This easy-to-use banking app is the ideal match for your spending habits
Starling Bank is one of a growing group of “challenger banks” looking to simplify how we manage our finances, using modern technology to bring banking into the present. Starling aims to help you make the right decisions for both your current spending and future saving.
What is Starling Bank?
Starling Bank’s CEO, Anne Boden, describes Starling as a bank “in sync with you”. Unlike a traditional bank, Starling has ditched the idea of physical branches; it says it hopes to create the “best mobile-only personal current account in the world”.
A key aim of the bank is to make your finances accessible to you wherever you are.
Starling Bank: 100% mobile banking
No branches, no fees, no paperwork. Get a smarter kind of bank account with the Best British Bank 2018 – all in under 3 minutes!
Starling CEO Anne Boden talks about why Starling Bank is different
How does Starling Bank work?
Starling Bank issues you with a contactless Mastercard debit card, and you control all of the other features through an app on your phone.
The app focuses on the necessities, with a minimalist design covering key information. Tabs allow you to access other features including:
- Payments. Just as with any payment system, there’s a feature for transferring your current standing orders from your old bank.
- Add money. For anyone who joined after August 2018, there is no limit to how much you can pay in. You can add as much as you like using “Faster Payments” and online banking.
- Spending. Get a record of your transactions, categorised to let you know what you’re spending your money on and advising you on where you can save.
Other key features include:
- Goals. This is basically a digital piggy bank. You set your goal and then squirrel cash away either manually or automatically, encouraging you to save more.
- Card. Starling sends you a physical card when you sign up. From the app, you can activate the card, let Starling know if you’re travelling abroad and manually deactivate it if it gets lost or stolen.
- Starling’s partnerships with third-party financial technology companies offer ways to compare insurance, pensions and mortgages.
Can I travel with the card?
Thanks to Starling’s mobile nature, it is much easier to keep track of your budget while on the road. Charges for spending abroad or withdrawing cash at an ATM aren’t an issue since using your Starling Bank card overseas doesn’t incur extra fees. You will be charged the Mastercard exchange rate for purchases.
Starling Bank overdraft, fees and limits
Starling offers a non-negotiable overdraft option. Once you are offered an overdraft, you can choose whether to accept it and you can adjust the amount of overdraft you want to have, within your upper limit. Interest is calculated daily and charged at 15% AER (annual equivalent rate).
Starling’s fees are competitive:
- Free current account and transactions. Starling doesn’t charge you for basic transactions and banking services. There’s no monthly fee and card payments and ATM withdrawals come for free both in the UK and abroad.
- International money transfers. Starling charges a fee for sending money abroad, which depends on the receiver’s country and the amount of money transferred.
Starling Bank’s interest rate
Starling Bank pays a 0.5% AER to account balances below £2,000, and 0.25% to those under £85,000.
This is relatively uncommon among challengers – N26 and Revolut, for example, don’t pay any interest at all, while Monzo pays a 1% AER but only if you put at least £1,000 aside in one of its Savings Pots.
However, if a considerable interest rate on your balance is what you’re looking for, you may be better off with a traditional bank – some traditional current accounts offer up to 3% AER.
Is Starling safe to use?
With a new bank like Starling, it’s natural to worry if your money will be safe. One major question is: what if the bank goes bust? Would you be covered?
As Starling is covered by the Financial Services Compensation Scheme (FSCS), you would be covered for up to £85,000.
If you fall victim to fraud, Starling is regulated by the Financial Conduct Authority. This means, in most cases, it has to refund any unauthorised payments made on your account without delay. The exception is if you’re negligent.
Starling’s app and card have several security features to protect your account:
- Your finances are secured behind a passcode and password and completing your registration requires video and photo ID.
- If you ever lose your card, you can immediately deactivate it with a push of a button, and customer service is there whenever you need it.
- A live record of your transactions and home screen notifications means you are alerted to any strange payments immediately.
Pros and cons of Starling Bank
- Account is up and running in 20 minutes.
- Contactless bank card delivered within a week.
- Record and categorisation of your spending encourages you to improve your spending habits.
- “Goals” tab emphasises saving.
- Starling’s “Marketplace” offers competitive pensions, mortgages and insurance from other growing fintech companies.
- Safe and secure.
- Fully licensed by the FCA and PRA.
- Starling’s services include current accounts and loans. If you’re looking for a wider range of services, a traditional bank may be better for you.
- There aren’t any bank branches, but you can use the Post Office to deposit and withdraw cash. You won’t get face-to-face communication with a Starling Bank staff member, though.
- Having control over the size of your overdraft and no options to remove contactless from your card can leave you vulnerable to overspending.
- If you’re looking for a decent return on the credit balance in your current account, you’re likely to be better off with a traditional bank.
If you can look past the remote aspects of Starling, then a personal account might be right for you. The minimalist app lives up to the bank’s promises of convenience and efficiency, while the easiness and simplicity is refreshing if you struggle to save but want to improve. If these all sound good to you, then Starling Bank may be the right choice for you.