How does Monzo work?
Monzo works in a similar way to any normal current account. When you apply for an account, you’ll be issued with a bright coral contactless Mastercard.
However, the account is entirely managed through the Monzo app, which is jam-packed with cool features and much slicker than your average banking app. The card is even controlled via the app: you can freeze it if it gets lost or stolen (and unfreeze it if you find it again).
Here are some of Monzo’s main features:
- Get paid a day early. Does what it says on the tin! Our article explains in more detail.
- Salary sorter. Divvy up your salary into spending, savings and bills.
- Spending budgets. Set budgets by category (e.g. eating out, entertainment, transport).
- Savings pots. Split money into interest-earning “savings pots”. You can also “round up spare change” into a pot.
- Bills pots. Get direct debits or standing orders paid out of a “bills pot”.
- Instant spending notifications. See what you’re spending in real time.
- Free cash withdrawals abroad. Currently up to £200, after that it’s a 3% charge.
- No transaction fees abroad. Contactless payments and spending overseas is free.
- Energy switching. If you switch energy provider using the app then you can get cashback.
- Joint accounts. Open a joint account with another Monzo customer.
- Overdrafts. Apply in the app for an overdraft of up to £3,000.
- Apple Pay. Monzo cards work with Apple Pay.
- Loans. Apply for a Monzo loan of up to £15,000.
How do I apply for a Monzo account?
UK residents aged 16 or over can apply for a Monzo bank account through the app, available to download at both the Apple App Store and Google Play Store. You’ll need to provide your personal details and verify your identity by taking a video of yourself and a picture of your ID, but no proof of address will be required.
You can now also open a joint account with Monzo, as long as you both have a regular Monzo account already. You will both receive a new separate joint account card.
If you are 16 or 17 and want to open a Monzo account, you can access all of the same benefits that full UK current account users receive. The only difference is that certain actions are blocked, such as spending on activities that are illegal to under 18 year olds, e.g. gambling.
Signing up for an account does not involve a full credit check and therefore won’t affect your credit score.
Is Monzo good to use abroad?
You can use a Monzo card abroad really easily. You don’t have to do anything! Just travel anywhere in the world and there are no charges for card transactions at all and no charges for ATM withdrawals up to £200 a month – then there’s a 3% fee. The monthly limit for cash withdrawals in European countries is slightly higher at £250, but be aware that is a combined threshold for ATM withdrawals made in the EEA and the UK (then the 3% fee applies).
If spending cash abroad is what is most important to you, we recommend considering Starling Bank. Starling’s account offering is very similar to Monzo’s, and there’s no charge on overseas card transactions, but there are also no charges at all for withdrawing cash abroad, and the maximum amount you can withdraw at an ATM each day is £300.
Also be aware that individual foreign ATMs may charge a fee too – that’s to do with the ATM network itself and nothing to do with Monzo though. All transactions on your Monzo card in a foreign currency are made at the current day’s Mastercard exchange rate, offering a competitive rate that responds to the live market.
Then, when you get back from your trip, Monzo will send you a little summary of how much you spent.
Saving with Monzo
Monzo doesn’t offer savings accounts itself, but it’s got a shiny new savings marketplace, which means that you can open a savings account with another provider directly from the Monzo app (Monzo refers to those as “savings pots”). We’ve got a full review of Monzo’s savings feature if you want to read more.
Also, if you don’t want to open a separate savings account you can just set money aside in a regular Monzo “pot” – but this won’t pay interest.
Monzo’s pots are a great way to use a budgeting technique known as “piggy banking”. Our guide to piggy banking. gives you the lowdown on how to budget better using this popular technique.
As we mentioned above, you can also simply apply the “round up spare change” feature and add it to your pot (e.g. a £2.57 spend at Sainsbury’s is rounded up to £3, which equals 43p set aside into your pot.) If you like the sound of this, maybe you should also check out Moneybox. It’s the same principle, but your spare change is then invested to potentially boost your savings.
Monzo personal loans
You can now apply for a personal loan from the Monzo app. You’ll be able to borrow between £200 and £15,000, but approval will depend on your credit history and score.
Unlike with many high street lenders, Monzo offers you a personalised quote before you actually apply. This way, you’ll know exactly how much the loan will cost you from the start. Monzo does check your credit score but won’t proceed with a “hard” credit check unless you decide to actually take out the loan. If you don’t, nothing will show on your credit record.
