Digital banking with Monzo
Monzo introduces a new way to manage your finances from the comfort of your mobile phone.
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Who is Monzo Bank?
Monzo Bank was first introduced in 2015 under the name Mondo. It gained traction as one of the fastest growing crowd-funded campaigns in history, managing to raise one million dollars in a matter of minutes. Today Monzo offers a new way of banking; an account managed and run entirely through a mobile app.
As an app-based mobile bank, Monzo is a smart banking solution. It provides you with a MasterCard debit card and functions exactly as a normal current account does, with the key difference being that it’s all digitally run.
How does Monzo work?
Monzo works much like a regular current account – you’ll be able to set up standing orders and make withdrawals and deposits, but the difference is you can manage your account without needing to visit a branch. Unlike traditional banking however, Monzo boasts features to enhance your budgeting, help you understand and organise your finances as well as introduce some practicality to managing your everyday finances.
What features are there?
There are a number of features you can benefit from if you sign up with Monzo bank including:
Live, real-time updates when making purchases with your Monzo card via the app, letting you keep track of your balance
The app provides user-friendly graphics to help you understand your spending and saving habits
Pay anyone instantly through your app – and they don’t need a Monzo account. You can also keep track of who owes you money, and split bills
Round each transaction you make up to the nearest pound and add the remainder to a savings pot
Monzo can pinpoint certain transactions you make on a map made available through the app
You can opt to receive notifications if your bills are higher or lower than usual
The app allows you to add notes and receipts to your transactions
Monzo vs Starling Bank
Monzo and Starling Bank are probably the two best known app-based challenger banks. They offer quite similar products: slick apps with lots of ways to help you save and control your spending.
There are a couple of differences: Starling currently offers in-credit interest of 0.5% AER on balances up to £2,000, and 0.25% on balances of £2,000 to £85,000, while Monzo doesn’t apply interest to its current accounts. Starling also offers unlimited free overseas ATM withdrawals, but Monzo meanwhile caps how much you can take out before it charges to £200 in a 30-day period.
They’re both great at helping you save and keeping track of your finances, but there are other accounts which offer better rates of return on savings. Starling definitely edges Monzo for foreign spending.
Monzo vs Revolut
Revolut is another major new app-based bank. Like Monzo, Revolut does have a lot of features designed to help you manage your money, including spending insights and notifications, its focus is very definitely on international banking. It lets users hold and exchange 29 international currencies, including fee-free spending, and is possibly the cheapest option on the market for international money transfers.
Monzo is definitely better than Revolut for domestic banking however, charging no fees and offering basics like overdrafts and current accounts.
Perks for travel
You’ll be able to forego fees and charges when using a Monzo card abroad. This includes regular purchases at retailers and when buying services directly via the card.
Monzo provides free ATM cash withdrawals abroad, but it does have a £200 ATM withdrawal limit in place — anything above that over a 30-day period will be charged at 3%. So it’s a good idea to stick to direct purchases using your Monzo debit card as there is no limit or restriction set in place for direct payments.
The Mastercard exchange rate applies so it’s a good idea to keep track of the foreign exchange rate when you plan your travels.
How do you apply?
The app is available on iOS and Android. Once you download the Monzo app you’ll be asked to sign up. This will require a form of identification – your passport or driver’s license will do. Once you’ve completed the application, you’ll receive your debit card via post.
Can you withdraw money from Monzo?
You will be able to withdraw money from Monzo, much like you would with a regular debit or credit card. There is no cap on free ATM withdrawals within the UK.
Do you have to pay for Monzo?
There’re no fees involved in the sign up or use of Monzo within the UK, including free ATM withdrawals. This is also true for overseas use but if you withdraw more than £200 abroad, you’ll be charged 3% for withdrawals made moving forward.
How to contact Monzo
UK telephone number: 0800 802 1281
Calling from abroad: +44 20 3872 0620
Compare current accounts with MoneySuperMarket
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Once you’ve decided to switch your current account, simply click through to the provider where you’ll be able to sign up to your new account.