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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 Bank have emerged as prominent players. 

Key Takeaways

  • Monzo, known for its bright coral card, has gained popularity for its personal and business accounts.
  • Starling, adorned in a vertical teal card, offers a seamless banking experience to its unique, business, and joint account holders.
  • Basic accounts: Monzo and Starling offer standard current accounts with budgeting tools, fee-free spending abroad, and contactless payments.
  • ATM withdrawals: Monzo has a £400 every 30 days limit. Starling has a daily limit of £300.
  • Overdrafts: Both offer overdrafts, but Starling’s process might be considered simpler.
  • Monthly account fees: Neither charges a monthly fee for their basic accounts.
  • Regular interest rates: Starling offers a 3.25% AER, while Monzo provides a 4.10% AER (variable).

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 4.60% AER 3.25% AER / 3.19% Gross (variable) £5,000.
Monthly Fees Fee current accounts; £5 per month
for Monzo Plus
Overdrafts 15%, 25% and 35% EAR (variable) 15%, 25% and 35% EAR (variable)

📚Related: What is AER?

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.

Aspects that make challenger banks appealing:

  • Easy account setup
  • Fee transparency
  • Quick money transfers
  • Mobile app availability

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.

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Monzo vs Starling: Features and user experience

When comparing Monzo vs Starling, Monzo’s unique features certainly grab attention.

Monzo’s unique features and user experience

  • Monzo’s app design has been praised for being user-friendly. The digital bank offers real-time spending monitoring, providing instant notifications for each transaction.
  • Categorising spending lets you group spending money 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. 

  • Starling’s app design is sleek and easy to navigate, offering a delightful user experience. It offers instant notifications, ensuring you’re always up to date. 
  • Spending insights is one of Starling’s standout features. It provides a detailed breakdown of your spending into various categories. This helps you understand your habits and plan your finances accordingly.
  • The ‘Goals’ feature lets you allocate funds to specific savings targets, helping you to manage your finances better. 
  • Instant transactions also add to the overall excellent user experience.

Understanding Monzo and Starling’s business and personal accounts

Understanding Monzo and Starling’s business and personal accounts

Monzo’s accounts

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: Monzo’s current account is beloved for its budgeting tools and spending insights. 
  • Joint account: It lets you share accounts and get a pearlescent white debit card for your shared spending and saving. It offers 4.10% AER interest (variable).
  • Business account: The business accounts for registered companies and sole traders come with features like tax pot, integrated accounting, and more, ideal for managing finances seamlessly.

Starling Bank’s accounts

Starling Bank has equally diversified its offerings. 

  • Personal account: Offers instant notifications on transactions, spending insights, and goals features to help manage savings effectively.
  • Joint account: features budgeting tools, goals, and savings spaces akin to Monzo.
  • Business bank account: Offer the Starling Business account and an exclusive sole trader account, each with unique benefits. 

A business account has features like:

  • Categorised transactions
  • Integrated invoicing
  • Compatibility with popular accounting software. 

This makes it an excellent choice for current account customers looking to streamline their business finances.

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 are available from both banks. 

They 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 joint account

Monzo offers a joint account with payment cards that operate 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.

Starling joint account

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.

Saving options

Both Monzo and Starling Bank provide an array of saving account options. 

Monzo saving products

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 savings accounts.

📚Related: Current Account vs. Savings Account

Starling Bank saving products

Starling Bank also shines when it comes to saving money. 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.

Fixed Savers feature lets you deposit £2,000 and get a 4.48% fixed gross/annual equivalent rate (AER).

📚Read more: What is AER?

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Comparing Monzo and Starling’s ATM withdrawals

Free ATM withdrawals

One of the key selling points of both Monzo and Starling Bank is the convenience of free ATM withdrawals. 

Monzo ATM withdrawal limit: The fee-free cash withdrawal limit for the UK and EEA is £400 every 30 days. 3% for withdrawal the limit in 30 days. 

Starling Bank withdrawal limit: Strict daily limit of £300 fee-free cash withdrawals, regardless of currency. Up to 6 withdrawals per day.

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.

Foreign ATM withdrawals

When it comes to using your card abroad, both Monzo and Starling have solid offerings. 

Monzo international ATM withdrawal limits

  • Monzo: £200 free every 30 days (3% after)
  • Monzo Plus: £400 free every 30 days (3% after)
  • Monzo Premium: £600 free every 30 days (3% after)

Starling international ATM withdrawal limit: £300 a day.