We also have a dedicated review of Monzo’s personal loans if you want to learn more.
Monzo’s energy switching service
Monzo now also offers an energy switching service. It’s similar to its savings marketplace – Monzo doesn’t offer the service in-house, but partners up with providers that do. If you want to give it a go, you can open your Monzo app and fill in some details about your house and energy use. Monzo will then offer you quotes from its partner providers. If you do decide to sign up to one of these, you’ll get up to £50 credit for switching.
This is Monzo’s new buy now, pay later (BNPL) option. If you’re a Monzo account holder, the Flex feature is designed to let you pay for purchases over £30 in a series of instalments.
Monzo Flex involves an up-front application in the Monzo mobile banking app, where you’ll get an instant decision. If you’re approved, you’ll get your own individual credit limit. You can then choose to pay for a purchase in 3 interest-free instalments, or in 6 to 12 instalments at an interest rate of 19% APR (variable). Your first instalment is taken straight away, and instalments are then taken monthly until you’ve paid off the total amount due.
You can edit your instalment plan at any time, by paying off the plan early for no fee, or by organising to pay for a purchase over a longer time period. It’s also possible to “turn back the clock” and choose to use Flex on an existing transaction made with your Monzo card from the last 2 weeks. Your Flex balance sits alongside your Monzo account balance in the app, so you can see all your spending in one place.
Monzo fees and limits
- Card payments. Free in the UK and abroad.
- UK ATM withdrawals. There is a 3% charge on withdrawals of more than £250 in a 30-day period across the UK and EEA. The maximum cash withdrawal limits are £400 a day and £5,500 a month.
- Foreign ATM withdrawals. ATM withdrawals in Europe will fall within your combined £250 UK and EEA monthly limit, with a 3% charge on amounts taken out above that. Elsewhere in the world, cash withdrawals are free up to £200 a month, with a 3% fee after that.
- Cash deposits. You can load cash into your account at all PayPoints. It will cost £1 a transaction. You can deposit up to £300 a day and up to £1,000 every six months.
- Card replacements. You’ll need to pay £5 for each replacement you order – unless you’re a victim of fraud, card theft or your card has reached its expiry date.
Monzo has also launched an upgraded current account called Monzo Plus, which comes at a cost of £5 per month.
Monzo Plus comes with all the features of the regular Monzo account, but with some noticeable differences that the brand hopes will entice fee-paying customers. Two of the more striking features include the Open Banking-powered ability to see all of your bank accounts in one place, and the introduction of “virtual cards”, which are designed to help you shop more safely online.
Speaking of cards, the physical one accompanying this account is “holographic” and comes in blue, rather than Monzo’s customary hot coral shade. You can use this card to withdraw more money for free at overseas ATMs – up to £400 a month, compared to the current £200 limit on standard Monzo.
The Plus account also comes with a more advanced version of the “round up” feature – which many Monzo account holders already use to siphon off spare change into regular or savings “pots”. You can create custom spending categories and drill down more into those categories, even splitting out one bill across different categories.
You can also check your TransUnion credit score every month through the Plus account, and earn interest of 1.00% AER/Gross (variable) on balances of up to £2,000.
These new account features will certainly appeal to banking customers who are after more enhanced money management options, but you’ll need to weigh up whether at £5 a month (or £60 a year) these options are a definite must have. Learn more about Monzo Plus here. Monzo also has a premium account which we have reviewed here.
The differences between Monzo and Monzo Plus
Monzo overdraft fees
Monzo offers an optional overdraft to its customers that you can activate in the app. Enter your address, previous addresses and salary, and Monzo will run a soft credit check on you (this won’t affect your credit score).
If you’re accepted, Monzo will instantly set up an overdraft for you. The limit will depend on your salary and credit history and can be up to £3,000. You’ll then be presented with an agreement – and unlike the initial soft credit check, accepting the terms will leave a record on your credit history.
Monzo charges overdraft interest rates of 19%, 29% or 39% EAR (variable) depending on your credit score.
The vast majority of payments which exceed an arranged overdraft limit will simply be rejected. Some payments, like those to TfL, can’t be rejected because they are “offline” – in which case, you’ll go into an unarranged overdraft, which Monzo will price just like the arranged one.
