Monzo Review: Should you make the switch?

28 min Read Published: 20 Jul 2020

Monzo Review: Should you make the switch?What is Monzo and is it a bank?

Monzo started life in 2016 as a prepaid MasterCard that could be topped up via its app and used to make free withdrawals abroad. The brand was founded by Tom Blomfield, Jonas Huckestein, Jason Bates, Paul Rippon and Gary Dolman, who all previously worked at rival Starling Bank.

It built up a strong following and transformed into a fully-fledged banking brand after getting authorisation from the Financial Conduct Authority (FCA) in 2017 and launched a current account. Its prepaid card has since closed, with users upgraded to its current account service.

Monzo markets itself as a bank that lives on your smartphone and is built for the way you live today (or in other words, it is an app-only bank) and now has more than four million customers using its debit card to both manage their money and spend around the world. It even raised a record £1m in 90 seconds during a £20m crowdfunding campaign in 2018. Admittedly, this is something I was not comfortable with as effectively a loss-making entity invited customers to invest in its unlisted shares (unlisted shares are high risk by their nature due to the fact they aren't tradable on the stock exchange). In July 2020, Monzo announced record losses of 113.8m in what was clearly a difficult year, heavily impacted by falling interest rates and a worldwide pandemic.

Monzo Features

  • Salary Sorter - Sort your salary when you get paid into spending, saving and bills
  • Spending budgets - Set spending budgets to control spending for different categories such as eating out and track how well you are doing for the month
  • Savings pots - Create multiple pots to separate your money and save for goals. You can also set up automatic saving where spare change is rounded up and saved to one of your pots
  • Bills pots - Manage your direct debits and standing orders from a bills pot
  • Instant spending notifications - instant notifications when spending to see what's leaving your account in real-time
  • Free cash withdrawals abroad - fee-free cash withdrawals in the European Economic Area (EEA) and up to £200 per month elsewhere (a 3% fee thereafter)
  • No transaction fees - spend abroad for free with no additional charges added or an exchange rate mark up fee
  • Energy switching - switch energy provider through the Monzo app, and have the ability to receive up to £75 in credit if you switch
  • Joint accounts - set up a joint account with another Monzo account holder
  • Overdraft - Set up an arranged overdraft for up to £3,000 (for selected users only). You will be charged a variable rate of 19%, 29% or 39% EAR
  • Apple Pay - Pay with your Monzo card on ApplePay
  • Loans - Get a loan up to £3,000 with Monzo
  • Get paid early - A new feature that allows Monzo customers to be paid their salary or student loan a day early. Click here for more information.

How does Monzo work?

Monzo currently offers a range of accounts, including personal, joint and business accounts.

Monzo offers all the usual current account services such as receiving your salary, setting up direct debits, standing orders, withdrawing cash with a contactless Mastercard and transferring money. But it also lets you manage your money as well as just hold it.

You can set up various “Regular Pots” to transfer money into and build up a fund towards set savings goals. Monzo also has a feature that means you can automatically add the change from payments made on your debit card into one of your regular pots by rounding up your spending to the nearest pound. These specific pots don't earn any interest, however, Monzo has two types of savings pots:

  • Easy Access Savings Pot
  • Fixed Savings Pot

The Easy Access Savings Pot allows you to earn up to 0.30% interest and withdraw the money the next working day. To open one of these pots you need a minimum of £10 deposit. There is also the option to open an ISA, however this has been temporarily paused and you can request to be notified once new rates have been released.

The Fixed Savings Pot allows you to earn up to 0.58% in interest but there are limitations on when you can access the money. The earliest being 3 months after depositing the money and the longest being 12 months in which you are unable to add or withdraw any money to the pot.

When using Monzo you can transfer money quickly and get spending notifications and set budgets for different categories with warnings when you come close to your limit.

Payments can be made on the go by linking your account with Apple Pay or Google Pay and the card can be used fee-free – other than the exchange rate - around the world.  You can withdraw up to £200 abroad every 30 days for free and there is a 3% charge after that, there is no charge in the European Economic Area (EEA). Monzo also links up with Transferwise to let users transfer money abroad at a cheaper rate than other banks.

