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5.0

Monzo: The smart banking app with big travel benefits

Monzo is a popular digital banking app that offers a current account with extras. There's a savings account, cash ISA, stocks and shares ISA, and a general investment account. Monzo also bills itself as the travel money card as it offers fee-free use abroad with low exchange rates.

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The following dataset includes the performances of ready-made portfolios/funds offered by investment platforms and may include both actively and passively managed ready-made portfolios/funds. Performance indicated is also net of all fees to 31st January 2024, unless stated otherwise; any tiered fee structure will be disclosed. Ready-made portfolios/funds that include cryptocurrencies or any other securities outside cash and equities are not included in the dataset. The dataset only includes ready-made portfolios/funds which are explicitly advertised by their respective platforms as being for ‘beginners’, and which are exclusively offered by the platform itself. Funds which are managed by other providers and may be identically offered across multiple platforms were not included in this dataset. For example, the Vanguard UK All Share Acc. ETF was offered by Plum, but as it is not directly managed by Plum and customers could reasonably access it on multiple platforms, it was not included for the purposes of this research. Other discretely advertised securities or investments are not included.
Avg. 5-year performance across all Monzo ready-made portfolios
info
The industry average is the median average of all fund/ready-made portfolio performance figures we collated from 23 investment providers. To see the full dataset, visit X page.
Industry avg.

For investing: Capital at risk

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By Clare West

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Clare's view:

The Verdict

Average Success Rate

50%
The following dataset includes the performances of ready-made portfolios/funds offered by investment platforms and may include both actively and passively managed ready-made portfolios/funds. Performance indicated is also net of all fees to 31st January 2024, unless stated otherwise; any tiered fee structure will be disclosed. Ready-made portfolios/funds that include cryptocurrencies or any other securities outside cash and equities are not included in the dataset. The dataset only includes ready-made portfolios/funds which are explicitly advertised by their respective platforms as being for ‘beginners’, and which are exclusively offered by the platform itself. Funds which are managed by other providers and may be identically offered across multiple platforms were not included in this dataset. For example, the Vanguard UK All Share Acc. ETF was offered by Plum, but as it is not directly managed by Plum and customers could reasonably access it on multiple platforms, it was not included for the purposes of this research. Other discretely advertised securities or investments are not included.
info5-year performance across all Monzo ready-made portfolios.
26.4%
The industry average is the median average of all fund/ready-made portfolio performance figures we collated from 23 investment providers. To see the full dataset, visit X page.
infoIndustry average
I always take a good long look at the customer review sites when I'm writing one of these pieces because I'm aware there's always a chance my personal experience is something of an outlier. I needn't have worried with Monzo; the bank has plenty of evangelical fans whose opinions mirror my own. "The way banking should be"... "I really feel in control of my spending and saving"... "instant banking without the old entrenched processes of the other older banks."

So what is it about Monzo that wins people over? Well, while some of the innovative features Monzo has brought to market over the past 9 years can now also be found on other banking apps, Monzo continues to be a trailblazer.

There are smart account features such as automated roundups, savings pots, customisable budgeting tools, and even early a payday option where you can access your salary one working day early. If you aren't due to get paid until Monday, but want your salary for the upcoming weekend, that means you can request it's credited into your account on the Friday. Handy if you've got something special planned right before payday. One of my favourite things about Monzo is their use of Open Banking to allow you to pull all your bank accounts and credit cards onto one screen in your app. That allows you to see what you've got - and what you're owing - across all your banks. And it's all so easy to do. Nothing requires effort to set up.

Monzo also now offers investment options, although, as a gateway into investing rather than a specialist investment platform, your options here are limited. But, if you have money leftover at the end of the month, Monzo's choice of cash and stocks and shares ISA allows you to choose a tax efficient way to get your money working.

Then there are the travel money benefits. This was what drew me in initially, and I'm sure I'm not alone. If you pay in more than £500 to your Monzo current account every month, and have at least one Direct Debit set up, you can get unlimited, fee-free ATM withdrawals if you're holidaying within the European Economic Area. And you can use your Monzo debit or credit card anywhere to pay in any currency with no foreign transaction fees or hidden costs - even on the free account. For no monthly fees, that's a pretty unbeatable benefit to have in your pocket when you're roaming the world. In this and so many other areas, Monzo makes the traditional high street banks look archaic and costly by comparison.


