Home / Banking / Starling Bank vs Monzo – Best UK Challenger Bank?

Starling Bank vs Monzo – Best UK Challenger Bank?

Starling Bank vs Monzo

Table of Contents


At a Glance

MonzoStarling
Monthly CostFree | £5 | £15Free
ATM Withdrawals-UKFree (if use Monzo as main account)Free
ATM Withdrawals-AbroadFree up to £200, then 3%Free
Debit CardChoice of colours, metal on paid tierTeal card, vertical design
Interest1% up to £2000 on Plus, 1.5% on Premium0.05% on balances up to £85,000
Cash DepositsPayPoint locations, £1 per depositPost Office, £1000/year free, then 0.7%
Cheque DepositsOnly by postScan via the app
Money ManagementPots, Saving Pots, CategoriesSpaces, Spending Insights
FSCS ProtectionYesYes
Instant NotificationsYesYes
Customer ServicesIn-app, telephone, emailIn-app, telephone, email
Mobile PaymentsApple Pay, Google PayApple Pay, Google Pay, Samsung Pay
Currency TransfersUse Wise as transfer partner0.4% charge
ExtrasExtensive on paid tiersnone
Business AccountYesYes
Child AccountYesYes

About Starling Bank

As one of the first financial technology companies in the UK to launch as a challenger bank, Starling Bank have succeeded in their aim to take customers away from the traditional high street banks, claiming over 2 million accounts have been opened with them in the UK. They have a higher average monthly customer balance than any of their rivals, which suggests that people are trusting them as their sole main bank account.

About Monzo

Monzo are a relatively new startup bank that aims to provide a more modern and efficient service than the traditional banks. They are a fully licensed UK bank and are regulated by the Financial Conduct Authority. They have a smartphone app focused product. All banking is done via the app and they don’t have branches. The app is easy to use and award winning.


Plans, Costs & Fees

Monzo

Monzo have 3 different plans:

  • Monzo Free – Free
  • Monzo Plus – £5 per month
  • Monzo Premium –  £15 per month.

The basic banking features are mostly available on the free tier, and the paid plans include various extras that you may or may not want, but are not crucial to running your bank account.

Cash withdrawals at ATMs are free up to £250 per month, but above that, Monzo charge 3% of the amount taken out for customers not on the monthly paid plans.

As Monzo is an app based bank, they do not have branches, so cash has to be paid into your account via PayPoint. It costs £1 per transaction.

Starling Bank

In keeping with their ‘keep it simple’ ethos, Starling Bank only have one account tier, and that is free. They do not have any paid monthly plans, and all of the account features are available to all customers.

Cash withdrawals at ATMs are free with Starling Bank.

Starling Bank has no branches so cash must be paid in via the Post Office. There is no cost for this.

Verdict

If we compare the Free plans, then Starling Bank offers slightly more than the equivalent Monzo Free plan, plus there is no limit on free UK ATM withdrawals and cash deposits are free. However, if you do want to get some of the extras on offer such as metal cards and insurances, then you can pay a little extra with Monzo to get these, whereas you don’t have that option with Starling Bank. So, we are calling this one a tie.


Features

Monzo

  • 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

Starling Bank

  • Easy to use smartphone app – bank on the go, 24/7.
  • Instant Notifications – get informed of any activity on your account immediately
  • Spaces – Spaces are ‘virtual piggy banks’ within your Starling Bank account, where you can split your money into different areas i.e. bills, saving etc.
  • Categorised Spending Insights – Within the app you can analyse your spending via categories to allow you to manage your money more efficiently.
  • Starling Bank Marketplace – Starling Bank recommend other financial services – such as insurance, mortgages, pensions and more.
  • Free ATM Withdrawals – Starling Bank offer free ATM withdrawals in the UK and within Europe and do not have limits on the free amounts you can take out.
  • Savings Goals – easily set up within the app
  • Mastercard Debit Card – with full contactless functionality
  • Freeze your debit card – instantly stop the card via the app if it is lost or stolen.
  • Interest on your current account balance – 0.05% on balances up to £85,000.
  • Pay in cash via Post Office branches – up to £1000 per year free.

Verdict

The features of Starling Bank and Monzo are pretty close in relation to core banking functions. They also have money management tools that help to save and keep track of your money that are broadly similar. Each has a few features the other does not, but really this one is too close to call.


Debit Cards

Monzo

All Monzo account holders get a Mastercard debit card, with full contactless functionality and enabled for Apple Pay and Google Pay. They are available in 7 different colours, including their neon editions in Hot Coral, Disco Pink, Juicy Green and Sunshine Yellow. Subscribers to their £15 per month Premium tier get a metal debit card.

Monzo’s elegant Metal debit card

Starling Bank

Starling Bank customers get a Mastercard debit card, with full contactless functionality and enabled for Apple Pay, Google Pay and Samsung Pay. The personal account card is a blue/green teal colour, while the business card is black. Both have a vertical design.

Starling bank teal and black debit card with clean mobile interface
Starling bank teal and black debit card with clean mobile interface

Safety

Are digital challenger banks safe?

Some customers may be concerned that, as new digital challenger banks are newer companies, that their money would be less safe than with a long established bank such as Lloyds, Barclays, HSBC etc. However, both Starling and Monzo are fully licensed UK banks, and as such, they are regulated by the Financial Conduct Authority (FCA) and customer deposits are covered up to £85,000 per customer under the Financial Services Compensation Scheme, in case of the bank’s insolvency. This level of protection is exactly the same as with the larger, more established banks.