Rather than having to phone a bank call centre if there are issues, customer service is operated through the app via a chat service. If you lose your card you can freeze it in the app and order a new one, or unfreeze it if you end up finding it.

Account holders can also apply for an overdraft, but can currently only borrow a maximum of £3,000. You will be charged a rate of 19%, 29% or 39% EAR dependant on your credit score, but you can check this via the Monzo app before completing the overdraft request. If you don't have an arranged overdraft but happen to go into an unarranged overdraft by mistake, the charges will be capped at £15.50 per month. Monzo says it will always notify its customers before they go into their overdraft and you have until midnight to add money into your account.

Monzo also prides itself on user feedback and has a busy online forum where users can raise concerns or suggest new features. If you decide to use Monzo then make sure you read the forums as it will help you get the best from the product. Being able to influence the development of your bank makes a refreshing change.

Monzo business account

Monzo has been working on introducing its business account for a while, and after months of testing it was open to everyone in early 2020. Below are the key features the Monzo business bank account offers, but for a more in-depth look at Monzo's Business account read our independent review.

  • Free instant UK bank transfers
  • Instant notifications
  • Monzo pots
  • Mobile and web access
  • Additional integrated business tools
  • Digital receipts and in-app invoicing
  • 2 account options, Pro a paid for option at £5 per month or Lite a free business account

Monzo 16-17 account

Monzo has an account specifically for teenagers that gives them all of the freedom of an adult bank account with blocks on age-related spending. The key features of the Monzo 'teen' account are listed below:

  • Contactless Mastercard debit card
  • Apple/Google Pay
  • Spending notifications
  • Spending budgets
  • Split bills
  • Fee free spending abroad (the same limits apply as the personal account)
  • No overdraft

How do I apply for an account?

You need to be a UK resident to get a Monzo card but it is working on offering accounts internationally in the future. There is currently a waitlist for Monzo USA. You also need to be age 16 or over to get a card, which may also be lowered in the future.

There are no Monzo branches. The only way to get a Monzo current account is through your smartphone. You will need to download the app on either an Apple or Android device.

the monzo package                                         imagine if your bank was better - Monzo

You are met with inspirational messages about better banking and Monzo’s key features as you go through the process of signing up for the app. The first piece of information you need to enter is your email. Monzo will then send you an email so you can verify your account, which sends you back to the app to enter your name and date of birth, address and phone number. You will receive a text message with a verification code from Monzo once you have entered your number.

The app then uses Monzo’s back office anti-money laundering and credit reference systems to verify your identity and you will also need to provide photo ID, such as a driver's licence or passport, plus a five-second selfie video of yourself delivering a message it suggests.

Monzo identity verification                                          setting up a Monzo account

These documents are uploaded, and if approved it will ask where to send your new contactless Mastercard and you can also immediately set up your PIN. You are then officially part of the Monzo revolution and can start setting up your spending alerts and budgeting.

Is Monzo safe to use?

Monzo is fully regulated by the FCA, so like any bank, it has to protect client funds and treat customers fairly. You also get the right to complain to the Financial Ombudsman Service if you are unhappy with how Monzo deals with any issues you raise. You also benefit from Financial Services Compensation Scheme protection on up to £85,000 of your money in a Monzo account, if it goes bust. This limit raises to £170,000 on a joint account.

It would be hard for a scammer to set up a Monzo account on your behalf as they would need to have access to your email and phone to start opening the account. They would also need to complete the two-step verification process which requires having your passport or photo-card driving license plus also providing a selfie video message, which would be hard to fake.

Monzo fees and charges

There are no charges for opening or running a Monzo current account. Payments in the UK, cash withdrawals in the UK and payments abroad are all free – other than the Mastercard standard exchange rate - with no added fees.

If you are withdrawing cash abroad you will only be charged a 3% fee outside the EEA once you take out more than £200 in a 30 day period. The only time you may incur a fee in the UK is if you have a Monzo overdraft. If you have an arranged overdraft you will be charged a variable rate of 19%, 29% or 39% EAR.

