Digital banking

Best for

App experience

Starling Bank

Best for

£125 switch incentive

HSBC Advance Bank Account

Best for

Money management

Plum

Best for

Budgeting

Yolt

How we chose our top picks

For our top picks, we've evaluated a number of digital bank accounts against a range of metrics to select accounts for specific needs. Keep in mind that our top picks may not always be the best for you, and it's wise to compare for yourself to find one that works for you. Read our full methodology here to find out more.

Switch and receive a £125 reward

• £125 reward when you switch your main current account (offer not available if held a HSBC current account, or opened a first direct or M&S Bank account, since 1 January 2017)
• Earn 2.75% AER / gross interest with the linked HSBC Regular Saver
• To be eligible for HSBC Advance, customers will need to pay in a minimum of £1,750 per month or £10,500 over 6 months and qualify for a minimum £1,000 arranged overdraft

Go to site

The days of going to a bank branch and standing in a queue so you can speak to someone are numbered. Mobile banking puts your finances at your fingertips 24/7. There’s a host of challenger banks, digital-only banks and personal finance apps available now, designed to give you better, faster control of your cash.

We’ve rounded up everything you need to know from reviews and product comparisons to news and video interviews with the key players.

Compare challenger banks and apps

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Name	Product	Ratings	Interest (AER)	Arranged overdraft	Key benefits	Link	Representative example
HSBC Advance Bank Account		We say ★★★★★ You say ★★★★★	0%	39.9% EAR variable	£125 when you switch	Go to site	Plus earn 2.75% AER / gross interest with the linked HSBC Regular Saver To be eligible for HSBC Advance, customers will need to pay in a minimum of £1,750 per month or £10,500 over 6 months and must qualify for a minimum £1,000 arranged overdraft. To be eligible for the £125 switching offer, customers must switch from a non-HSBC Group current account product. Other T&Cs apply. Representative example: If you use an arranged overdraft of £1,200, you’ll be charged interest at 38.9% (0% EAR variable on first £25, 39.9% thereafter).		loading Fetching your data...
Current Account - Age 18 and over		We say ★★★★★ You say ★★★★★	0%	15% EAR variable	Award-winning current account, apply in minutes	Go to site	No fees for spending or withdrawing cash overseas - currencies are converted at Mastercard’s standard exchange rate Representative example: If you use an arranged overdraft of £1,200 you'll be charged interest at 15% EAR variable.		loading Fetching your data...
Everyday Current Account		We say ★★★★★ You say ★★★★★	0%	39.94% EAR variable	Interest and fee free overdraft for first four months when you switch	Go to site	Up to 15% cashback at a range of major retailers Representative example: If you use an arranged overdraft of £1,200 you'll be charged interest at 39.94% EAR variable.		loading Fetching your data...
Activeplus		We say ★★★★★	0%	N/A	Guaranteed acceptance plus a credit building feature	Go to site	Account fee of £5.95 per month.		loading Fetching your data...
thinkmoney Managed Current Account - Managed Current Account		We say ★★★★★	0%	N/A	Guaranteed acceptance	Go to site	Earn cashback on your purchases when you shop through the ThinkMoney rewards portal Account fee of £10 per month or £15 per month.		loading Fetching your data...
Monzo			0%	Interest rates of 19%, 29% or 39% EAR (variable)	N/A				loading Fetching your data...
Revolut Standard		We say ★★★★★ You say ★★★★★	0%	NA	N/A		Enjoy one free international transfer each month plus exclusive discounts on top brands with Perks Plus. Account fee of £0.		loading Fetching your data...

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Digital banking deals for October 2020

Read digital banking reviews

We review every digital bank, app and challenger. Our reviews are regularly updated to cover new features and releases.

Watch digital banking video interviews

Latest digital banking news

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What is digital banking?

Digital banking is a way to control your money, usually through a smartphone app or web app. It allows you to log into your account anywhere with Internet access, giving you constant visibility of your money and helping you understand the best way to manage it.

Why should I use app-based banking?

