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Monzo vs Starling: Which App-based Bank is Superior?

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As we usher in a new era of digital banking, Monzo and Starling have emerged as prominent players. Monzo, known for its bright coral card, has gained popularity for its personal and business accounts.

On the other hand, Starling, adorned in a vertical teal card, offers a seamless banking experience to its unique, business, and joint account holders.

These two digital banks have risen from the crowd, embodying the ethos of a challenger bank by constantly redefining banking norms. Through their innovative solutions, they are slowly carving their place as some of the best banks in the UK.

Monzo vs Starling bank comparison

Features Monzo Starling
Personal Account
Business Account
Joint Account
Budgeting Tools
Spending Insights
Integrated Accounting
Free ATM Withdrawals
Free International Transfers
Mobile Payment Support
Interest Rates Up to 1.50% AER 0.05% AER
Monthly Fees
Overdrafts £500 with variable EAR 15% EAR (variable)

The rise of challenger banks in the UK

As the banking industry evolves, there’s an increasing shift towards challenger banks. These digital banks are giving high-street banks a run for their money, offering users unprecedented control and convenience. UK banks like Monzo and Starling are leading this wave.

Their appeal lies in the ease of account setup, fee transparency, quick money transfers, not to mention the allure of managing finances from the comfort of your mobile device.

With digital banking rapidly gaining traction, it’s clear that Monzo and Starling are more than just fleeting trends. They represent a severe evolution of the banking industry, and it’s time we look closely at what they bring to the table.

Understanding Monzo and Starling’s business and personal accounts

A deep dive into Monzo’s account offerings

Since its inception, Monzo has focused on making banking accessible, transparent, and in sync with the digital age. This has resulted in a range of account options to cater to the diverse needs of its customers. The Monzo account comes in a few varieties: personal account, business account, and joint account.

Monzo’s personal current account is beloved for its budgeting tools and spending insights. It’s not just a bank account; it’s a financial health hub, alerting you on spending habits and helping you save money.

For those interested in setting up their business with Monzo, they offer accounts both for registered companies and sole traders. The business account comes with features like tax pot, integrated accounting, and more, ideal for managing finances seamlessly.

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Exploring Starling bank’s account varieties

Starling Bank, on the other hand, has equally diversified its offerings. The personal Starling account, similar to Monzo, offers instant notifications on transactions, spending insights, and goals features to help manage savings effectively.

Starling’s business bank account has also been recognised as one of the best for small businesses and sole traders. They offer the Starling Business account and an exclusive sole trader account, each with unique benefits.

These account has features like categorised transactions, integrated invoicing, and compatibility with popular accounting software. This makes it an excellent choice for current account customers looking to streamline their business finances.

Furthermore, Starling also offers joint and personal accounts, each featuring budgeting tools, goals, and savings spaces akin to Monzo.

Examining joint accounts and savings accounts

The benefits of joint accounts with Monzo and Starling

In the Monzo vs Starling debate, the offerings of these accounts cannot be ignored. These accounts, available from both banks, are designed to provide couples or cohabitants with an easy way to manage shared expenses. Whether splitting rent or sharing household bills, a joint account can simplify these processes.

Monzo offers a joint account that operates like its current account, providing real-time notifications for all transactions, spending categories, and budgeting tools. This approach keeps both account holders up to speed on the account’s activity and balances. It essentially promotes financial transparency between users.

Similarly, Starling’s joint account mirrors the features of its standard UK current account. It comes with personalised cards for each user, real-time payment notifications, spending insights, and a shared spaces feature for saving together. The convenience offered by these features truly stands out when managing shared expenses.

Savings account options with Monzo and Starling

Both Monzo and Starling bank provide an array of saving account options. Monzo offers ‘Pots’, allowing you to put aside money for specific goals or expenses. Additionally, Monzo has partnered with various providers to offer interest-paying saving accounts.