There will also be charges if you are transferring money abroad. Monzo uses Transferwise for international payments, which prides itself on being more transparent and cheaper than banks. For example, to transfer £10 into Euros it costs £0.33 in transaction fees which means TransferWise will convert £9.67 into Euros. Therefore at the current 24 hour guaranteed rate of 1.10053 the recipient receives €10.64. On the TransferWise site you can compare the cost to other banks, and in this case it admits it isn't cheaper than some of the other banks as they don't charge a transfer fee.

Get a loan with Monzo

Monzo has now launched loans to everyone who is eligible and users can apply for a loan via the app. Monzo asks you three questions to determine your borrowing amount without affecting your credit rating. Monzo promises transparency and more control with less hassle.

Monzo loan benefits:

  • 5-minute application
  • Receive the loan on the same day as you apply
  • No fees for paying off your loan early
  • 24/7 chat or phone support
  • 26.6% APR on loans up to £3,000

It is worth remembering that, as with all loans, the APR is a representative example and may not be the exact rate that you are offered. Monzo says that you are able to find out your personal rate before you apply.

Monzo loans are only currently available on personal current accounts.

Switch to a better energy deal with Monzo

It is now possible to switch to a better energy deal with Monzo by simply clicking a button within the mobile banking app. Monzo has partnered with OVO Energy and Octopus Energy, suppliers that offer competitive pricing and good customer service. OVO Energy was rated uSwitch energy supplier of the year and Octopus energy was rated energy supplier of the year by Which?

Switching is simple, once you click the switch energy message on the home page you will need to provide the following information:

  • Energy types (gas and electricity/just electricity)
  • Number of bedrooms
  • Meter type

Once you have answered the questions above you will be given a quote. If you provide meter readings/energy usage then the quote you receive will be more accurate. Once you have selected the quote you wish to proceed with, you can choose which Monzo account you would like to pay from. That's it, everything else will be sorted for you.

If your energy contract is not yet up for renewal, you can set a reminder to review the tariff when you are ready to renew. Monzo also claims to keep an eye on the energy market and notify you of any changes so that you can ensure that you are on the best deal after you switch.

Monzo Energy switching exclusions

You cannot switch energy provider with Monzo if:

  • You live in Northern Ireland - as they have their own energy providers that Monzo are not linked with
  • If you have a prepayment meter - the switching process is too tricky, so Monzo advises contacting the suppliers directly through their website instead.

Remortgaging with Monzo

As well as switching to a better energy deal, Monzo is exploring the ability to remortgage with Mojo Mortgages. The new switching service primarily focuses on remortgaging and the system uses Mojo Mortgages' algorithm to search the market for the best deal. It is currently being trialled by 2,000 Monzo users.

You can keep track of the features Monzo is exploring and hoping to introduce via its 'Making Monzo' webpage.

Monzo Plus

Following the failed launch of Monzo plus in April 2019, Monzo Plus has been re-released with new features, a new holographic card and attractive interest rates.

What is Monzo Plus?

Monzo Plus is a subscription account that allows you to take advantage of extra features in addition to the current Monzo bank account. Once you have signed up you must be subscribed for a minimum of 3 months before you can cancel.

Monzo Plus features

  • Holographic card - an exclusive holographic card for Monzo Plus account holders
  • Multiple bank accounts - add all of your bank accounts and credit cards so they are visible within the Monzo app
  • Virtual online cards - create up to 5 online cards for purchases when shopping online
  • Improved categorisation - enhance your budgeting and categorisation with custom categories, the ability to divide transactions into groups and the function to auto-export transactions
  • Earn interest - earn up to 1% AER on balances up to £2,000 in your pots and main account
  • Fee-free cash withdrawals - withdraw up to £400 cash abroad fee-free every 30 days (£200 more than with a regular Monzo account)
  • Roundups - save up to 2, 5 or 10 times more with automatic roundups
  • Credit Score - regularly check on your credit score in the app with TransUnion
  • Rewards - get rewards and discounts with certain brands such as HelloFresh and Fiit
  • Free cash deposits - 1 free cash deposit a month at PayPoints across the UK

Monzo Plus is no doubt an attempt to challenge rival high street banks as well as the likes of Revolut, however, I feel like it needs to offer more original features to make it worth the £5 monthly charge.