There are several advantages to app-based banking:

• Banking access in your pocket
• Many companies offer 24/7 access to banking support
• Instant spending notifications
• Many banking apps offer ways to automatically save money

Another major benefit of app-based banking is the degree to which it has opened up the competition. The new Open Banking rules have enabled third-party apps to innovate, drawing on the infrastructure of traditional banks.

Things to know about app-based banking

Here are a few things that you may not know about using your mobile as your main point of contact with your bank:

• Some apps require credit checks

  If you’re planning to apply for an overdraft on a banking app, you will be subject to a credit check. Even if you’re not applying for an overdraft, most banking apps require some form of ID to prove that you are who you say you are.

• Your money may not be protected the same way it is with high street banks

  High street banks are protected by the Financial Services Compensation Scheme (FSCS) to the amount of £85,000. Not all app-based banks have this same protection. Make sure you know what level of protection your new app-based bank is offering you, just in case anything goes wrong.

• App-based banking doesn't always afford the same rewards as traditional banks

  If you’re looking to change banks, switching to an app-based bank is not necessarily the most rewarding. Although there are plenty of functionality rewards (24/7 access, automatic savings, etc) the financial rewards, such as a new customer cash incentive, may be greater at a traditional high street bank.

• If you forget your pin or lose your card, most app-based banks won't panic

  A benefit of an app-based bank is having full access to your account at all times. Lots of app-based banks allow a temporary freezing of your account in the case of a lost card, so if you find it again it’s not as much hassle to get a replacement. If you forget your pin, the banking apps also tend to have access to a pin reminder after you complete a couple of security questions.

• Some banking apps link to your pre-existing bank accounts and simply show you ways to spend better

  Not all app-based banks are banks in the traditional sense. Some banking apps work alongside your pre-existing accounts to gather all your spending data in one place, offer you insights into the way you spend your money and suggest ways for financial improvements.

Different types of app-based banking

App-based banking is different to traditional banking in many ways. Unlike traditional banking, app-based banking covers a much wider definition of “banking”.

• Current account apps

  As part of the app-based banking innovations, a clear class of banking app has emerged: the challenger bank. Challenger banks are new, fledgling banks that are aiming to take on the big, traditional high street banks and change the way we save and spend money. Challenger banks such as Starling, Tandem and Monzo are similar to traditional banks in that they offer the full current account experience but with all the added benefits of an app-based bank.

• Apps that help you save

  One of the most common reasons for people heading away from traditional banks and towards app-based banking is how easy app-based banking makes it for people to save money. Several providers such as Plum and Chip offer automatic savings for customers. Plum’s clever computer program looks at your spending habits and income and identifies how much you can reasonably save each month and then helps you set up a direct debit to your Plum savings account for this same amount.

• Prepaid card apps

  Another way to use app-based banking to help you save is through the use of prepaid cards. Cards with banking companies such as Pockit, Cashplus and Tuxedo allow you to load specific amounts of money on to your card and even further segregate this money into “pots” to spend on different things. This way you don’t have access to too much money all at once and are less likely to fall for those expensive “impulse buys”.

• Investment apps

  Another popular way to use app-based banking is saving through investment. Apps such as Moneybox allow you to make weekly or one-off deposits to three risk-assessed categories of investments. Several of the app-based banks also allow you to sign up to a “round-up” where your account rounds up your purchases to the nearest pound and uses the change you would have received as an investment.

• Traditional banking apps

  App-based banking doesn’t only apply to challenger banks or money-saving banking apps, it’s also becoming increasingly possible to bank on your smartphone with traditional banks such as Barclays and Natwest, both of whom have highly-rated mobile apps where you can control your money.

Best for

App experience

Starling Bank

Best for

£125 switch incentive

HSBC Advance Bank Account

Best for

Money management

Plum

Best for

Budgeting

Yolt

Banking in lockdown: Is the honeymoon over for challengers?

Finder published a paper in September 2020 on how the coronavirus pandemic has changed banking and how the banking industry is adapting. Our paper includes original research from social analytics specialist BrandsEye and predictions from experts including Helene Panzarino, associate director of The London Institute of Banking & Finance, Jamie Broadbent, head of digital & innovation at RBS International, Nigel Verdon, CEO at Open Banking platform Railsbank and Jon Ostler, CEO of Finder UK.

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