Starling vs Monzo

We take a closer look at two challenger banks making waves in digital finance: Starling and Monzo.

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In recent years the rise of “challenger banks” have changed the face of banking. These mobile-only banks, with no physical branches, have lured in increasing numbers of customers by making online banking far slicker and easier.

There are a number of reasons people are turning away from high street banks and towards mobile ones like Monzo and Starling. Both apps act more as personal finance assistants than as old-fashioned banks, giving you intelligent reports and insights into your spending habits.

On top of that, both of these digital banks offer fee-free spending abroad, visually appealing graphics and real-time spending notifications. So, there’s no waiting about for contactless payments to show up in your account.

Compare Starling and Monzo side by side

Starling BankMonzo
NameStarling BankMonzo
Fees and chargesFreeFree
Delivery speedBetween 3-5 working daysBetween 2-7 working days
PaymentsPay via bank transfer or using PayPal or Google NearbyPay via bank transfer or send instantly to other Monzo account
UK ATM withdrawals FreeFree
Spending insightsInsights lets you compare spending between different merchantsSpending tracker provides a breakown of how much you've spent and where
Categories10+ categories10+ categories, regularly updated
Direct debitsYes - future Direct Debits shown as alertsYes - future payments shown in homefeed
Top upVia bank transfer, standing order, or have salary paid inVia bank transfer, standing order, or have salary paid in
Freeze your cardYes: touch of a button in appYes: touch of a button in app
AlertsReal time notifications about any account activity. Starling alerts you if you have insufficient funds to cover direct debits.Monzo's Targets sends notifications to warn you if you're spending too fast. Dashboard changes from green to orange to red to indicate overspending.
Interest0.05% on up to £85,000Marketplace with 8 savings accounts both fixed rate and easy access, £500 minimum deposit.
Savings goalsCreate different spending goals and protect money from daily spendingMonzo pots let you put money aside, protected from your daily spending
VisualisationThe Pulse circle graph shows you how much you have spent each day in real time and on what.Monzo uses a monthly graph and a pie chart to show the trajectory of your money, and how it is broken down
Foreign ATM withdrawalsFree£200 free monthly
Foreign transactions feeNo feesNo fees
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Starling vs Monzo: opening an account

  1. For both, the application process takes less than 5 minutes and doesn’t require any paperwork.
  2. Download the app on your phone.
  3. Take a photo of some ID, and enter a name and address, and record a short verification video to prove your identity.
  4. With Starling, you can start paying for things straight away through Apple Pay and Google Pay. Or, wait 2 or 3 three business days before the card arrives. When it does, you can set up Samsung Pay, Garmin Pay and Fitbit pay too.
  5. Monzo: you’ll normally have to wait 2-7 days for the card to arrive. Lots of people get their card the next day. You can start tinkering with your account straight away. You can link Monzo to Apple Pay or Google Pay before your card arrives.

Which is the best for going abroad?

They’re very similar and great for travelling fee-free, but with one key difference: with Monzo, there’s a £200 limit on free cash withdrawals abroad – after which 3% is charged.

Starling’s ATM withdrawal limit is £300 a day, and this applies both at home or abroad. So, Starling might just be better for those looking for a bit of extra cash.

Other than this, they both offer the MasterCard exchange rate, and their options to temporarily freeze your card in your app could just be a life saver abroad.

Getting an overdraft

Starling and Monzo both offer overdrafts. With both, you can apply through the app and, after a “soft” credit check, you’ll be offered an overdraft limit. Taking out an overdraft is cheaper with Starling than with Monzo though.

Monzo’s new overdraft rates depend on your credit score and can be 19%, 29% or 39% EAR (Equivalent Annual Rate). Being £200 overdrawn for 14 days will cost you £1.34, £1.97 or £2.56 respectively.

Starling applies a percentage charge of 15% EAR instead, regardless of your credit score. If you are £200 overdrawn for 14 days, you will pay £1.08 in overdraft charges.

Monzo card on desk

App features

In terms of their app features, there’s not a whole lot to separate them. What you can do on their apps is largely the same:

  • Budgeting categories.Starling and Monzo automatically place your transactions into categories like groceries or eating out, which you set budgets for. The app reminds you if you’re close to overspending.
  • Spending insights.Their apps will give you weekly or monthly reports about which shops or categories you’re spending most on. Spending too much of Pret sandwiches? The app will feed you the numbers.
  • Saving. Monzo ‘Pots’ and Starling ‘Goals’ let you stash money away for particular goals. A holiday or Christmas present perhaps. Keeping the money out of sight but within reach could help you save.

Starling and Monzo interest rates

Unlike Monzo, Starling pays an interest on current account balances (0.05% on up to £85,000).

You can get a higher interest rate with Monzo if you open a separate savings account with one of its partners through the marketplace.

Check out Monzo’s savings accounts if this sounds like the option for you.

Money held in both banks are covered by the FSCS up to £85,000.

Other app integrations and products

Integrating your bank account with other apps and services is another major plus point of digital banking. Starling and Monzo offer good levels of integration through their “marketplaces”.

Both let you connect your card with Apple Pay and Google Pay, for instance. Both apps are now integrated with Yolt and Money Dashboard too, so you can access all of your bank and credit accounts in one place.

They’re both constantly developing their “marketplace”. Monzo’s focuses mainly on savings account and also offers an energy switching service; Starling’s features a few investment and insurance products.

Finally, Starling and Monzo offer personal loans, while Starling edges ahead offering euro accounts and fully-developed business accounts, all in-house.

The verdict

Both Monzo and Starling are great options if you want to open an account with a challenger bank. They offer streamlined apps with loads of cool features, can be set up quickly, let you spend fee-free overseas and are constantly expanding their feature range.

The Monzo app is more colourful and fun, but if you often travel abroad, Starling gets the upper hand because of its higher foreign ATM limit. All in all, it’s a really, really close call and you’ll probably have an excellent banking experience with either of them – so you could always try both and get a feel for both apps!

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2 Responses

  1. Default Gravatar
    FaheemApril 4, 2019

    Overall which bank is better Starling or Monzo?

    • Avatarfinder Customer Care
      JeniApril 5, 2019Staff

      Hi Faheem,

      Thank you for getting in touch with Finder.

      I’m afraid that we’re unable to provide feedback on your query as being better between the two of them depends on what you’re looking for a digital bank. I suggest that you go through the comparison table on this page and check some forums or reviews on these products to help you choose which to go with and which suits you most.

      I hope this helps.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

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