Starling vs Monzo Bank

Monzo has taken the Best British Bank title from Starling after they won it four years in a row. So if you want a new digital bank, one of these should be the best right? Starling vs Monzo, who should you pick? I’ve used them both for years now. I will break down each of the pros and cons of these 2 banks. I will focus on personal accounts over business accounts. If you want me to cover the business part in more detail let me know in the comments. Let’s get started.

Starling Bank

Monzo Bank

Who are Starling and Monzo?

Both Starling and Monzo are what is known as a challenger bank. Which are ‘new’ banks going up against the ‘old’ banks. Basically, a recently made bank that competes against the brick and mortar banks we’ve grown up with. Such as HSBC, Barclays, Lloyds Banking Group and NatWest Group.

These new and mobile banks focus on being easy to access digitally. With great apps, modern features, low to no fees and quick accessible customer service. There is a risk involved with choosing a challenger bank. Both Monzo and Starling are registered and are covered by the financial services compensation scheme up to £85,000. Taking much of that risk away.

Starling was founded in 2014 by Anne Boden and Monzo in 2015 by Tom Blomfield. Both banks are based in London and have no brick and mortar branches.

Starling vs Monzo – What Accounts Do They Offer?

Both banks offer Personal, Joint, Teen and Business accounts. Starling has more types of accounts including one for young people (6 – 16). This is a great tool for teaching young people about money and money management, which is not available on Monzo. They also offer a Euro Account allowing you to hold, send and receive euros. This could be great for anyone with family in Europe. I’m not going to go into detail about that here.

Personal Accounts;

So what’s the difference in the personal accounts between these two banks? Well Starling offers a no fee personal account with all their features. Monzo has 3 different accounts with different fees.

They have the Monzo account, which is free. Then the Monzo Plus account, which costs £5 per month and for that you get;

• to see other accounts within the Monzo app.
• Boost to your savings with 1% AER interest (variable) up to £2,000
• A holographic card
• Custom categories
• Virtual cards for online spending
• A credit tracker
• Fee-free withdrawals abroad*

*With restrictions that we will come onto later and a few other benefits, full details will be linked below.

For £15 per month, you can have a Monzo Premium account, the benefits of this are as followed.

• Metal card
• Phone insurance
• Travel insurance
• A boost to the interest rate and a few more.

You will likely get offers from Monzo for trials of the Plus account. Be careful because there is a 3-month minimum sign up for the Plus account and a 6-month minimum sign up for the Premium account.

Joint Accounts;

With Monzo, you can set up a joint account from your current account within minutes. You get a separate card for the account. The app will show who made each transaction, making management nice and easy.

With Starling, you both need separate personal accounts and then through the app you can put your phones together and link them to make a joint account. If you don’t want to allow control of the money to both parties then Starling also offers a connected card, a restricted card linked to your personal account. Only you have control of the card and can top up, track and cap it from the app. The service costs £2 per month per card but there are no fees or charges for transactions, transfers or withdrawals. I think it’s a great way to manage pocket money and teach young people about money.

Young person account;

Both Banks offer an account for teenagers 16 – 17 years old. These accounts can be applied for and work just like a normal account. The difference is that payments are restricted against anything illegal before 18 such as gambling sites.

Starling Bank goes further with Starling Kite. It’s a service that opens an account within your own Starling Current account for kids 6 – 16. You have complete control and access to their account. They get their own card and app that lets them monitor and track their transactions. You may also be interested in these benefits and tips on Teaching Your Kids About Money Management and Budgeting.

Verdict; Starling

For me, the additional things you get with the paid for accounts on Monzo are not worth the money and their free account works just fine for me. Both the Starling personal account and the free Monzo account have enough features for me. However, because Monzo makes it a little more complicated and hides some of their features behind a paywall I will put Starling in top place here. Starling also offers some of the things that Monzo charges for, such as the round-up savings feature. They have better support for use abroad as well, which we will see in the travel section. I like the idea of giving my kids their own cards and access to money at a younger age.

Security – Are Monzo and Starling Safe?

As I said before, both banks are listed and regulated and are covered by the financial services compensation scheme up to £85,000. They both offer secure logins with the choice of touch id, face id, fingerprint or pin. You can lock and unlock your card on both of the apps, which is great security if you lose your card. They both offer instant notification for money going in or out of your account, making tracking false charges easy. You can enable or disable all sorts of spending features, such as contactless or ATM withdrawals.

