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N26 is a German-born digital bank that launched in the UK in late 2018. In February 2020, following the UK’s departure from the EU, N26 announced it would close its UK operation. There are plenty of other options, though, which we’ve rounded up here.
Challenger banks don’t offer a whole lot of products, but at the very least you can expect a debit card, a fee-free current account and a well-structured mobile app that helps you keep track of your spending and make payments easily.
Here are the main N26 alternatives. You won’t be charged for using the card or making bank transfers in the UK by any of them, but there are (slight) differences when it comes to other features.
Monzo and Starling are totally the top players here, but it’s a close call. Ultimately, we’ve picked Starling because you can deposit cash in your account for free and because your overdraft rate is more likely to be cheaper with Starling Bank than with Monzo. For example, going overdrawn by £100 for 7 days will cost you £3.50 with Monzo, but only £0.27 with Starling.
All the challengers mentioned above (apart from Monese) easily beat most traditional banks when it comes to making payments abroad, simply because they don’t charge a foreign currency transaction fee. The foreign currency transaction fee is a percentage that’s added to all your payments made in another currency by most banks; it can be up to 3% of the transaction, which makes your holiday bank charges pretty expensive.
Instead, fee-free card spending abroad is a given with these challengers, so you’ll need to look at other features to compare them:
When it comes to all foreign currency things, the choice is between Starling and Revolut. For travelling, Starling tops the league: if you go somewhere where cash is still the main payment method, as is the case for many countries outside Europe, Revolut’s £200 monthly limit on free ATM withdrawals can be annoying.
On the other hand, fee-free money transfers are Revolut’s specialty – everyone else, including dedicated money transfer companies, charges at least a small fee. So if you also need to send money out of the country every now and then, Revolut is probably your best option.
If you’re only looking for top-paying savings accounts, challengers aren’t your best shout; you should rather take a look at what traditional banks offer.
However, they still have something to offer to savers:
There is no clear winner here. Among challengers, Atom is the one that specialises in savings accounts, and if you want a fixed-term one, it can be competitive.
Monzo tops the league for easy-access accounts instead, but what you’re doing is actually opening a separate account with another company, so you have to decide whether it really counts.
Finally, Starling is the only one that pays interest directly on your current account balance, so we’re going with Starling – 0.05% on up to £85,000. However, there are more competitive interest rates available with more traditional banks if that’s your priority.
Are challengers safe?The short answer is yes, all the challengers we’ve mentioned are registered with the Financial Conduct Authority (FCA) and fully authorised to do what they do. However, there is a slight difference when it comes to how your money is protected:
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.
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