Monzo business bank account review

13 min Read Published: 12 Oct 2021

What is Monzo business?

Monzo business bank account reviewMonzo has built a popular app for personal users to manage their current account, set budgets and monitor their spending easily from a smartphone and now the fintech firm has entered the business banking space.

Its business bank accounts are open to UK-based sole traders or limited companies that only pay tax in the UK.

Limited companies must be active on Companies House with an active company director and at least one person of significant control. This aims to eliminate complicated structures where a business could be owned by several other companies. Limited companies must also make money mostly from selling goods or services, not from interest or investment income.

The app doesn’t currently support other business structures such as partnerships, charities, limited companies by guarantee, public limited companies, trusts or funds. There is also a long list of industries that Monzo won’t provide accounts for such as construction, consumer credit and business involved with gambling and weapons. View the full list here.

How does Monzo business work?

There are no appointments necessary to get a Monzo business account. You can sign up straight away by downloading the app however, you'll need to be a current account user in order to apply. For more information on a Monzo current account read our independent Monzo review. If you are already a Monzo user, you can simply click a button to apply for a business account through the app.

Signing up is a quick process compared with having to make an appointment in a bank branch and dragging along a load of paperwork. New users will need to verify their email and phone number and enter their personal details. There are also anti-money laundering and credit reference checks so have some ID ready to upload and also prepare for a selfie to confirm who you are.

Once your account is approved, you can apply for a business account and will need to enter details including the sector you work in, the type of business you run and how you receive your income, such as in cash or through bank transfers.

If your application is approved, you can start using the account straight away and users can also switch to Monzo through the Current Account Switch Service.

Monzo Business account features

  • Business debit card - Choose between a pebble grey or slate grey finish MasterCard debit card
  • Instant notifications - Receive instant notifications when a payment has been made
  • Digital receipts - Upload receipts as you go
  • Categorise spending - manage spending and budgets with payment categories
  • Savings pots - separate your money into pots
  • Invoices - create and send invoices via the app or on the web page
  • Tax pots - Put money aside for tax bills with tax pots. You can choose to transfer money manually or set aside an automatic amount each month (pro users only)
  • Multi-user access - Limited companies can add up to two other people to access and manage the account. All three users will be able to make payments, see incoming and outgoing payments and edit account information (pro users only)
  • Accountancy tools - Integrate software such as Xero, FreeAgent and QuickBooks so you or your accountant can easily keep track of financial information to help with balancing the books (pro users only)
  • Mobile and web access - Access your account from both your phone and computer. The web app lets you pay people, export statements and see your transaction history, while you can do this and other important tasks through the mobile app such as setting alerts, sending invoices and uploading receipts.
  • 6 months of accounting software Xero - get 6 months of the accounting software Xero free with a Monzo Pro business account (optional)
  • 24/7 customer support - Chat to customer services at any time via the app, over the phone or email
  • Fee-free spending abroad - Spend abroad with no additional fees
  • Instant UK bank transfers - Move money between UK accounts for free
  • FSCS protection - Your money is protected up to £85,000 with the Financial Service Compensation Scheme

How much does Monzo business cost?

Monzo offers two business account options and we breakdown the features of each account in the table below:

Monzo Lite Monzo Pro 
Monthly cost  FREE £5
Monzo current account benefits (including instant notifications and fee-free spending abroad)  tick tick
Business debit card tick tick
Mobile and web access tick tick
Integrated accounting  cross tick
Tax pots cross tick
Multi-user access (ltd companies only) cross tick
Invoicing  cross tick
Exclusive offers  cross tick
Xero - 6 months free (optional)  cross tick
FSCS protection  tick tick

 

The bank charges £1 to pay in cash at PayPoint and you can deposit up to £1,000 every 6 months. There are no charges for ATM withdrawals inside the European Economic Area (EEA), subject to a £400 daily limit. You can take out £200 cash for free every 30 days outside the EEA and there is a charge of 3% thereafter. For international transfers, you will need to pay a Wise transfer fee.

Is Monzo’s business account safe?

Monzo is fully regulated by the Financial Conduct Authority (FCA) so must follow rules on separating client money, being clear about charges and treating customers fairly. Up to £85,000 of your money is protected by the Financial Services Compensation Scheme so if Monzo becomes insolvent and you also have a right to complain to the Financial Ombudsman Service.

