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Monzo – In Brief
Monzo have made a big splash into the digital app based bank market in the UK. As a fully licensed bank UK bank, offering a current account, Mastercard debit card, money management tools, and a host of other extras on their paid monthly account tiers, they are worth considering for any customer wishing to switch to an online bank
Monzo Pros & Cons
- Easy to use app with many useful features.
- Pots and Notifications allow you to manage your money simply and effectively.
- The customer services, despite some complaints, are generally said to be excellent.
- It is a fully licensed UK bank, so your deposits are protected under the FSCS
- Automatic saving functions
- It is only available to UK users.
- Some customers have complained of frozen accounts that are hard to get re-opened.
- Monzo has no bank branches.
- If you pay a lot of cash into your account, Monzo is probably not the best option.
What is Monzo?
Monzo is one of the leading digital banks in the UK. They are a recent fintech startup that provides a more modern and efficient service than the traditional banks. It is a fully fledged bank (unlike some of its rivals), has a full UK banking license, and is regulated by the Financial Conduct Authority (FCA).
Monzo has a smartphone app focused model. This means that all of your interaction with the bank has to be done via their smartphone app, and they don’t have branches, or even a fully featured website where you can use your bank account. This focus does allow them to concentrate on their app, and it is very good – with great customer satisfaction and awards given for ease of use.
Easy to use smartphone app – bank wherever you are, around the clock.
Instant Notifications – get informed of any activity on your account immediately
Left To Spend Notifications – let the app track your spending and display the amount of money you have before your next salary
Spending Budgets – Easily set up budgets within your account for different areas i.e. groceries, entertainment or transport.
Monzo Pots – areas within your Monzo account, that allow you to split your money into different areas, for example bills, saving etc
Mastercard debit card – with full contactless functionality
Metal debit card – Available on the Premium tier
Apple Pay/Google Pay – set up your Monzo card to pay with your phone
Interest on your current account balance – 1% on Monzo Plus, 1.5% on Monzo Premium, up to a balance of £2000.
Salary Sorter – set your account to distribute your salary amongst your pots once it hits your account
Free UK ATM Withdrawals – on all paid Monzo tiers
Pay in cash via PayPoint locations – up to £1000 every 180 days for £1 per deposit
Insurances – available on the paid tiers
Overdrafts – available for qualifying customers
Loans – available for qualifying customers
International currency transfers – Monzo have partnered with Wise to provide
Monzo Flex – spread payments with Monzo’s own Buy Now Pay Later product
Who is Monzo for?
Monzo is only currently available for residents of the UK.
The Monzo account is entirely smartphone focused, so it would suit people who are very confident and happy to do their banking in that way, as there are no branches and you cannot do your banking via a computer. In addition, the various money management functions work best if most transactions are made via card, so if you deal with cash a lot then you may not be able to get the best use of the app.
Monzo have various extras that may appeal to a lot of customers, such as metal debit cards, insurances, airport lounge access and more, but you will need to join one of their monthly paid packages to access these.
Got a bad credit rating?
Good for travellers
Metal Debit Cards
Tired of carrying around lots of cards?
UK Banking Statistics
Monzo Costs & Fees
The 3 levels of account with Monzo have the following monthly costs:
- Monzo Basic – Free
- Monzo Plus – £5 per month, with a minimum 3 month contract
- Monzo Premium – £15 per month, with a minimum 6 month contract
In addition – there are various other costs for specific areas:
Paying In Cash: Users can pay cash into their Monzo account at Paypoint outlets across the UK. The cost is £1 per payment. You can only pay between £5 and £300 per transaction up to a maximum of £1000 every 180 days.
ATM Withdrawals Abroad: If you wish to withdraw more than your account limit whilst abroad (£200 per month for standard, £400 per month for Plus and £600 per month for Premium), then you will be charged a 3% fee.
For users who use Monzo as their main bank i.e. they pay their salary or equivalent into their Monzo account each month, then those are all of the costs. If you use Monzo as a secondary bank account, and pay in less than £500 on a monthly basis, then you will have to pay a charge of 3% of any cash withdrawals over £250 made in either the UK or abroad.
