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Wise vs Monzo: Comparing Fees, Exchange Rates & Speed

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Sometimes you have to choose where to keep your money and what to choose to make your money transfers scalable and inexpensive.

In this blog post, we’ll look at two choices: Monzo and Wise. You’ll learn the basic principles and differences between the two, and ultimately you’ll be able to assess which is the better choice for you.

Wise vs Monzo: an overview

Wise

Many may recognise Wise from its former name, TransferWise. Wise is considered an e-money institution.

Wise has been in operation since 2011, and its main virtue has been to offer fast and fair international money transfers. The idea for the wise app came from the company’s founders, who were frustrated by high fees and unfavourable exchange rates. They wanted to offer an alternative way of making bank transfers and avoiding traditional banks.

More than 10 million users worldwide now use Wise. Wise has gained popularity thanks to its global market rates and customer-friendly but transparent currency conversion and money transfer fees.

Wise’s main focus is on international money transfers. In addition, customers can find even seemingly unfamiliar currencies. Moreover, Wise provides various business banking solutions for small and medium-sized enterprises (SMEs).

Wise vs Monzo

Monzo

Monzo is a UK digital bank, operating since 2015. It is online only and based on a mobile Monzo app that challenges traditional banks. With this Monzo app, customers have a more convenient, faster, and fundamentally better banking experience than they would at a traditional bank.

Although it was initially just a financial services provider, Monzo is a fully licensed bank approved by the Financial Conduct Authority (FCA) today. As a bank, Monzo can offer overdrafts and customer deposits of up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).

The main objective of both Monzo and Wise is to provide a service with simplicity, cost-effectiveness, and international capabilities. In addition, in 2018, they are working together to provide their customers with a low-cost and convenient way to make international money transfers.

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Wise vs Monzo: Bank account types

Monzo and Wise offer different types of bank accounts, which are free or have monthly fees. Check them out below.

Monzo account types

Current account

Monzo has a standard current account. It is mainly for day-to-day banking needs. By choosing such an account, you will have access to different features such as instant messaging, expense categorisation and fee-free spending abroad.

When you open a current account, you’ll also get a contactless debit card and access to the Monzo mobile app. These features will make banking on the move easier.

Plus account

The Monzo Plus account is the superior version of the current account. This account category offers additional features and benefits.

Monzo Plus bank account users can get a higher (4.60% AER) interest rate on Instant Access Savings Pots and an Instant Access Cash ISA, discounts on selected brands, virtual cards for secure online transactions, and £400 fee-free monthly withdrawals abroad.

However, the Plus Account is not free. If you choose it as your primary bank account, you will have to pay a £5 monthly fee.

Premium account

The Monzo Premium Account offers customers enhanced benefits, rewards, and exclusive interest rates.

It includes all the benefits of the Plus account but with additional services. These include phone and travel insurance, access to airport lounges and the ability to withdraw £600 without fees.

However, the Premium account’s monthly fee is higher than the Plus account – £15 per month.

Business accounts

One of Monzo’s accounts is the account for businesses, freelancers, and sole traders. Monzo Business Account provides various automated accounting tools, like setting a percentage of your income aside for taxes, and 1.60% AER interest (variable) paid monthly with no minimum deposit.

The app allows you to raise invoices, track expenses, and calculate taxes. You can also integrate it with accounting software. This functionality allows you to easily share financial data with your accountants.

However, full-feature scope business accounts are only available on Monzo Business Pro for £5 a month.

Joint accounts

Another type of Monzo account is the joint one. It lets you share your money with a partner, spouse or even housemates. The account has debit cards for shared spending.

The account has a 4.10% AER interest on combined savings with an Instant Access Savings Pot.

16-17 year olds accounts

This is a minimalistic version of the regular account for people under 18. The main change is that the user can’t spend on certain activities that are illegal for those under 18, such as gambling.