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

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.

📚Related: What Should You Do Before You Withdraw Money From the ATM?

Exchange rates

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

📚Read more: How to Calculate the Exchange Rate?

Transfer fees and money transfers with Monzo and Starling

Transfer fees and money transfers with Monzo and Starling

A look at Monzo’s money transfer process and fees

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.

Fees

  • Direct debit: Free
  • Standing order: Free
  • Sending money within the UK: Free
  • International money transfer: From 0.43%, visit Wise for details.

Understanding Starling’s approach to money transfers

Domestic bank transfers with Starling Bank are also free and instant.

International transfers: For most countries, you can pay a fast SWIFT delivery charge or a cheaper local network payment. It is charged on top of an international transfer fee.

Fees

  • Direct debit: Free
  • Sending money within the UK: Free
  • International transfer fee: 0.4%
  • SWIFT transfer fee: £5.50
  • Low-cost local network payment: £0-0.90
  • CHAPS payments: £20 for each

📚Related: Wire Transfer vs Bank Transfers

Mobile payment support: Google Pay and Apple Pay

Mobile payment support is becoming increasingly crucial in today’s banking landscape, and both Monzo and Starling have risen to the challenge.

📚Related: The Pros and Cons of the Google Pay App, Pros and Cons of 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.

Security

Monzo has also demonstrated a commitment to user security, as evidenced by the bank’s mobile phone insurance offering. 

This paid extra covers 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

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.

Security

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

Software, city, app

Interest rates, monthly fees and overdrafts

Interest rates can significantly influence where to hold your money, especially for savings and current accounts. 

Regarding overdrafts, both banks offer structured and straightforward overdraft policies.

Interest rates

Monzo and Starling offer competitive rates, but slight differences are worth noting.

Monzo interest rates: 4.10% regular AER, 4.60% AER (variable) Plus & Premium.

Starling Bank interest rates: 3.25% AER / 3.19% Gross (variable) interest on balances up to £5,000 for personal and joint accounts.

Monthly fees 

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.

However, Monzo also offers paid account plans.

Overdraft policies

Monzo overdrafts

Monzo pays 19%, 29% or 39% EAR (variable) on overdrafts of up to £2000. 

The exact rate depends on your credit score, which you can check in your Monzo app. We’ll always inform you of the exact rate and cost before you borrow from us.

Starling overdrafts

We offer arranged overdrafts with EAR rates of 15%, 25%, and 35% (variable). It is based on various factors. 

A representative APR is 15% (variable), with an assumed credit limit of £1,200.

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

📚Related: What is Revolut Overdraft?

Note:

  • All information provided is dated 10 April 2024 and may have been updated since. Please check each platform’s official website for the latest information.

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

Both Monzo and Starling have revolutionised digital banking, but Starling slightly edges ahead in this comparison. It offers numerous advantages, especially for frequent travellers and small businesses, such as free foreign ATM withdrawals. 

With its award-winning app and smooth user experience, Starling stands out as the top choice. 

However, Monzo should not be dismissed. Its strong budgeting tools, higher interest rates, and user-friendly interface make it a formidable competitor. 

In addition, Monzo’s spending categorisation feature makes it an excellent choice for users seeking efficient financial management.

Nevertheless, 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.

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This option might appeal to those needing smooth and fast international financial services. Therefore, in this changing banking landscape, now is a great time to think about managing your finances digitally.

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Renata Pacheco

Renata is a seasoned financial market expert with over 30 years of experience in journalism and content creation, primarily focusing on the financial market. Throughout her extensive career, she has worked with leading financial institutions such as Citibank Brasil, Fiserv in Latin America, and other notable financial entities, further honing her expertise and credibility in the sector.

For more than six years, Renata has also been writing for the crypto market, collaborating with financial publications in Brazil, the US, and Europe. Her deep understanding and extensive knowledge make her a respected voice in the industry, appreciated for her ability to demystify complex financial concepts and market trends. This skill enables her to make financial insights accessible to a wide audience, from novice investors to seasoned professionals.

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Disclaimer

Please be advised that the information presented in this article is intended for general informational purposes only. It should not be construed as professional advice from swissmoney. It is important to note that swissmoney does not act as a financial adviser, and individuals are strongly encouraged to seek independent advice from qualified legal, financial, or accounting professionals before making any decisions related to cryptocurrency investments. Furthermore, investing in cryptocurrency assets carries inherent risks, and individuals should be aware that they may potentially lose all of their invested capital.
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