Even though they both offer free digital accounts, and cards with low overseas usage fees, Monzo and Wise are actually quite different.
So, which is better for sending money to your mum back home? And which is cheaper to go on a shopping spree during your holiday in Greece? We’ve compared them to find out.
Monzo vs Wise: Key differences
While being first and foremost a peer-to-peer money transfer service, Wise (formerly known as TransferWise) now also offers a digital multi-currency account that comes with an app and a debit card. This has turned it into a competitor to challenger banks like Monzo and Starling – at least when it comes to spending or sending money abroad. Monzo offers a full bells and whistles digital current account, as well as a card that is wallet-friendly when using it overseas.
Here, we outline the key differences between Monzo and Wise:
- Monzo is a fully licensed bank. This means more features (including overdrafts) are available with its current account, plus it offers FSCS (Financial Services Compensation Scheme) protection on deposits up to £85,000. Neither of these points apply to Wise.
- The Monzo app is packed with banking and budgeting features. The Wise app is all about (you guessed it) money transfers, while Monzo is all about digital banking. Cool features in the Monzo app include spending reports and categorisation, spare change round-ups and saving pots.
- Wise lets you hold money in 40+ different currencies. It also provides you with sharable bank details for 10 “local” country accounts – including for the UK, EU, US and Australia – so you can receive money from people living there who are paying you in their local currency. With Monzo, you only get a UK account in which you can hold British pounds.
- Monzo doesn’t allow you to receive international transfers into your account. This is possible with Wise and is also free (although you can only receive payments in the same currency as your chosen account balance).
- Guess who handles international money transfers sent from Monzo accounts? Wise. The pair have a partnership that allows Monzo account holders to send money abroad through Wise, directly from the Monzo app.
Monzo vs Wise: Fees comparison
|Monthly account fee
|No monthly fee
|No monthly fee
|Cost to receive card
|Free in the UK and abroad, converted at the Mastercard exchange rate when overseas
|Free in the UK and abroad, but Wise currency conversion fees apply if you don’t already hold a balance in the local currency
|Currency conversion fees
|Fee of 0.24% to 3.69% for card payments and ATM withdrawals, depending on the currency involved
|Free up to £250 in the UK and EEA (combined) per month, and up to £200 elsewhere per month, then a 3% fee applies
|2 free withdrawals in the UK or abroad up to a total of £200 per month, then a 1.75% fee and a 50p withdrawal charge, plus Wise currency conversion fees apply if you don’t already hold a balance in the local currency
|Money transfer fees
|Free transfers to UK accounts, for international transfers Monzo has a partnership with Wise (so Wise’s fees apply)
|Every transfer involves a fixed fee plus a variable fee that both depend on the currencies involved, and money is converted at the interbank exchange rate
|Read Monzo review
Our verdict: Is Monzo better than Wise?
Arguably, Monzo and Wise meet different needs and suit different people. In a nutshell, Monzo is good for day-to-day banking and travelling, while Wise is ideal for sending money abroad and holding multiple currencies.
So, you’ll be better off with Monzo if you’re mostly looking for a current account, with full banking functionality and saving and budgeting features, from savings pots to spending reports. It’s also a great option if you want a card to make payments abroad with, as it doesn’t charge any transaction or currency conversion fees for card spending, wherever it is in the world you’ve travelled to.
You should consider Wise instead if you only want to send the occasional international money transfer, as you can still do that from its website, without applying for a Wise multi-currency account. Although the Wise account would be more suitable for you if you need to make a lot of transfers or handle various different currencies at the same time, as you can hold balances in up to 56 currencies with it.
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