The account includes a contactless debit card and a complete UK current account with an account number and sort code, allowing you to send and receive money, and set up Direct Debits and standing orders

Exchange rates

Wise account types

Wise borderless / Multi-currency accounts

The Wise Borderless Account is a multi-currency account. By choosing this type of account, clients can hold and manage money in more than 40 currencies.

This plan also allows you to send money and receive international money transfers, convert currencies at rates that suit your needs and hold money in different currencies in the same account.

If you are under 200 EUR, you will not have to pay for this service. However, if you want to keep more money in your account, you will be charged a monthly fee of 1.75% of the amount held and a 0.50 EUR fee per withdrawal.

In addition, customers with multi-currency accounts account can track the money as it is sent or received. You can easily change currencies and use your debit card for expenses.

One of the drawbacks of a Wise multi-currency account is that it does not provide cashback and overdraft facilities. According to Wise, personal account users can carry out direct debit transactions in different currencies.

People who need to move money globally usually choose this Wise account.

Wise business account

The Wise Business Account is tailored specifically for businesses and provides a comprehensive range of banking features. It offers international payments, multi-currency account capabilities, local bank details for receiving payments, and expense management tools. This Wise account simplifies the international money transfer process and helps businesses save on currency conversion fees.

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Wise vs Monzo: Fees and exchange rates

International money transfers

Monzo and Wise are very different when it comes to international transfers.

On the one hand, Monzo is only available to UK customers. However, the mobile app lets you send money overseas. Being part of the SEPA area makes Monzo an easy way to transfer money across borders in Europe. For this reason, it is considered the easiest and most popular of the international money transfer options.

In contrast, Wise offers more and more extensive international transfer functions. Wise lets clients send and receive payments in multiple currencies and send money to 70+ countries. If the country or region isn’t on Wise’s list, you can still send money if your recipient’s account uses USD, EUR, or GBP.

However, the main difference between these financial service providers lies in the process of receiving international transfers. While Wise allows you to receive international transfers into your account for free, Monzo does incur fees for it.

However, in this case, the limitations also apply to Wise. Although this platform allows receiving international bank transfers, they must be in the same currency as the account balance chosen by the recipient.

ATM

ATM withdrawals

When it comes to international ATM fees, Wise is a better choice.

Wise offers 2 withdrawals of up to 200 EUR each month for free per account. It is a cost-effective option if you don’t have a high cash withdrawal need. However, above this amount, there is a 1.75% fee and a 0.5 EUR withdrawal fee.

In addition, you may have to pay a conversion fee. In which case? If the currency of the place where you withdraw money is not the same as the currency of your account.

As far as Monzo is concerned, the conditions for ATM withdrawals are slightly different. In the UK and the European Economic Area (EEA), regular Monzo account users can withdraw up to £250 per month for free at ATMs. There is a 3% fee for withdrawals above this limit.

Exchange rates

Monzo’s unique feature is that you don’t have to pay a fee when using your card abroad. Whatever payment you make, it will be at the Monzo mark-up over the Mastercard rate. For this reason, Monzo secures a competitive rate.

However, if Monzo customer wants to make international transfers, the fees are the same as Wise’s as it processes it.

Wise uses the mid-market exchange rate. These are competitive compared to the average exchange rate difference you can see in many banks.

Wise allows clients to save money while abroad. By storing the currency of the place where you are in a Wise multi-currency account, you can avoid bank transfer fees when using your Wise card. This feature allows you to spend money as if you were a resident. There are simply no extra fees for you.

One of the beneficial features of Wise is that they lock in the real exchange rate at the time a customer sets up the transfer. This feature allows you to protect yourself against frequent currency fluctuations. It allows you to make sure that the amount you transfer or convert remains the same.

In general, both financial service providers prioritise offering favourable exchange rates and transparent fees. In this way, they try to improve the customer experience when paying abroad or transferring money overseas.

Wise vs Monzo: Cards

Both financial service providers offer both virtual and physical debit cards. It provides customers with greater flexibility and convenience when making payments.