Starling Bank also shines when it comes to savings accounts. It offers the ‘Spaces’ feature, similar to Monzo’s ‘Pots’. You can set up different spaces for different savings goals, making it easy to manage your money.

Furthermore, Starling also offers an interest rate on its current account balances, doubling as a savings account and rewarding customers for their loyalty.

Monzo vs Starling: Features and user experience

Monzo’s unique features and user experience

When comparing Monzo vs Starling, Monzo’s unique features certainly grab attention. Monzo’s intuitive and engaging app design has been praised for being user-friendly. The digital bank offers a real-time view of your spending, providing instant notifications for each transaction.

Monzo goes further by categorising your spending into sections like groceries, transport, or bills, allowing you to track your spending habits.

Budgeting is also a breeze with Monzo, as you can set monthly budgets for each spending category and get notified if you’re spending too fast. Instant transactions are another plus, as you can quickly transfer money to other Monzo users.

Starling bank’s standout features and user Experience

Starling Bank, as a challenger bank and the Best British Bank award winner, also comes with its unique set of features. Like Monzo, Starling offers instant notifications, ensuring you’re always up to date with your account activity.

One of Starling’s standout features is its spending insights, providing a detailed breakdown of your spending into various categories. This helps you understand your habits and plan your finances accordingly.

Starling’s app design is sleek and easy to navigate, offering a delightful user experience. The app has a feature called ‘Goals’, which, like Monzo’s ‘Pots’, lets you allocate funds to specific savings targets, helping you to manage your finances better. Starling’s instant transactions also add to the overall excellent user experience.

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Comparing Monzo and Starling’s ATM withdrawals

Free ATM withdrawals: A key benefit of both Monzo and Starling

One of the key selling points of both Monzo and Starling bank is the convenience of free ATM withdrawals. This aspect of their service is particularly beneficial for customers who require regular access to cash.

It’s one of the ways these challenger banks compete with traditional high street banks by offering fee-free spending and free cash withdrawals.

Monzo and Starling facilitate cash deposits at local post offices, allowing customers to quickly and easily deposit cash abroad and at home.

Understanding foreign ATM withdrawals with Monzo and Starling bank

When it comes to using your card abroad, both Monzo and Starling have solid offerings. Monzo allows free foreign ATM withdrawals up to £200 every 30 days, after which a 3% charge applies.

On the other hand, Starling stands out as it offers unlimited free foreign ATM withdrawals, giving it a distinct edge for customers who frequently travel overseas.

The exchange rates applied are competitive, utilising the Mastercard exchange rate, making spending abroad more transparent and predictable.

This comparison reveals that while both challenger banks offer significant benefits over traditional banks regarding ATM withdrawals, Starling may have the upper hand for frequent travellers.

Transfer fees and money transfers with Monzo and Starling

A look at Monzo’s money transfer process and fees

Regarding money transfers, Monzo has established a straightforward and user-friendly process.

Domestic bank transfers with Monzo are free, instant, and can be performed 24/7. This applies whether you transfer money to another Monzo account or an account with a different bank.

International money transfers with Monzo are facilitated through a partnership with Wise, allowing for a seamless user experience, although transfer fees apply.

The fees are transparent, generally based on the amount transferred and the country to which the money is being sent. Despite these fees, Monzo’s integration with Wise ensures competitive rates and speedy international transfers.

Understanding Starling’s approach to money transfers

Starling Bank follows a similar approach to domestic money transfers as Monzo, offering free, instant bank transfers.

Unique to Starling, however, is their provision of free international money transfers to many countries. This includes the Eurozone, making it an attractive option for those who frequently transfer money abroad.

Starling’s transfer fees for countries outside its free transfer zone are laid out clearly in its fee schedule. The rates are competitive compared to high street banks, and transfers are processed swiftly and securely.

Both banks offer intuitive money transfer options, but Starling’s free international transfers to select locations give it an edge over Monzo for customers regularly sending money abroad.