Verdict; Draw

So I can’t really separate the two, they both have great security features. I’m going to have to call it a draw

Starling vs Monzo – Opening an Account

Both banks offer free applications through their own respective apps. If you click to join on their website you will be linked directly to their app.

Starling Bank

Monzo Bank

You will need to take a photograph of some ID, your driver’s licence for example and you make a quick selfie video saying a passphrase to verify the ID. It only takes a few minutes and they both send their cards out quickly too.

Verdict; Draw

They are both very quick and easy to open accounts for and being able to do it all from your sofa is great. I’m going to have to call it another draw.

Starling vs Monzo – Banking Fees, Rates and Charges

As already established there could be a fee for your account if you chose the Plus or Premium version of the Monzo Account. What other fees are there and how do they compare?

Can You Deposit Cash?

Starling Account holders can deposit £1,000 cash free of charge at the Post Office per year. After that, they charge a 0.7% fee on cash deposits. Whereas Monzo allows for one free cash deposit per month and charges £1 for each additional deposit in that same month.

Lost Your Card?

Starling says they may charge a fee of £5 to replace your card and that the card will be sent to the current address the account is registered to. I couldn’t find clarity on when they would or wouldn’t make this £5 charge. Monzo allows for 2 free replacements and then charges £5 per replacement card within the UK after that.

Verdict; Monzo

Neither bank charges for your day to day use, such as cash withdrawals in the UK, direct debits, standing orders, sending money in the UK etc. So both banks are pretty similar here again but Monzo makes things a little clearer and has a cap on overdraft fees of £15.50 per month.

Starling vs Monzo – Savings Accounts and Interest?

Starling uses Saving Spaces, they allow you to customise the titles, target amount and image. You can set up automatic transfers into the space, which has great customisation. Then set daily, weekly, monthly and annual payments, which repeat for an amount of time or until you hit a certain figure then it will automatically stop the payments.

Set bills from your spaces, allowing for great money management and finally you can have Round-Ups enabled or disabled for each individual space.

As for growing your wealth, I’ve covered how a savings account won’t match up to inflation in many posts. You may be interested in learning about Generational Wealth and how to build it. Therefore don’t consider savings accounts a way to grow wealth. That said Starling offers 0.05% AER on balances up to £85,000. The free account from Monzo offers no interest at all. You can get up to 1.5% AER if you pay the £15 per month for the premium option. Then things get a bit more complicated to say if that’s worth it in the context of growing wealth.

Monzo has a similar thing to Starling but they call their’s Pots instead of Spaces. Set your own title, goal and image. You can also lock or hide them, so if you set up an automatic payment into a pot and hide it you won’t be tempted to dip into your savings. You can use Roundup and make payments from the Monzo Pots too

Verdict; Starling

The way you can manage your savings into little sections within your account is great and very similar on both Apps but the ability to set your automatic payments to stop upon hitting a target and because Monzo offers no interest on their free account I will name Starling the winner here.

Starling vs Monzo – Making Payments

A major function of a current account is to be a holding for money and to pay the bills. So how easy is paying a friend or the bills with Starling and Monzo?

Paying Bills From Starling and Monzo Accounts

Both Starling and Monzo allow you to pay out from their spaces/pots respectively. Starling has a linking feature they call ‘Bills Manager’. You can set up a space called bills then when in that space select ‘manage space’ and then ‘pay bills from this space’. From here you can choose any existing direct debits and standing orders to be paid from this space. Up to now, this is very similar to what you can do with Monzo too. However, a nice feature with starling is that it will prompt you to set up an automatic transfer to cover the payment. Starling suggests setting it to go into that space on payday.

Now if you set all of your bills up like this it means on payday all of the money needed for your bills that month automatically gets put into a space and when the payment is due Starling will automatically make the payments from that space. This makes managing your money and budgeting a lot easier. The balance that you see in your current account on payday then becomes what you have left with all your bills covered.

Paying Friends From Starling and Monzo Accounts

Monzo allows you to pay people using your phone contacts, so sending money to friends is very easy. You can also send money via email, text or social media without having to know their bank details. They use a system called Monzo.me, a unique username set to your account. Make sure you have Payments with Friends switched on and then go to Payments > Request > Share a Link. This will give you a link you can share with anyone that allows them to send you money without having to see your account details. Be aware that Credit Cards and Prepaid cards don’t work using Monzo.me.