Monzo vs alternative business accounts

Monzo Business Starling Bank Business Tide Business Revolut Business
Monthly cost
  • Free (Lite version)
  • £5 (pro version)
  • Free
  • £7 Starling Business toolkit
  • Free
  • £9.99 per month plus VAT (Tide Plus)
  • £49.99 per month (Tide Premium)
  • Free
  • £7 a month (freelancer account)
  • £25 a month (freelancer account)
Free UK transfers cross
Free ATM withdrawal
Fee-free spending abroad *
Categorised spending
24/7 customer support
Cash deposits
Cheque deposits

*limits on free transactions for premium accounts

Monzo business vs Starling Bank business

Starling Bank offers much of the same service as Monzo's paid-for 'Pro' option but does so for free. Monzo Bank’s tax pots feature in its Pro version is useful and unique, although Starling Bank offers a Business Toolkit that costs £7 a month and offers bookkeeping and VAT management. Starling may work out more expensive when it comes to depositing lots of cash, at £3 each deposit up to £1,000 and 0.3% thereafter rather than the £1 you pay with Monzo. For more information on the Starling Bank business account check out our 'Starling Business review'.

Monzo business vs Tide business

Monzo offers more features and its paid-for 'Pro' version is cheaper than Tide’s offering. Tide can also be pricey if you are making a lot of transfers at 20p a time. Tide does offer a legal helpline with its Plus service, which could come in handy if you need support drafting documents or work in a particularly litigious sector. For more information on the Tide business account check out our 'Tide Review'.

Monzo business vs Revolut for business

Monzo offers more extras but Revolut is useful for those holding multiple currencies or not solely UK-based, so could be better for freelancers or companies operating internationally. There are also Revolut Business accounts for companies that are free, £7 a month or £25 a month. For more information on Revolut Business accounts check out our 'Revolut Business' review.

Monzo business vs high street business bank accounts

Monzo Business Santander 123 Business Lloyds Business NatWest Business
Monthly cost
  • Free (Lite version)
  • £5 (pro version)
  • £12.50 (discounted rate of £5 for start-ups for 18 months and switchers for 12 months)
  • Free for 12 months then £7 a month
  • No minimum monthly charge
Free UK transfers
Free ATM withdrawal tick
Fee-free spending abroad cross
Categorised spending
24/7 customer support
Cash deposits
Cheque deposits

 

Opening a business account has traditionally been a long-winded process that involves arranging a branch appointment during opening hours and bringing along paperwork to be assessed by the local bank manager.

Banking apps such as Monzo take away a lot of the time and hassle involved as you can apply online at any time of day and get a quick decision rather than making you wait for weeks as some high street lenders do.

Monzo offers a lot more than mainstream high street banks with lower monthly fees and far more fintech-focused extras to actually help you manage your business. There are downsides though as you have to be technologically savvy enough to manage most of your business finances through an app or on a computer. There is no bank manager you can go and see with any queries, instead you have to phone a contact centre. It may also not be best for those getting paid in lots of cash as there are limits on how much you can deposit each time.

Pros and cons of Monzo Business

Pros of Monzo Business

  • Quick setup - Download the app and sign up for a personal and business account within minutes.
  • Fee-free spending at home and abroad - No charges wherever you spend your money.
  • Accountancy integration - Send invoices, store receipts and get everything organised for HMRC.
  • Save for tax - Make sure you are saving enough for tax bills such as corporation tax.
  • Spending alerts - Keep track of money coming in and out without having to constantly log in to your account.

Cons of Monzo Business

  • Deposit limits - You can only pay in up to £300 in one go and up to £1,000 every six months.
  • App-only - There is no branch you can drop into with queries and everything has to be managed from your phone or the desktop app.
  • Eligibility restrictions - Monzo’s accounts are mainly aimed at UK-based businesses and focused on sole traders and limited companies (and there are some sectors that are excluded)

Summary

Monzo’s business bank account is a great way for UK-based entrepreneurs, whether sole traders or limited companies, to manage their firm’s finances. Information can be accessed quickly and efficiently on the move and so is a good option for businesses that receive most of their revenue electronically and who are unlikely to need to speak to a bank manager.