After revolutionising the world of international money transfers, TransferWise launched its own digital account and debit card, officially entering the challenger bank competition with the likes of Monzo and Starling.
So, how do they compare? Well, in some services, Starling Bank is still way ahead of the game. For others, TransferWise is really competitive and you shouldn’t rule it out. Let’s dig deeper.
Starling vs TransferWise: Key differences
Although they will both let you open a digital-only current account that comes with an app and a debit card, there are many differences between Starling and TransferWise.
- Starling is a fully licensed bank. Unlike with TransferWise, deposits on your current account are protected by the FSCS up to £85,000. Starling’s current account also offers more features and options, such as overdrafts and joint accounts.
- More features available in the Starling app. Starling Bank’s app has all the budgeting features that make banking with a challenger bank a great experience, including spending categorisation, saving goals and the ability to split a bill with your friends. The TransferWise app focuses more on money transfers instead.
- TransferWise lets you hold money in 40 different currencies. It also provides full bank details for UK, EU, Australian and US accounts. With Starling, you can only open UK and EU accounts.
- Starling pays a small interest rate on current account balances. 0.5% AER up to £2,000 and 0.25% up to £85,000.
- The Starling Marketplace offers direct access to many more financial products. Including insurance and mortgages.
- TransferWise supports more currencies for money transfers. You can send money in around 50 currencies (only 20 with Starling).
- You don’t need to apply for a current account to send money with TransferWise. You can simply log in to the website and begin the transfer from your existing current account.
Starling 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||Free up to £300 a day||Free up to £200 a month; 2% fee after that|
|Money transfers||£0.30 fixed fee (can vary according to the currency) + 0.4%||£0.65 fixed fee (can vary according to the currency) + currency conversion fee|
|Conversion rate||Mastercard exchange rate for card payments and ATM withdrawals; interbank exchange rate for money transfers||Interbank exchange rate|
|Visit Starling||Visit TransferWise|
So, which is cheaper for money transfers?
It isn’t easy to answer because it depends on the currency involved. Starling and TransferWise normally use the same exchange rate, but different pricing structures, so the best approach is heading to their respective websites and comparing fees for the countries you typically need to send money to.
Just to give you an idea: for euros, fees are pretty much the same; for US dollars, Starling is slightly cheaper; for Thai Bahts, TransferWise is cheaper.
As we said, it’s hard to compete with Starling when it comes to banking. The app and the current account are both great and you get pretty much all the features you could possibly think of, including deposit protection. Since using the card and withdrawing cash abroad is also free, Starling is cheaper than TransferWise for travelling overseas.
For these reasons, if you’re looking for a current account for travelling and doing the occasional money transfer, this decision is a no-brainer and Starling is your guy.
However, TransferWise offers some niche features that can also be useful. It’s a better match for you if:
- You need an Australian or a US account.
- You need to send money in a currency that Starling doesn’t cover or charges higher fees for.
- You just want a money transfer service, not another current account.
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