Starling has very similar features to Monzo, allowing you to send a link for anyone to securely pay into your account without having to share details. For friends close by with a starling account you can use the app to make payments straight through the app over Bluetooth. 

Both banks have a split the bill feature. If you have been the one to pick up a bill you can select it within the app and use the split the bill feature. You then select who or how many you are splitting the bill by, and select who you want to send requests. People using the same account as you will get notifications they can accept otherwise they receive a message with a link to securely make a payment. Gone are the days of awkwardly asking for money over messages and sharing out your bank details.

Verdict; Monzo

Both banks allow for sharing a link to request money securely. They both offer a great split the bill feature and have their own ways of making things simple, Monzo incorporating social media and contacts, Starling using Bluetooth connection in their app. Monzo takes the win for offering more options outside of someone also using the same account, using your contacts or social media for example.

Starling vs Monzo – Best for Travelling

Both of these banks are great for travellers. Some banks need to know before you leave about where you are visiting otherwise they may lock you out of your account. Starling and Monzo allow you to travel without the need for a prior warning. This is probably in part because you have the ability to lock your card yourself through the app.

You may be interested in my post; Best Card To Use Abroad

Fees When Using Starling or Monzo Abroad

Starling does not charge any fees for transactions or cash withdrawals around the world. They are accepted wherever you see the mastercard symbol, which is supported globally. There is a small list of excluded countries, which you can see here. Check out this post for more information about Using Starling Abroad.

Monzo doesn’t have any fees for transactions abroad but they may charge for withdrawals. Monzo has different rules for within the European Economic Area (EEA) and the rest of the world. You can withdraw cash fee-free within the EEA unless Monzo classes you as someone using their card as a spending card rather than a main bank. In that case you can withdraw £250 every 30 days within the EEA after that you are charged 3% as a withdrawal fee.

With Monzo in the rest of the world, you can withdraw £200 with their free account, £400 with their plus account and £600 with their premium account. That allowance works on a 30-day rolling system from the date of withdrawal and anything outside the limit is charged at a 3% fee.

Monzo and Starling app features for travel

As you land in a new country Monzo will send a notification telling you the current exchange rate. Showing how much £10 (or $10) is worth in the local currency. This is great to start you off with understanding the cost of things. They also make it easy to mark transactions as ‘holiday’ making it easy to track and manage when you get home.

Starling will show both local and foreign values on their instant notifications for each transaction making tracking spending nice and easy.

Verdict; Starling

They both have great features within their apps when abroad, and they are both accepted in most places. They both use the MasterCard exchange rate. The fees for withdrawals and tracking 30 days for each withdrawal would be difficult for longer trips making Starling the winner here.

Starling vs Monzo – The App

As digital banks both Monzo and Starling are dependent on their apps so how do they compare? You may also be interested in find some of the Best Money Saving Apps

Reviews

Looking at the Google play store first they both have just under 80k reviews and Monzo scores 4.7, and starling scores 4.8. On the apple store, Monzo has around 100k reviews scoring 4.9 but starling has 3x the amount of reviews at over 300k reviews also scoring 4.9.

Both banks have excellent usability and features and the reviews reflect this. I love the security of being able to lock them within the app. I love the ease of access to information. The automated management or insights on starling or the instant notification makes budgeting easier than ever. 

The list of great features could go on and on so I think from here it will just be personal preference. 

Verdict draw (personal opinion; Starling)

My opinion is that Monzo may offer a bot more information upfront or customisation whereas starling is set to be more user friendly and aesthetic. For this reason, I would name Starling as the winner but I’ll call it a draw to keep the review unbiased.

Starling vs Monzo; My Summary

These digital banks are the most popular challenger banks for a reason. They represent a change in the banking systems we’ve been used to. Making use of technology they are modernising the way that we bank.

With feature-packed apps they are making managing money, budgeting and tracking spending easier than ever. It is my hope that this will open the eyes of their users allowing them to get better control of their personal finances.

If you are looking for a new bank you’ll be glad if you went for either of these banks. Separating the banks is difficult but for me, I would suggest looking at the benefits of plus and premium accounts from Monzo. If you don’t think you need any of the additional features then go with a free starling account. It’s worth checking the features you like on the paid-for accounts with Monzo because starling offers a couple of them on their free account.