Is Monzo a bank?
Yes! Monzo is a bank. “Monzo Bank Ltd” is authorised in the UK by the Prudential Regulation Authority (PRA) and is regulated by the Financial Conduct Authority (FCA).
Is Monzo safe?
It’s as safe as any other bank. The money in your Monzo account is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000. The FSCS is an independent statutory fund set up to safeguard consumer finances in the event of a bank being unable to meet its payment demands. Monzo has full FSCS protection, covering up to £85,000 of your money – as is the standard for UK bank accounts.
|Live chat support||24/7 live chat support available in the app|
|Telephone support||In the UK dial: 0800 802 1281 and from abroad dial: +44 20 3872 062|
|Email support||Email: firstname.lastname@example.org|
|Closing your account||Email: email@example.com to close your account|
|Order replacement card||Order in the app, card should arrive within 5 working days|
|Freeze card from app or online banking|
|Report card lost or stolen||Yes, through the app|
|Cancel direct debits||Cancel direct debits in the app|
Monzo customer reviews
In our independent 2021 customer satisfaction awards, Monzo won Best Overall Bank with 5 out of 5 stars and 89% of users saying they would recommend the service. The brand’s well designed and user-friendly app, plus the overall experience, were favourites with customers.
It’s a similar story on other online customer review forums. On Trustpilot, Monzo has 4.5 out of 5 stars and a rating of “excellent”, based on nearly 18,000 reviews (updated September 2021).
Pros and cons of Monzo
- Full UK current account – you can do all the stuff you can do with a normal bank and more.
- Apply quickly from the app without proof of address – you won’t be credit-checked unless you apply for an overdraft.
- Slick, fun app that is packed with cool features.
- Spend abroad with no fees at the Mastercard exchange rate.
- Deposit cash into the account at any store which shows the PayPoint logo.
- Buy now, pay later option for account holders (Monzo Flex).
- Open a savings account directly from the app with one of the providers Monzo works with.
- Fully FCA-licensed and FSCS-protected.
- No bank branches isn’t great for those who prefer face-to-face customer service.
- 3% charge for overseas ATM withdrawals over £200 – some other digital bank accounts (e.g. Starling Bank) have no such charges.
Monzo is the most popular digital challenger bank in the UK (by customer numbers), and for a good reason. It’s free account is super easy to use, set up and manage, and the app is colourful and fun (as long as you can live with the loud, judgemental sound it makes every time you spend money!).
The only real drawback is the limit on free ATM withdrawals abroad, which is quite low compared to that of Starling, for example. For most people this won’t really be an issue, but if you are a bit of a globetrotter and often travel to countries where cash is still king, you might want to consider the alternatives.
All in all, Monzo is great if you’re looking for a mobile-first current account with almost no fees, a slick user experience and a young and fresh vibe. Whether you’re planning on using it as a primary current account for your day-to-day finances or as a secondary account when you travel, it does the job quickly, efficiently and with a degree of cheerfulness.
Frequently asked questions
Banking app ratings
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
The customer satisfaction score (“You say”) is based on a survey of 1,941 customers carried out in December 2020.
- Financial Services Compensation Scheme
- Finder Banking Customer Satisfaction Awards 2021
More guides on Finder
Halifax Reward current account review
Discover what the Halifax Reward current account has to offer to see if it’s right for you.
Yorkshire Bank Private Current Account review
Learn about private banking with Yorkshire Bank to see if it’s right for you.
Club Lloyds current account review
Discover what the Club Lloyds current account has to offer in our review.
TSB Spend & Save Plus current account review
Discover what the TSB Spend & Save Plus current account has to offer in our review.
Nationwide FlexDirect current account review
Discover whether the Nationwide FlexDirect current account is right for you.
RBS Premier Select current account review
Discover whether the RBS Premier Select current account is right for you.
NatWest Premier bank account review
Discover whether the NatWest Premier Select current account is right for you.
Metro Bank Private Bank Account review
Learn about private banking with Metro Bank to see if it’s right for you.
HSBC Premier current account review
Discover what the HSBC Premier current account has to offer to see if it’s right for you.
Halifax Ultimate Reward current account review
If you’re happy to pay a monthly fee, discover what the Halifax Ultimate Reward current account has to offer.
Ask an Expert