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Pros

  • Pay anywhere and in any currency on your debit or credit card
  • Monzo uses Mastercard's exchange rate + 0% fee
  • Ability to set up 'Pots' means you can separate money, pay bills and save
  • Split bills and spare change round-up features
  • Investment options available
  • Savings account has good rates of interest
  • Cash ISA available
  • Stocks and shares ISA available
  • Money held in Monzo is covered by FSCS protection
  • As Monzo is a bank, you can pay in cash and cheques, set up standing orders and Direct Debits, and apply for loans and overdrafts
  • Cashback offers available to all customers
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Cons

  • £1 charge for depositing cash (top-tier accounts get 3 free deposits per month, however)
  • 3% FX fee for non UK/EEA ATM withdrawals over £200/£600 per month (depending on plan)
  • Monzo is a mobile app-only, so you must have a smartphone
  • Must treat Monzo as a main bank account to get unlimited foreign ATM use (and offer only applies within European Economic Area)
  • No interest on your current account balance, unlike Starling Bank
  • No physical bank branches
  • Verdict5.0
  • Fees5.0
  • Trading Platform5.0
  • Research2.0
  • Safety5.0
  • Education
  • Customer Service0.0
  • Corporate Actions3.0
  • Portfolio View

Clare's view:

Who do I recommend it for?

Average Success Rate

50%
The following dataset includes the performances of ready-made portfolios/funds offered by investment platforms and may include both actively and passively managed ready-made portfolios/funds. Performance indicated is also net of all fees to 31st January 2024, unless stated otherwise; any tiered fee structure will be disclosed. Ready-made portfolios/funds that include cryptocurrencies or any other securities outside cash and equities are not included in the dataset. The dataset only includes ready-made portfolios/funds which are explicitly advertised by their respective platforms as being for ‘beginners’, and which are exclusively offered by the platform itself. Funds which are managed by other providers and may be identically offered across multiple platforms were not included in this dataset. For example, the Vanguard UK All Share Acc. ETF was offered by Plum, but as it is not directly managed by Plum and customers could reasonably access it on multiple platforms, it was not included for the purposes of this research. Other discretely advertised securities or investments are not included.
info5-year performance across all Monzo ready-made portfolios.
26.4%
The industry average is the median average of all fund/ready-made portfolio performance figures we collated from 23 investment providers. To see the full dataset, visit X page.
infoIndustry average
arrow-down-orangeRead more
quote

Pros

  • Pay anywhere and in any currency on your debit or credit card
  • Monzo uses Mastercard's exchange rate + 0% fee
  • Ability to set up 'Pots' means you can separate money, pay bills and save
  • Split bills and spare change round-up features
  • Investment options available
  • Savings account has good rates of interest
  • Cash ISA available
  • Stocks and shares ISA available
  • Money held in Monzo is covered by FSCS protection
  • As Monzo is a bank, you can pay in cash and cheques, set up standing orders and Direct Debits, and apply for loans and overdrafts
  • Cashback offers available to all customers
quote

Cons

  • £1 charge for depositing cash (top-tier accounts get 3 free deposits per month, however)
  • 3% FX fee for non UK/EEA ATM withdrawals over £200/£600 per month (depending on plan)
  • Monzo is a mobile app-only, so you must have a smartphone
  • Must treat Monzo as a main bank account to get unlimited foreign ATM use (and offer only applies within European Economic Area)
  • No interest on your current account balance, unlike Starling Bank
  • No physical bank branches
  • arrowVerdict
    5.0
  • arrow Fees:
    5.0
  • arrowTrading Platform:
    5.0
  • arrowResearch:
    2.0
  • arrowSafety:
    5.0
  • arrowEducation:
    0
  • arrowCustomer Service:
    0.0
  • arrowCorporate Actions
    3.0
  • arrowPortfolio View

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Updates

April 2024 Monzo introduces 3 new paid account types: Extra, Perks and Max. These are the only paid-for account types open to new customers. Existing Plus and Premium account holders can retain their existing account types if they do not wish to change.

Who do I recommend Monzo for?


  • Holidaymakers, travellers and those who frequently send money abroad.
  • Those looking for a modern bank account with extras and perks, by which I mean insurance cover, a railcard, a gateway into investing or crypto, and advanced spending insights.
  • Anyone wanting to get organised with their finances, budget and keep on top of spending.

5.0

Accounts and fees


Monzo customers can choose between a free account, or one of three paid-for accounts. The perks and range of features available to you as a Monzo customer – and the fees you will pay to access those perks and range of features – vary depending on the account you choose.

There are a few partner perks if you opt for a paid-for account, although Monzo doesn't go to town on this quite as much as Revolut does. That said, you'll be paying far more for a top-tier Revolut account than with Monzo (£45 per month for Revolut Ultra vs £17 per month for Monzo Max).

The three paid-for accounts were only launched in April 2024. Before that, there were two paid-for accounts; Plus and Premium. Customers with those accounts can continue to use them. New customers, however, can only access the account types listed in the table above.

