Best online banks: Discover app-based banking UK 2021

Best online banks: Discover app-based banking UK 2021

A number of challenger banks have shaken up the UK banking sector with mobile-only current accounts, but which ones are the best?

Personal banking has experienced a huge shake-up in the UK in recent years.

A number of challenger banks have formed to try and remove the stranglehold of the “big six” banks – and they are doing a great job.

These challenger banks are allowing Brits to open and manage current accounts, loans and mortgages using their smartphone.

In many cases, the smartphone apps offered by these challenger banks allow you to manage your money far better than any software on offer from the traditional banks.

What’s more, since they don’t have the large overheads that come with running UK branches, they can offer market-leading rates on their products.

How to find the best online bank

To find the best online bank, you need to consider what factors are most important to you. Here are some of the main advantages that these banks offer over traditional banks.

  • Fast and simple application process. Often, there’s no need to provide address history or undergo a credit check.
  • Market-leading rates. These banks frequently appear near the top of the best-rate tables for savings accounts, loans and mortgages.
  • Budgeting software. As well as managing your account, you’ll usually be able to see an in-depth analysis of where your money is going and how close you are to meeting your savings goals. Learn more about budgeting apps.
  • No fees on overseas spending. Most online-only banks let you use your debit card overseas without any extra charges.
  • Keep a balance in multiple currencies. Useful for frequent travellers.
  • In-app customer service via live chat. No need to visit a branch or wait on hold.
  • Savings and investment service. Transfer your spare cash into savings and investment products with the tap of a button.

Below, you’ll discover the main perks offered by the most popular online-only banks. This information should help you to decide which online bank is best for you.

Latest online-only bank reviews

These four online banks are the most responsible for the banking shake-up in the UK.

Starling Bank

Starling Bank launched in 2014 and has expanded to offer an impressive range of financial products.

Here are some of the highlights:

  • Current account paying 0.05% interest on balances up to £85,000
  • Apply to add an overdraft within seconds using the Starling Bank app
  • No fees on overseas spending or ATM withdrawals
  • Transfer money to 38 countries with competitive rates
  • Build a separate balance in euros
  • In-app budgeting software
  • Personal loans
  • Compare and apply for other financial products from third parties using the app’s Marketplace feature

Revolut

Revolut launched in 2015 with a primary focus on providing fee-free international spending and money transfers.

It offered a prepaid card service upon launching, but has since gained a full banking licence.

Here are the highlights of Revolut’s current offering:

  • Current account
  • Savings account
  • In-app budgeting software
  • Transfer up to £1,000 (in 30 currencies) overseas with no fees (0.5% fee thereafter)
  • No fees on overseas spending
  • Withdraw up to £200 from overseas ATMs (3% charge thereafter)
  • Upgrade to a “packaged” account with travel insurance and higher limits on ATM withdrawals, among other things
  • Cryptocurrency exchange
  • Trade shares
  • Buy gold and silver

Monzo

Monzo launched in 2015 as Mondo. It originally only offered a prepaid card with unlimited fee-free overseas spending and ATM withdrawals. The in-app spending analysis was revolutionary for its time.

The bank phased out prepaid cards in 2018, as it now has a full banking licence.

Here are the highlights of what the bank has to offer:

  • Current account with an option to add overdraft of up to £500
  • In-app budgeting software
  • No fees on overseas spending
  • Withdraw up to £200 from overseas ATMs (3% charge thereafter)
  • Personal loans up to £3,000
  • Savings accounts

Monese

Monese has provided smartphone-based banking since 2015. Notably, you don’t need a UK address, credit history or regular income to create an account.

It offers a fee-free account or two choices of premium accounts that come with extra features and higher limits on fee-free overseas usage. These accounts have a monthly fee of £5.95 and £14.95 respectively.

Here’s what’s on offer:

  • Create an account without a UK address or credit history
  • In-app budgeting software
  • No fees on overseas spending or ATM withdrawals
  • Transfer money overseas at competitive rates
  • Build a separate balance in euros

Best online bank in the UK by customer satisfaction

In July 2019, we ran a customer satisfaction survey on current accounts in England, Scotland, Wales and Northern Ireland. 1,000 people answered and told us how happy they are with their current account provider. Below we have listed the scores for banks that have no high street presence. Learn more about the full results here.

Customers recommendCurrent accountReview
88%Monzo Monzo is by far the most popular digital-only bank in the UK, apparently for a good reason. New features are constantly being added to its app-based current account, which comes with a bright “coral” (pinkish) debit card. Read our review
87%StarlingStarling’s mobile-only current account is easy to open and manage and the app is packed with features. Starling’s customers expressed the highest levels of satisfaction, only rivalled by Monzo’s.Visit Starling
87%RevolutRevolut’s multicurrency digital account is great for travelling and even better for sending money abroad. You can exchange and hold 29 different currencies for free and also use it as a standard UK account. Read our review
73%MoneseAnother straightforward digital-only account that’s especially good for travellers or people who often have to change country, Monese lets you open a euro account side by side with your UK one, for free.Read our review

The verdict

These online banks are all similar in many ways. We’ve linked to our full reviews of each of them above. The only real downside is that there are no branches where you can speak face to face with staff.

If you decide that one of these banks offers more than your existing current account provider, it couldn’t be easier to switch. All of these banks have signed up to the Current Account Switch Service, meaning they will handle the switch for you in seven working days.

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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