Is Monzo Safe?
Monzo is a fully fledged UK bank, and thus consumer funds are insured by the UK Financial Services Compensation Scheme (FSCS) up to the deposit protection limit of £85,000 per person.
Like many other Fintech startups, Monzo is not yet a profitable company as it is a startup. If the company did go out of business, your deposits would be safe, but it is worth looking into, and to assess whether you feel comfortable with this. You may feel more comfortable swapping the ease of use of the Monzo product, for the long standing reliability of an older, more established bank.
Monzo Customer Reviews
Monzo have a score of 4.4 out of 5 on Trustpilot from over 23,000 reviews. Many users are complementing their mobile app, its usability, and their customer services. They have 11% 1 star ‘Bad’ ratings on Trustpilot, with most of these reviewers complaining of accounts being frozen. Monzo state that this is due to their anti-fraud measures, but there are complaints from some users that this is mistaken, and that it can take many weeks before the accounts are unfrozen. Monzo claim that ‘95% of their decisions to freeze accounts are correct’.
Which is better – Monzo or Starling Bank?
|Pricing||From £5 to £15 Details||Free|
|ATM Withdrawals||Free in UK, 3% abroad if over limit||Free UK & Abroad|
|Safety/Security||Deposits protected under FSCS||Deposits protected under FSCS|
Which is better – Monzo or Revolut
|Pricing||From £5 to £15 Details||From free to £12.99 Details|
|ATM Withdrawals||Free in UK, 3% abroad if over limit||Free with limits Details|
|Safety/Security||Deposits protected under FSCS||Deposits NOT protected under FSCS|
|Extras||Many options||Many options Details|
Which is better – Monzo or Monese?
|Pricing||From £5 to £15 Details||From free to £14.95 Details|
|ATM Withdrawals||Free in UK, 3% abroad if over limit||£1.50 charge on Free and if above limits|
|Safety/Security||Deposits protected under FSCS||Deposits NOT protected under FSCS|
|Extras||Many options||GBP and EUR account|
Who owns Monzo?
Monzo is owned by a combination of the bank’s founders, employees, and investment funds that have funded the bank’s growth. In late 2021, Monzo had a funding based valuation of over $4 billion.
How to put cash into Monzo?
Monzo allow their customers to deposit cash into their account via any PayPoint outlet in the UK. They charge £1 per deposit (although Monzo Premium customers get 5 free deposits per month). Deposits must be between £5 and £300, and customers can deposit a maximum of £1000 every 180 days.
How to contact Monzo?
The easiest way to contact Monzo is via the in-app chat function. It is also possible to call Monzo customer services on 0800 802 1281.
How does Monzo make money?
Monzo makes money in a similar way to traditional banks, via interchange fees (when you use your Monzo card), overdraft fees, currency exchange fees etc. Monzo also have various paid tiers where they charge a fee each month, which is also a large source of revenue for them.
Is there a Monzo savings account?
Monzo do offer a way to save via their app. They have effectively created a savings marketplace, where you can choose from various savings providers. Simply create a savings Pot within your account, then choose which savings provider you wish to use.
What is Monzo Flex?
Monzo Flex is Monzo’s entry on to the Buy Now Pay Later (BNPL) market, that is currently dominated by companies such as Klarna and Clearpay. Similar to these other services, Monzo Flex allows you to spread the payments over 3 installments with no interest charged. They also give you the option of paying over 6 or 12 installments with interest charged at 19% APR.
Is Monzo the best bank in the UK?
Monzo is definitely one of the most popular digital banks in the UK, and are definitely part of any discussion around the best banks in the UK. It appears many people agree, as Monzo won the Best British Bank award at the British Bank Awards in 2022.
Monzo have gathered millions of customers over recent years by providing a simple and modern way to bank that clearly appeals to users. Their app is very simple and easy to use, and has many useful functions that allow you to easily manage your day to day finances. All in all Monzo would be a good choice of modern bank to use in the UK.