Monzo, N26, Revolut, or Starling Bank: Which UK Challenger Bank Is Right for You?

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Over the past few years, Britons have been showered with financial technology companies (fintechs) that want to replace the old guard. “Challenger banks” are startups that compete directly with established banks in the country. They aim to make financial dealings more convenient, mobile, hassle-free, and cost-efficient. For example, customers can open accounts using smartphone apps instead of visiting branches. Also, unlike traditional banks, their products and services are meant to accommodate new types of workers, including freelancers, remote workers, digital nomads, and global citizens.

MoneyThree challenger banks that should be on your radar are Monzo, N26, and Revolut. Let’s review what they offer individuals (as opposed to businesses) through their free and premium plans.

UK Challenger Banks

Monzo

Monzo is a bank for people who live on their smartphones. It’s for individuals who want to get things done in a click and who don’t see the need for branches or checkbooks. It’s focused on providing an all-in-one solution for your entire financial life. Its products/services include:

  • Current account
  • Individual Savings Account (ISA)
  • Insurance
  • Joint account
  • Money transfer
  • Overdraft

Unique features

  • Get instant push notifications on all transactions.
  • Set monthly budgets for spending on things like groceries and going out.
  • Withdraw up to £200 every 30 days for free (a 3 percent charge applies after that).
  • Avoid exchange rate markups when using your card to pay for purchases.
  • Divide your money into “pots” for different financial objectives.
  • Round up payments and save the difference automatically.
  • Set up and manage recurring payments.
  • More features are coming with the full release of Monzo Plus.

N26 (UK Website)

N26 provides mobile banking services. It offers current accounts, fixed accounts, and other banking services, letting customers manage and control their finances via smartphone.

  • Current account
  • Insurance
  • Money transfer
  • Overdraft

Unique features (depending on the card/plan):

  • Get instant push notifications on all transactions.
  • Avoid exchange rate markups when using your card to pay for purchases.
  • Disable and enable payments abroad, directly in the app.
  • Pay no fees on ATM withdrawals abroad, in any currency.
  • Get 10 “spaces” sub-accounts (alongside your main account) to save for your goals.
  • Download and print your account activity.

Revolut

Revolut is on a mission to build a frictionless platform to use and manage money around the world. It has developed a platform allowing users to transfer, exchange, and spend money with a multi-currency card that is accepted everywhere.

  • Cryptocurrency trading
  • Current account
  • Insurance
  • Money transfer

Unique features (depending on the card/plan):

  • Get instant push notifications on all transactions.
  • Set monthly budgets for spending on things like groceries and entertainment.
  • Round up payments and save the difference automatically.
  • Withdraw up to £200 each month for free (a 2 percent charge applies after that).
  • Use “vaults” for your saving goals.
  • Set up and manage recurring payments.
  • Buy Bitcoin, Litecoin, Ethereum, Bitcoin Cash, and XRP.
  • Get 0.1 percent cashback within Europe and 1 percent outside Europe on all card payments.

What about Starling Bank?

UK residents should also explore Starling Bank. It offers personal, joint, euro, and teen current accounts. Furthermore, it provides personal loans and overdraft protection. On the flip side, it doesn’t have insurance products, and money transfer results are not as good as Revolut and TransferWise (by a smidgen). Starling Bank is a good alternative for people with mostly domestic financial affairs.

Products: A Closer Look
  • Current Account

A current (checking) account is a bank account that allows you to access a range of everyday financial services such as making deposits and withdrawals, paying bills, and setting up recurring payments. A current account typically doesn’t attract interest but may receive if it maintains a minimum amount as set forth by the bank, for example, £25,000.

Monzo, N26, and Revolut offer UK current accounts. Revolut also includes a free Euro IBAN account. Separately, N26 offers bank accounts in many European countries, for example, Germany, France, Spain, and Italy.

  • Savings Account

A savings account is a bank account where you can store money you don’t need right away but have easy access to it. It typically earns a modest interest rate.

All three companies provide in-app saving mechanisms, but only Monzo offers an official savings account. Additionally, Monzo customers can open tax-free savings and joint accounts.

  • Overdraft

Monzo offers overdraft protection, N26 has announced it will, and Revolut doesn’t. For Monzo, you’ll be charged 50p every day your account is overdrawn by more than £20, up to a maximum cost of £15.50 a month.

  • International Money Transfer

Monzo and N26 facilitate money transfers through TransferWise. TransferWise is another topnotch UK fintech. It allows you to hold, manage, and convert money in multiple currencies at the best exchange rates possible, i.e., mid-market, interbank, spot, and “Google rates.” TransferWise charges 0.3 to 2 percent on most transactions, which is up to eight times cheaper than many banks. I’ve been using TransferWise since 2015.

Revolut also converts money at mid-market rates. Customers can send money for free up to £5,000 monthly (a 0.5 percent fee applies after that). A markup on weekends and certain currencies may apply as well. Revolut is one of two UK companies that offer free money transfers. The other is TransferGo.

  • Insurance

Travel insurance may cover medical bills, lost valuables, and unforeseen expenses. Contents insurance pays for damage to, or loss of, an individual’s possessions. Mobile phone insurance takes care of damage or loss.

All three companies offer travel insurance, but coverages differ. See the table below for what else they cover.

Comparison
MonzoN26RevolutStarlingTransferWise
UK current accountYesYesYesYesYes*
Euro current accountNoNoYesYesYes*
Savings accountYesNoNoNoNo
Joint accountYesNoNoYesNo
Personal loansNoNoNoYesNo
OverdraftYesComingNoYesNo
Money transferYesYesYesYesYes
Crypto tradingNoNoYesNoNo
Travel insuranceYesYesYesNoNo
Contents insuranceComingNoNoNoNo
Mobile insuranceComingNoYesNoNo

*TransferWise offers a “borderless” account, which is like a current account. Users can send, receive, spend, and withdraw money at the best exchange rates.

 

Final Word

Challenger banks aren’t reinventing the wheel, but they’re improving and simplifying how the wheel turns. They offer similar products, compared to traditional banks, but focus on expediency through mobile platforms. Secondly, they provide products and services for customers who entertain global opportunities and experiences. Finally, they go the extra mile to offer perks and discounts via partnerships with other companies.

Monzo, N26, Revolut, Starling Bank, and TransferWise are just a few of many fintechs that are making waves. They are raising the bar on efficiency, transparency, costs, and customer support, which make them viable candidates for your attention.

 

Chad Tennant

Chad is an online marketer, content creator, and advisor. His primary goals are to help businesses and individuals achieve growth and financial success. Learn more at digitalfodder.com/about

 
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