We live in a time when we’re spoilt for choice when it comes to digital banks. It’s exciting seeing what’s on offer from the various challenger brands that are shaking up the industry.
As the race for expansion begins to hot up, these new providers are scrambling for customers.
Lucky for us, it means there are plenty of great sign-up offers to choose from. It also means that traditional banks have to up their game. With such an array of providers, choosing just one can be tough.
In our vs series, we take a head-to-head look at some of the key players. Let’s start with Monzo vs Starling, two of the biggest hitters.
Monzo vs Starling — Quick Look
If you’re short on time and need a top-level comparison, we have just the thing.
| Feature | Monzo | Starling |
|---|---|---|
| Cost | Free. | Free. |
| ATM Limit UK | Free, £400 daily limit. | Free, £300 daily limit. |
| ATM Limit Overseas | Free up to £200 per month. 3% charge thereafter. | Free, £300 daily limit. |
| Overseas Transaction Costs | No fees. | No fees. |
| Reports | Spending tracker. Breakdown of what you spend and where. | Insights. Compares spending between merchants. |
| Adding Funds | Bank transfer, salary pay in, standing order. | Bank transfer, salary pay in, standing order. |
| Alerts | Real-time notifications when your spending trends too high. | Real-time notifications. Notifies if you have insufficient funds. |
| Card Security | Can pause card via app. | Can pause card via app. |
| Savings | Various options. Spending goals and side pots. | Various options. Spending goals and side pots. |
| Interest | Various fixed rate and flexible options from 1% - 1.7%. | Up to £85,000, 0.05% AER. |
As you can see, it’s quite a close matchup, with both banks providing a strong offering. Let’s look at things in more detail.
Monzo vs Starling — Features
These two companies both have a tonne of features that come with their apps. With both, you can apply in around five minutes and get your physical card within a few days (although Monzo is slightly quicker). Once your account is approved, you can link your card to Apple Pay and Google Pay before the physical card arrives.
When it comes to actual in-app features, the two are almost identical:
- You can set money aside for saving. Monzo offers ‘pots’ and Starling offers ‘goals’, but on the surface, they’re the same. You can’t touch this money on a day-to-day basis unless you move it back into your main account.
- Your spending is categorised. Whenever you make a purchase, both apps automatically assign it into a category. The apps both tell you if you’re reaching your limits.
- You get a monthly report. Each provides you with a breakdown of what you’ve spent and what you’ve spent it on. It’s useful for seeing where your money has gone.
Monzo vs Starling — Travelling
One of the most attractive aspects of many challenger banks is the fee-free overseas transactions. They can save you a significant amount when compared to traditional banks. Both of these companies are well-suited to travelling, with an array of features:
- Zero transaction fees. Using your card abroad won’t cost anything. You’ll get the Mastercard exchange rate on the day you made the purchase.
- ATM usage. Previously, both banks offered the same daily ATM limit overseas as in the UK. However, Monzo now has a £200 monthly limit. Everything above this costs 3% of the transaction. For Starling, your daily ATM limit is £300.
- Card management. If your card is lost or stolen while you travel, you can instantly pause or cancel it using the app. This is the same for both banks and can be a useful feature when you travel.
Starling vs Monzo — Savings
One of the newest features for each bank is their savings options. This gives you the chance to not only put money aside but to accrue some interest on it. However, the rates on offer aren’t quite as good as those offered by traditional banks:
- Starling pays 0.05% AER on balances up £85,000. 1 Year Fixed Saver at 5.25% AER.
- Monzo has a range of options. Easy access options have rates between 1% and 1.5% AER. ISAs give between 1.12% and 1.14% AER. Fixed-rate options range from 1.35% to 1.17% AER. This is a competitive range that is constantly growing.
Monzo vs Starling — Overdrafts
It’s often useful to have a backup line of credit such as an overdraft. Both companies offer them, however on quite different terms. Additionally, you’ll need to pass a soft credit check to be eligible. Here is how the two compare:
- Monzo offers overdrafts of up to £1000. However, you’ll pay a rate of 50p per day when you’re overdrawn more than £20. So, unless you need the money short-term, it may not be worth it.
- Starling gives an amount based on your current situation. The overdraft rate starts at 15% EAR. This usually works out to be a better rate than Monzo.
Monzo vs Starling — Which is best?
There’s plenty to appreciate about both of these challenger banks. There are many similarities, and each has its pros and cons.
As such, it makes it difficult to declare one better than the other. In reality, each could be more suited to some users than others.
Monzo has better savings offers… Starling has better incentives for travellers.
Monzo has better savings offers, meaning you’ll get more from your money when it’s saved. It’s a lot more flexible too, with options for different kinds of savers.
On the flip side, Starling has better incentives for travellers. The uncapped ATM withdrawals per month make it ideal for those looking to spend cash abroad.
