.
If you don’t want to open a separate savings account, with Starling you earn interest on your current account balance. The rates are not as good as most savings accounts’, but they are still interesting: 0.5% annual equivalent rate to account balances below £2,000, and 0.25% to those under £85,000.
Are challengers safe?
Monzo offers a full UK bank account and deposits are protected by FCA (Financial Conduct Authority) up to £85,000, as it is standard for mainstream UK banks.
In the recent months, challengers have been competing to ensure the same level of protection and gain consumer’s trust.
Atom Bank and Starling have a UK banking licence and the same deposit protection as Monzo.
Monese isn’t a bank because it doesn’t have a full banking licence, but is FCA-registered as an e-money institution and has to keep all clients’ money in a segregated account that can’t be touched even if the company were to go bankrupt.
Revolut just got a European banking licence – which means that with both your deposit will be protected up to €100,000 (approximately £90,000). However, it will take a while before Revolut’s licence becomes fully effective and includes a deposit protection – until then, it’s true for Revolut what we said for Monese.
So the short answer is yes – main challengers are all safely regulated and if anything were to happen to them your money is as safe as it can be.
Cards and apps like Monzo
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