Monzo and N26 are two major names in the emerging crop of “challenger banks”, we look at how they compare.
Over the last decade, digital banks such as Monzo and N26 have shaken up the banking world, bringing banking into the smartphone age.
Traditional banks continue to fail when it comes to offering customers easy to use and stylish apps, while their online banking processes are often laborious and slow. By contrast, digital banks such as Monzo and N26 have lured in customers by offering snazzy apps, real-time information, and fee-free spending abroad.
Here we take a closer look at two of these major “challenger banks”.
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Monzo and N26 at a glance
|Fees and charges||Free||Free|
|Delivery speed||Between 2-7 working days||5-7 working days|
|Payments||Pay via bank transfer or send instantly to other Monzo account||Use MoneyBeam to transfer money instantly. Is partnered with Transferwise so can send money to 16 countries.|
|UK ATMs||Free, limited to £400 a day||Free|
|Spending insights||Spending tracker provides a breakown of how much you've spent and where||PULSE26 analytics offers insights like the restaurant you visit most. Monthly reports help understand your spending habits.|
|Overdraft||Yes - will be charged||Not launched in the UK|
|Categories||10+ categories, regularly updated||20+ categories|
|Direct debits||Yes - future payments shown in homefeed||Yes|
|Top up||Via bank transfer, standing order, or have salary paid in||Via bank transfer - IBAN needed and details needed|
|Freeze your card||Yes: touch of a button in app||Yes: touch of a button in app|
|Alerts||Monzo's Targets sends notifications to warn if you're spending too fast. Dashboard changes from green to orange to red to indicate overpending.||Alerts for withdrawing money and paying|
|Interest||Marketplace with 8 savings accounts both fixed rate and easy access, £500 minimum deposit.||None|
|Savings goals||Monzo pots let you put money aside, protected from your daily spending||n26 'Spaces' feature lets the user open sub-accounts to stash your money away|
|Visualisation||Monzo uses a monthly graph and a pie chart to show the trajectory of your money, and how it is broken down||Monthly spending statistics shown in pie chart|
|Foreign ATM withdrawals||No ATM fees up to £200 a month. 3% charge over £200.||ATM fees differ depending on country|
|Foreign transactions fee||No fees||No fees|
|More Info||Go to site|
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Popularity of Monzo and N26 over the past year
Monzo vs N26: The verdict
In most areas, there’s not a whole lot separating Monzo and N26.
For day-to-day banking, both of their apps offer similar features. Transaction categories, budget goals, and spending insights are available from both these options.
Monzo may label their saving feature ‘Pots’, while N26 refer to their one as ‘Spaces’, but they’re essentially the same thing. Sub-accounts within your main account so you can hide money away for a rainy day.
With both you can send money to friends quickly and easily, and for those looking to transfer money abroad, both of these digital banks use Transferwise. So the costs will be cheaper than sending through a traditional bank.
However, there is a different in using your cards abroad. N26 will charge their basic customers a 1.7% fee when taking cash out abroad, while with Monzo you get the first £200 in a thirty day rolling period without any extra charge. You may want to compare exchange rates on the day too, to see how Monzo’s MasterCard rate compares with N26’s mid-market rate.