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Monzo is one of the biggest names among challenger banks in the UK. It’s a digital, mobile-only bank that offers a current account with a well designed app and a hot coral Mastercard.
In this review, we take a look the features of the Monzo current account and app, from spending visualisations to how Monzo handles overdrafts.
Monzo is a challenger bank that operates without branches and offers a full current account and contactless Mastercard. They replaced its previous prepaid card, which has no longer been usable since 4 April 2018.
Monzo works in a very 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 packed with cool features and much slicker than your average banking app. The card is controlled via the app: you can freeze it if it gets lost or stolen (and unfreeze it if you find it again).
To help you see where your money goes each month, all transactions are broken down into the following 12 categories:
You can then visualise your spending patterns in a graph that tells you what you’re spending money on, and get spending reports after a holiday.
There is also a handy feature that allows you to split a bill with your friends. You can send them a custom link to get paid easily and quickly without having to set up a bank transfer.
UK residents aged 16 or over can apply for a Monzo 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.
Monzo debit cards can be used abroad without having to notify the bank. There is no charge for card transactions and ATM withdrawals outside of the UK, or for making online payments in a foreign currency.
There is, however, a £200 fee-free withdrawal limit for overseas ATMs – a 3% charge is applied to any withdrawals that exceed £200 cumulatively during a 30 day period. Be aware that the ATM owner may charge still charge a fee!
The usage of this fee-free allowance can be monitored within the app to prevent exorbitant holiday spending. All transactions in a foreign currency are made at the current day’s Mastercard exchange rate, offering a competitive rate that responds to the live market.
Monzo doesn’t directly do savings accounts, 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 “Saving 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 set money aside in a Monzo sub-account (a “Pot”), that won’t pay any interests.
Finally, the Monzo app has a series of features that can help you with your budgeting. It automatically categorises your spending and you can activate the round-up feature. If you do it, your transactions will be automatically rounded to the nearest pound, and the spare change will be saved in a Pot. You can thus build up a reasonable amount of savings without having to think about it too much.
Monzo is (almost completely!) free to use both in the UK and abroad:
Monzo has also launched a premium offering, called Monzo Plus, that offers extra features in return for a monthly fee.
Monzo offers an optional overdraft to its customers that you can activate in the app. Enter you address, previous addresses, salary, and Monzo will run a soft credit check on you.
If you’re accepted, Monzo will instantly set up an overdraft for you. The limit will depend on your salary and credit history. You’ll then be presented with an agreement – unlike the initial soft credit check, accepting the terms will leave a record on your credit history.
Monzo charges a daily fee of 50p whenever you’re overdrawn by more than £20. If you’re using less than £20, you won’t be charged at all. The maximum Monzo will ever charge you in a month is £15.50 (where the month has 31 days), which means that if you used the full amount of your overdraft for 90 days, the total amount to pay would be £45. There are no other fees.
Payments which exceed an arranged overdraft are simply rejected.
Yes, Monzo is a bank. “Monzo Bank Ltd” is authorised in the UK bythe Prudential Regulation Authority (PRA) and is regulated by the Financial Conduct Authority (FCA).
The Financial Services Compensation Scheme (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 which provides compensation for the loss of up to £85,000 – as is the standard for UK bank accounts.
Looking for something similar to Monzo? Check out our guide on Monzo alternatives.
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A ‘Golden Ticket’ is Monzo’s name for its refer a friend system. Basically, it’s a link an existing customer can send to a friend inviting them to join Monzo.
Existing users get the Golden Ticket in their app, then copy and send the link by email, text, or messaging services like Whatsapp or Facebook Messenger.
Golden Tickets are supposed to make joining Monzo quick and easy. However, they’re not as essential as they used to be.
These days anyone can join Monzo in a matter of minutes. Monzo introduced Golden Tickets when it had a waiting list to join, so existing customers could help their friends jump the queue.
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★★★★★ — Poor
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