Monzo's offer of unlimited fee-free debit card used abroad and unlimited fee-free ATM withdrawals makes it one of the the best cards for travel. It's important to remember, however, that there are some conditions attached to those fee-free foreign card-use benefits:

  • You must be using your card within the European Economic Area (or the UK)
  • You must treat Monzo as a main bank account, or pay for a Perks or Max account

What does ‘main bank account' mean? It means at least £500 was paid into your Monzo account over the last rolling 35-day period (government benefits and student loan payments count), and you must have had at least one active Direct Debit in the same period. So, it's not too hard to meet the criteria and it doesn't mean you need to transfer everything over if you still want to keep another account open.

If you don't meet those criteria, however, then you won't see quite the same benefits. When travelling within the EEA, you'll be limited to £400 per month from ATMs – still more than many competitors allow – and there's a 3% FX fee for exceeding that threshold.

That 3% FX fee is one of the highest FX fees I've come across outside of a high street bank. Revolut charges 1% or 2% for transactions outside of its fee-free criteria. There are ways to avoid it, however, so be careful you meet the criteria if you want to visit the cash point or tap your Monzo card care-free on holiday.

“T212

Easy access savings account

With Monzo, you can earn 4.10% – 4.60% AER interest (variable) on your savings. The higher rate is just for customers saving in the Perks and Max accounts and isn't as high as Revolut's highest rate (4.75% currently). But generally, those rates compare favourably and, as it's an easy access account, you can withdraw funds whenever you like without losing the interest rate on your remaining funds.

If you're wondering how you pay cash in without physical Monzo Bank branches – you can use the Post Office or any UK PayPoint.

Instant access cash ISA

Earn 4.10% AER interest (variable), paid monthly. That's a reasonably good rate, especially when you consider there's no minimum deposit, and you can access your money at any time. You could get a better rate elsewhere, however. Check out our Best Cash ISA page for the top payers.

Investments

Monzo offers the chance to dip your toe into the world of investing. There are just three options to choose from – so this isn't somewhere you can earn a living trading the markets – rather it's a gateway into trading. It's somewhere to put any leftover savings you have that could be earning you an income rather than languishing in your current account.

With investing comes risk, of course. So you'll need to feel sure that the level of risk your money is being exposed to is something you're comfortable with. If you don't like any level of risk, then either of the instant access savings or cash ISA accounts where you returns are more certain, would probably suit you better.

With Monzo, you can choose from three ready-made funds. Each one is designed to align with a different risk-rating. They are all managed by Blackrock, one of the world’s largest fund managers, so you won't need to pick individual stocks and shares yourself. That means they're well suited to those who are new to investing or don't have the time or desire to get into the nitty gritty of different investment options and strategies.

The three funds are labelled:

  • Careful: You don’t want to take too much risk, and you’re happy with a potentially smaller return compared to what you might get with the other funds.
  • Balanced: You’re aiming for slightly higher returns and you're prepared to accept a medium level of risk. As a result, your investment value could dip more compared to Careful.
  • Adventurous: You’re happy taking more risk if it means your returns could be higher.

Investment fees

To invest with Monzo, you'll pay 0.59% of your investment value in fees. Monzo does something not many investment platforms do and includes their fund fees in that headline rate. It's easier for them to do this as they have just three funds and one, consistent fund fee of 0.14% across them all. Larger providers will have varying different fund fees, but by having one fund fee, Monzo can make overall fees simple and transparent. Working out fees with larger, investment platforms with lots of choice can often feel like mission impossible, so this feels like a more welcoming and manageable way to get started.

If you want to compare fees with other platforms, you're paying 0.45% as your platform fee. For £1,000 invested, that means you’d be paying 48p a month (if there was no growth or withdrawals).

If you're a Perks or Max customer, then you’ll pay a lower platform fee of 0.35%. (So the total fee including fund fees is 0.49%). That's 40p per month for every £1000 invested.

Fees are charged monthly and don't alter as your portfolio value grows.

So, how does that compare?

Monza's investment fees are high. Revolut, for example, charges 0.25% – 0.12% commission, depending on your plan type.

Cryptocurrencies

You can use a range of cryptocurrency exchanges with Monzo, including major exchanges like Coinbase.

Following the FCA’s warning on Binance, however, Monzo has stopped allowing payments to that platform for the time being.

How does Monzo compare to competitors?


Monzo's offer of unlimited fee-free debit card used abroad and unlimited fee-free ATM withdrawals makes it one of the the best cards for travel. A quick look at this table illustrates how well it compares:

Awards


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Monzo vs Revolut


FAQs

Monzo Bank is authorised and regulated by the UK Financial Conduct Authority (FCA). They are also a member of the Financial Services Compensation Scheme (FSCS), so your eligible deposits are protected up to a value of £85,000 per person.

No, currently Monzo only offers accounts for people aged 16 years and over. They say they hope to change this in the future, though.

Yes, Monzo is a authorised as a bank in the UK. That means you can pay in cash and cheques, can take out loans and be given an overdraft. It also has protection implications as UK bank account-holders are entitled to FSCS protection.

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