N26, Revolut, Monzo, or Starling Bank?

 

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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 a 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.

Four challenger banks that should be on your radar are Monzo, N26, Revolut, and Starling Bank. Let’s review what they offer through their free and premium plans.

U.K. 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 checks. It’s focused on providing an all-in-one solution for your entire financial life. Its products/services include:

  • Individual Savings Account (ISA)
  • Insurance
  • Joint accounts
  • Money transfer services
  • Overdraft
  • Personal loan
  • Teen accounts
  • UK current accounts

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).
  • Pay zero forex fees when spending abroad or in a foreign currency.
  • Divide your money into “Pots” for different financial objectives.
  • Round up payments and save the difference automatically.
  • Get paid a day early by confirming your salary.
  • Set up and manage recurring payments.
  • Switch your energy service to lower your bills.
  • Get even more features are available with Monzo Plus.
  • Lock/unlock your card if lost or stolen.

N26 (U.K. 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.

  • Insurance
  • Money transfer services
  • Overdraft
  • UK current accounts

Features (depending on the card/plan):

  • Get instant push notifications on all transactions.
  • Pay zero forex fees when spending abroad or in a foreign currency.
  • 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.
  • Connect to Apple Pay and Google Pay to make fast and secure payments.
  • Gain access to 1,000+ airport lounges worldwide with LoungeKey.
  • Get exclusive partner offers
  • Lock/unlock your card if lost or stolen.

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.

  • Commission-free stock trading
  • Commission-free cryptocurrency trading
  • Insurance
  • Money transfer services
  • UK and Euro current accounts

Features (depending on the card/plan):

  • Get instant push notifications on all transactions.
  • View, export, and automatically categorize all your purchases.
  • Pay zero forex fees when spending abroad or in a foreign currency.
  • Set monthly budgets for spending on things like groceries and entertainment.
  • Round up payments and save the difference automatically.
  • Round up payments and donate to charities.
  • Withdraw up to £600 each month for free (a 2 percent charge applies after that).
  • Use “Vaults” for your saving goals.
  • Set up and manage recurring payments.
  • Get 100 commission-free stock trades per month.
  • Buy, sell, and hold cryptocurrencies, including Bitcoin, Litecoin, Ethereum, Bitcoin Cash, and XRP.
  • Get 0.1 percent cashback within Europe and 1 percent outside Europe on all card payments with Revolut Perks.
  • Get delayed baggage and flight insurance.
  • Gain access to 1,000+ airport lounges worldwide with LoungeKey.
  • Connect to Apple Pay to make fast and secure payments.
  • Lock/unlock your card if lost or stolen.

Starling Bank

Starling Bank is a U.K. mobile-only bank offering personal, joint and business accounts. Its app helps people take the stress out of money by letting them visualize and manage their finances in real-time, all from one app.

  • Joint accounts
  • Money transfer services
  • Overdraft
  • Personal loan
  • Teen accounts
  • UK and Euro current accounts

Features

  • Get instant push notifications on all transactions.
  • Use “Goals” for your saving objectives.
  • View spending insights for a sneak peek into the inner workings of your financial life.
  • Pay zero fees for ATM withdrawals or transactions overseas.
  • Send money to other Starling customers.
  • Get paid back easily or split the bill with “settle up.”
  • Control what your card can and can’t do.
  • Lock/unlock your card if lost or stolen.
Revenue Models

Since challenger banks differ from traditional banks, you might be wondering how Monzo, N26, Revolut, and Starling make money.

Monzo makes money from overdraft, personal loan, and withdrawal fees. It shares revenues or collects fees through third-party product and service arrangements, for example, offering money transfer services through TransferWise. Click here for Monzo’s fees.

N26 makes money through plan subscription, overdraft, and withdrawal fees. It shares revenues or collects fees through third-party product and service arrangements, for instance, offering money transfer services through TransferWise. It makes money from card replacements and emergency card advances (ECA). Click here for N26’s fees.

Revolut makes money through plan subscription fees and insurance premiums. It shares revenues or collects fees through third-party product and service arrangements; for example, customers can earn cash rewards through purchases at select partners (Revolut Perks). It charges fees on money transfers and withdrawals above its fair usage limits. Weekend transactions and currency conversion fees may apply. It makes money from replacement card and delivery fees. Click here for Revolut’s fees.

Starling Bank makes money from interest on overdrafts, personal loans, and account balances. It charges fees on money transfers. It charges for replacement cards and certifying account documents. Click here for Starling’s fees.

Products & Services

Current Account

A current (checking) account is a bank account that allows you to conduct everyday financial activities such as deposits, withdrawals, bill payments, and 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.

All four companies offer U.K. current accounts. Revolut and Starling Bank also have free Euro IBAN accounts. 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 four companies provide in-app saving mechanisms, and Monzo and Starling offer official savings accounts. Also, Monzo customers can open tax-free savings, joint, and teen accounts. Starling customers can get joint and teen accounts.

Overdraft

Monzo and Starling Bank have 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. For Starling Bank, you’ll pay an equivalent annual rate (EAR) of 15 percent. If you go over the overdraft limit, a standard interest rate applies.

International Money Transfer

Monzo and N26 facilitate money transfers through TransferWise. TransferWise is another topnotch U.K. 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 U.K. companies that offer free money transfers. The other is TransferGo.

Starling Bank does money transfers, but rates are not as good as Revolut and TransferWise.

Insurance

Travel insurance can 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.

Monzo, N26, and Revolut offer insurance products while Starling Bank does not.

Personal Loans

A personal loan is a type of unsecured loan. You typically don’t need to pledge any security or collateral to get the loan. The lender provides funds to use at your discretion but charges a fixed or variable interest rate on the entire amount or on money that’s used.

Starling Bank and Monzo offer personal loans while N26 and Revolut do not.

Comparison
MonzoN26RevolutStarling Bank
UK accountsYesYesYesYes
Euro accountsNoNoYesYes
Savings accountsYesNoNoNo
Joint accountsYesNoNoYes
Teen accountsYesNoNoYes
Personal loansNoNoNoYes
OverdraftYesComingNoYes
Money transferYesYesYesYes
InsuranceYesYesYesNo
InvestingNoNoYesNo
CryptocurrenciesNoNoYesNo
Monthly feeFree to £6/mo.Free to £14.90/mo.Free to £12.99/mo.Free

*TransferWise offers a “borderless” account, which is like a current account. Users can send, receive, spend, and withdraw money at mid-market rates. Accounts are available for the U.K., Europe, the U.S., Australia, and New Zealand.

Best Services
  • Best for sending money: Revolut
  • Best for holding multiple currencies: TransferWise
  • Best for saving: Monzo
  • Best for personal loans: Starling Bank
  • Best overdraft: Monzo
  • Best insurance products: Revolut
  • Best for global citizens: N26 and Revolut
  • Best card design: N26
  • Best perks: Revolut
Final Word

Challenger banks aren’t reinventing the wheel, but they’re improving and simplifying how wheels turn. 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. Those value propositions make them viable candidates for your financial goals and activities. Currently, Revolut offers the widest range of financial products and services.

 

Chad Tennant

Chad is an online marketer, consultant, and publisher. He helps businesses and individuals achieve growth and financial success. Learn more at digitalfodder.com/about

 
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