Mobile payment support: Google Pay and Apple Pay

How Monzo supports Google Pay and Apple Pay

Monzo has long been a trailblazer in the world of digital banking, particularly when it comes to mobile payments. Google and Apple support is integrated seamlessly into the Monzo banking experience, allowing users to make secure, instant payments straight from their smartphones.

Setting up Google Pay or Apple Pay with your Monzo account is a straightforward process that can be completed within the app in minutes.

Monzo has also demonstrated a commitment to user security, as evidenced by the bank’s mobile phone insurance offering. This paid extra provides cover for loss, theft, accidental damage, and more, providing peace of mind for those who heavily rely on their mobile devices for banking.

Starling bank’s support for Google Pay and Apple Pay

Similarly, Starling Bank offers full support for both Google Pay and Apple Pay, reflecting the bank’s modern, user-centric approach. The seamless integration enables customers to pay quickly and easily using their mobile devices.

As with Monzo, setting up mobile payments with Starling is quick and easy, allowing customers to make mobile payments almost immediately after opening an account.

While Starling Bank does not currently offer mobile phone insurance as part of their banking package, their robust security measures help to ensure that your banking information remains secure even if your phone falls into the wrong hands.

Mobile payment support is becoming increasingly crucial in today’s banking landscape, and both Monzo and Starling have risen to the challenge, offering easy, secure mobile payment options for their customers.

Interest rates, monthly fees and overdrafts

Interest rates for Monzo and Starling accounts

Interest rates can significantly influence where to hold your money, especially for savings and current accounts. Monzo and Starling offer competitive rates, but slight differences are worth noting.

As of this writing, Monzo pays up to 1.50% AER on Monzo Premium accounts on a balance of up to £2000, which can boost your savings over time.

On the other hand, Starling Bank offers 0.05% AER on balances up to £85,000. This rate might not seem as high as Monzo’s, but keep in mind that interest rates fluctuate and are subject to change based on the economic environment and the banks’ policies.

Monthly fees and overdraft policies for Monzo and Starling

In terms of monthly fees, both Monzo and Starling stand out with their fee-free current accounts, a notable difference from traditional high street banks. This fee-free approach extends to many of their services, making both banks appealing options for cost-conscious consumers.

Regarding overdrafts, both banks offer structured and straightforward overdraft policies. Monzo provides a £500 overdraft with a 19%, 29% or 39% EAR (variable). Starling Bank charges a 15% EAR variable on arranged overdrafts, but your eligibility will be based on a credit check.

It’s important to weigh these factors when comparing Monzo and Starling, considering your financial needs, habits, and future goals.

Starling emerges as the winner: Our final verdict and other alternatives

While both Monzo and Starling have transformed the digital banking landscape with their comprehensive suite of features and services, Starling comes out slightly ahead in this comparison.

It offers many benefits, particularly for frequent travellers and small businesses, with its free international money transfers and unlimited foreign ATM withdrawals. This, combined with an award-winning app and seamless user experience, cements its place as the frontrunner.

However, Monzo shouldn’t be overlooked. With its robust budgeting tools and excellent customer interface, it provides formidable competition. Furthermore, Monzo’s ability to categorize spending makes it a standout option for users looking to manage their finances efficiently.

That said, both these challenger banks still have a lot to offer and can cater to different financial needs. For those seeking alternatives to Monzo and Starling, swissmoney provides a unique range of financial services.

As a global financial platform, swissmoney enables seamless access to trading, financial and wealth management services, all from a single account.

This alternative could be particularly attractive to those requiring a wider range of international financial services. Thus, in this evolving banking environment, there’s never been a better time to consider going digital with your finances.

Renata Pacheco

Renata is a versatile and experienced professional. As a specialist in niche markets like wine, financial, B2B, iGaming, crypto, and trade forex, she navigates and excels in these specialized sectors, becoming an invaluable resource for valuable knowledge.

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