Monzo

  • Monzo is a fully licensed UK bank, and therefore all customer deposits are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per customer.
  • As an app based bank, Monzo have ways to make their account highly secure, as the account is tied to the customers mobile phone.
  • Customers can freeze or unfreeze their Monzo card easily and instantly via the app.
  • Monzo are a fairly recent startup, having launched initially in 2017. As such they are not yet a profitable business, and the amount of money they have been losing each year has increased, and they reported losses in 2020 and 2021. Whilst this does not mean that Monzo will go out of business, it is possible. And whilst customer deposits are protected, it would still mean significant disruption for customers.

Starling Bank

  • Starling is a fully licensed UK bank, and therefore all customer deposits are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per customer.
  • Starling is an app based bank and as such security can be made secure by utilising various functions such as SMS confirmations.
  • You can freeze or unfreeze your debit card easily and instantly via the app.
  • As of 2021, Starling Bank have announced that they are profitable, so customers can be confident that they will be around for the time being.

Verdict

It’s a close call, as both Monzo and Starling have highly secure banking products. However, Starling have now achieved profitability, whilst Monzo continue to lose money within a highly competitive marketplace. Therefore, due to this, we give Starling the edge.

Business Banking

Monzo

The Monzo business account is available in 2 tiers – Lite, which is free, and Pro, which is £5 per month. Notable Monzo features:

  • Tax Pots – separate funds for tax
  • Integrate your accounting software
  • Multi-User Access – give employees account access
  • Invoicing – generate invoices directly from your Monzo account.
  • Mobile & Web Access – smartphone or computer
  • Currency Transfers via Wise – take advantage of the better rates

Read our full Monzo Business Review

Starling Bank

Whilst the basic Starling Bank Business account is free, for £7 per month you can sign up for the Business Toolkit – which contains the following features:

  • Instant Invoices – sent directly from the app
  • Automated Expenses – separate your expenses into categories
  • Tax Estimates – the app analyses your account and estimates the taxes due
  • Record & Submit VAT – get a running total of the VAT position.
  • Bills Sorter – upload bills and schedule payments.
  • Accounting Software Integration – Xero, Quickbooks and more
  • Business Spending Insights – account analytics
  • Business Spaces – categorise your funds

Read our full Starling Bank Business Review

Travelling

Monzo

  • Paying with your debit card whilst outside the UK is free.
  • You can withdraw up to £250 every 30 days within the European Economic Area (EEA), and up to £200 every 30 days in other countries. When you take cash out above these limits you will be charged a fee of 3%
  • Monzo partner with Wise, a popular currency conversion provider, to make their currency transfers. The currency transfer is made at interbank rate, with a small fee added to each transfer, which depends on which currencies you are transferring between.

Starling Bank

  • Paying with your debit card whilst you are abroad is free.
  • Starling Bank offer free ATM withdrawals with no maximum limit whilst you are abroad.
  • Starling Bank offer transfers to different currencies at the interbank rate, with a charge of 0.4% of the amount converted.

Verdict

Once again the offerings are very similar. It is likely that with Monzo you may get a better deal on currency transfers as they partner with Wise. However, with Starling, the fees are more transparent. Plus, Starling offer unlimited free international ATM withdrawals. Therefore in this category, Starling Bank are the travellers friend.

Child accounts

Both Monzo and Starling Bank require account holders to be over 18. However, they both offer solutions for customers younger than that.

Starling Bank – Kite

Starling Bank Kite - the debit card for your child
Starling Bank Kite – the debit card for your child

Starling’s Kite product is essentially an add-on to a normal Starling Bank account, where you can get a card for a child, that is fully controlled by the main account. The extra card is charged at £2 per month, and allows a full range of backing and payment activities, with full visibility for the adult.

Monzo for 16-17 year olds

Monzo have taken a different route, with their 16-17 year old account being a full Monzo account, with certain functionalities, such as spending on certain things like gambling. The 16-17 year old account is available on the free Monzo tier.

Mobile App

In 2022 Monzo won ‘Best Banking App’ in the British Bank Awards. And for good reason – customers seem very happy with how easy to use and intuitive their app is.

Starling Bank does also have a very well received app, which has also won awards – indeed – they won the same award as Monzo in 2021!

Extras

Monzo

Monzo have various monthly paid plans, and as such they have added many extras into their offering. Things such as a nice metal debit card, phone insurance, travel insurance and access to airport lounges all come with your account. However, bear in mind that these will only be available via the paid plans.

Monzo worldwide travel insurance and metal debit card
Monzo worldwide travel insurance and metal debit card

Starling Bank

Starling Bank do pride themselves on their simplicity, and as such, they don’t have much in the way of extras. They do have the Starling Marketplace, where customers can find third party products from various financial providers. However, these are not Starling Bank products, but rather recommendations, so cannot be counted as part of the Starling product.

Verdict

Monzo takes this one, as they have a wide variety of extras available. However, be prepared to pay a monthly fee if you want to be able to use them!

Monzo vs Starling Bank – FAQ

Is Monzo the best bank in the UK?

Monzo are definitely in the conversation about which is the best bank in the UK – and they were crowned the Best British Bank in the 2022 British Bank Awards.

Why is Starling Bank better?

Whilst Monzo has many advantages, many people see that Starling Bank has the edge, as they offer all of the account features for free, whilst with Monzo you need to pay a monthly fee to access many of their attractive features.

Verdict

This is a real battle of the UK’s digital banking giants, as both Monzo and Starling Bank have picked up millions of customers in the last few years. It is easy to see why, as both banks have created a very good product that provides a host of features that would fit most people’s banking needs. Starling Bank do appear to be drawing slightly ahead, by becoming profitable, and seeing more customers than Monzo using them as their main bank account. Starling Bank’s offer is very much based around value, with most services being free, whilst with Monzo, you can get more features, but you will need to pay. For that that reason, we would choose Starling Bank, but there are clearly still many reasons why Monzo could be your choice.