Monzo vs TransferWise

Should you get TransferWise or Monzo? Well, it depends on what you need.

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Even though they’re both riding the cool-fintech-company-with-a-fresh-approach-to-money wave, Monzo and TransferWise are actually quite different.

So, which is better for sending money to your mum back home? Which is cheaper to go on a shopping spree during your holiday in Greece? We’ve compared them to find out.

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Monzo vs TransferWise: Key differences

While being first and foremost a peer-to-peer money transfer service, TransferWise now also offers a digital multi-currency current account that comes with an app and a debit card. This has turned it into a competitor for challenger banks like Monzo and Starling.

However, even though they both offer digital accounts with fee-free spending abroad, the differences between Monzo and TransferWise are quite prominent:

  • Monzo is a fully licensed bank. This means more features are available (including overdrafts) and FSCS protection on your deposits up to £85,000.
  • The Monzo app is packed with banking and budgeting features. The TransferWise app is all about (you guessed it) money transfers, while the banking side of it is a bit more basic. Cool features in the Monzo app include spending reports and categorisation, spare change round-up and saving goals.
  • TransferWise lets you hold money in 40 different currencies. You also get full bank details for UK, EU, Australian and US accounts. With Monzo, you only get a UK account in which you can hold pounds.
  • The Monzo marketplace offers direct access to many more financial products. This includes savings accounts (“Savings Pots”).
  • Monzo doesn’t allow you to receive international transfers. This is free with TransferWise.
  • Guess who handles international money transfers sent from Monzo? TransferWise. They’ve got a partnership that allows you to send money abroad through TansferWise directly from the Monzo app.

Monzo vs TransferWise: Fees

Monthly fee No monthly fees No monthly fees
Card payments Free in the UK and abroad Free in the UK and abroad, but currency conversion fees apply
Currency conversion Free for both card payments and ATM withdrawals 0.35%-2.85% depending on the currencies involved
ATM withdrawals In the UK: free. Abroad: free up to £200 a month; 3% fee after that Free up to £200 a month; 2% fee after that
Money transfers Through TransferWise £0.65 fixed fee (can vary according to the currency) + currency conversion fee
Conversion rate Mastercard exchange rate Interbank exchange rate
Read Monzo review Visit Transferwise

The verdict

Arguably, Monzo and TransferWise suit different needs for different people. In a nutshell, Monzo is good for day-to-day banking and travelling, while TransferWise is for sending money abroad and holding multiple currencies.

So, you’ll be better off with Monzo if:

  • You’re mostly looking for a bank account. When it comes to banking, Monzo easily gets the upper hand.
  • You want saving and budgeting options. From Savings Pots to spending reports, Monzo has got it covered.
  • You want a card to make payments abroad. It will be cheaper with Monzo which doesn’t charge any currency conversion or transaction fees at all.

You should consider TransferWise instead if:

  • You only want to send the occasional money transfer. With TransferWise, you can do it from the website, without applying for a current account.
  • You need to handle various different currencies at the same time. TransferWise is probably the best available for the number of different currencies it lets you hold.

Finally, if you’re looking for a multi-currency account but TransferWise doesn’t sound quite right, go check Revolut out (it’ll be cheaper in most cases!).

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