The major difference is that Monzo works with Mastercard and Wise either with the Visa or MasterCard network. However, with either debit card, you will be able to use popular payment methods: Google Pay, Apple Pay, and contactless payment.

Also, to ensure security and allow customers to manage their cards themselves, Monzo and Wise allow users to freeze and unfreeze their debit cards directly from their respective mobile apps. This feature is particularly relevant if your card is lost or stolen and you want to protect your money.

The payment with these cards is also a little different. You can pay with your Monzo card both in the UK and abroad without extra charges. Currencies are converted at the Mastercard exchange rate when you pay with your card abroad.

Meanwhile, Wise also offers free debit card payments in the UK and abroad. Unfortunately, if you do not have a local currency balance, you will have to pay currency conversion fees. The amount of this fee depends on the specific circumstances.

Wise vs Monzo: Speed

The speed with which money is transferred and received is often essential.

In the case of Monzo, you can make instant peer-to-peer transfers. It means you can quickly transfer money from one account to another. These transfers are made only between users of Monzo accounts.

However, with international money transfers, it is naive to expect high speed. In this case, it can take up to 3 working days for the funds to reach the recipient.

Wise’s conditions for local transfers are very similar. Wise online account holders in the same country can make instant money transfers. When it comes to international payments, the process usually takes up to 1 – 5 business days.

However, you can avoid delays by using a debit or credit card. You can pay quickly and conveniently, both online and on the spot. Nonetheless, it is crucial to remember that this payment method is often subject to higher fees.

Wise vs Monzo safety

Wise vs Monzo: Safety

The security of your funds is always crucial. That’s why Monzo and Wise take great care to ensure your funds are not at risk.

Monzo is a bank. This means it is subject to the FSCS. This means it is subject to the FSCS. Therefore, if you deposit up to £85,000 in your Monzo account, your money will be safe against loss.

Monzo also uses various security measures, such as sophisticated data encryption, two-factor authentication, and instant messaging to monitor transactions to ensure your security.

Also, with Monzo, you are safe when making payments online. When you pay online, you have to validate your payment using your Touch ID, Face ID, PIN, or fingerprint, and you can easily block or unblock your debit cards in the mobile app.

On the other hand, Wise is not a bank. It is an e-money institution. For this reason, the FSCS does not apply to it. But there is good news. Although Wise is not a licensed financial institution, it is regulated by the Financial Conduct Authority (FCA).

In addition, Wise has a dedicated team to fight fraud. Also, the platform offers instant notifications of card usage. Two-factor authentication is also available for greater security.

Thus, Wise is a trustworthy money transfer platform that cares about the safety of its customers. Unfortunately, it is not a licensed bank like Monzo.

Note:

  • All information provided is dated 16 April 2024 and may have been updated since. Please check each platform’s official website for the latest information.

FAQ:

Is Wise or Monzo better?

It is impossible to make a clear assessment of which financial services provider is better. It depends very much on individual banking needs.

Wise is well known by many for its competitive exchange rates. It also offers an exceptionally rich choice of currencies and low fees for international transfers.

These features make Wise a popular choice today when it comes to international money transfers and managing multi-currency accounts.

As for Monzo, it is worth highlighting the convenience of highly mobile banking. This mobile app and the online banking-focused bank have innovative features. It has budgeting tools and provides instant messaging. Monzo is a licensed bank with FSCS protection, thus it offers additional security.

Are Wise and Monzo connected?

Yes, Wise and Monzo are linked. The two voucher providers work together to make international money transfers cheaper for Monzo customers.

As a result of this partnership, Monzo customers can use Wise’s currency exchange services to send money abroad more cheaply.

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Živilė Šarkauskaitė

Živilė is a writer with a diverse background, having worked with tech start-ups and pioneering brands across various industries. Her profound interest in progress and innovation drives her to the field of Fintech, a realm that sparks her curiosity and inspires her to share insights with others.

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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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