Monzo Bank Customer Reviews

The bank has a strong following and is rated as 'Excellent' on Trustpilot with 4.5 out of 5.0 stars, with over 8,800 reviews. Most of its reviews, 80%, rate the challenger bank as excellent, citing a good user experience and helpful budgeting features. However, 12% of reviewers rate it as bad, citing poor experiences with its live chat customer service and issues with accounts being closed.

Monzo Bank Alternatives

Monzo vs Revolut

There are a few challengers to Monzo’s banking app crown. Revolut, offers free card transactions in 120 countries, fee-free transfers at the interbank rate in 23 currencies and free ATM withdrawals up to £200 a month followed by a 2% fee, which is slightly cheaper than Monzo. You can also buy Bitcoin, Litecoin and Ethereum cryptocurrencies through the Revolut app. It has a basic free package as well as £6.99 or £12.99 monthly packages offering extras such as higher withdrawal limits, overseas medical insurance and concierge services.

Monzo vs Starling Bank

Starling is probably Monzo’s closest rival. It lets you set savings goals and even offers interest on your balance at 0.05% up to balances of £85,000. Starling also offers an in-app Marketplace so users can access other financial services and you can apply for a bigger loan than you can with Monzo. It is slightly ahead for entrepreneurs, offering a business account, however Monzo finally released its business account earlier this year.

Monzo’s app is slightly more intuitive and will inform you when your spending is getting too close to a set budget.

Monzo pros & cons


  • Easy to set up
  • Good for budgeting
  • Fee-free spending abroad
  • Automatic saving
  • Overdraft and Loans
  • Competitive saving interest rates


  • Daily withdrawal and spending limits (see below table)
  • App-only - requires internet and no bank branches
  • £1 fee for depositing cash at a local PayPoint
  • Can only deposit a maximum of £1,000 cash every 6 months (£500 if you are 16-17)

Monzo takes the hassle of setting up a current account. You don’t need to worry about finding a branch, making an appointment or printing and completing complicated paperwork. The whole process is managed quickly through an app at any time of day plus you can link it with Apple, Google and Samsung Pay so you can make payments easily both with your phone or the contactless debit card.

You get your own bank to carry around in your pocket as well as help with money management through its spending alerts and savings tools, and what’s more, you can use it around the world for free.

There are some limiting factors though. Monzo has a daily withdrawal limit of £400, which is a lot of money but there may be cases where you require more and there are no branches you can walk into for such a request. Monzo does consider one-off extensions though.

You can deposit cash with Monzo at any PayPoint location across the UK, but you will be charged a £1 fee. For example, if you deposit £10, only £9 will reach your bank account. Monzo only allows you to deposit between £5-£300 at any one time and a maximum of £1,000 every 6 months. This reduces to £500 every 6 months if you are 16 or 17 years old.

Monzo does help you save money with its Pots tools, but you won’t be able to earn any actual interest on this money unless you have over £500 for a Fixed Savings Pot or £10 for an Easy Access Savings Pot, so it may be that some of your funds could be better used elsewhere. Starling Bank for example, allows you to set up savings pots (titled 'spaces') in which you earn interest on everything.

Monzo spending limits

Monzo has set specific spending limits on an account and these can vary between each individual. Currently, the average limits are as follows:

Daily Monthly
Card transactions £10,000 N/A
Contactless until PIN is required £100 N/A
ATM withdrawals £400 £5,500
ATM withdrawals outside EEA
N/A £200
Bank transfer £10,000 N/A
Transfer to Monzo contacts £10,000 N/A limit N/A £1,000
Cash deposits N/A
£1,000 every 6 months
Bank transfer Unlimited Unlimited


Monzo has become one of the leading challenger brands and app-only banks. Its app is simple to use and has great functionality but does suffer from occasional technical issues and bugs. In August 2019, Monzo urged 480,000 customers to change their password pin's after a bug allowed unauthorised staff to have access to them for a period of 6 months. It did, however, reassure customers that there were no recorded instances of fraud. This followed an outage that occurred in July 2019 which saw users unable to access their funds for a few hours, the second such incident in a matter of months.

Although it has experienced some teething issues in the past, Monzo appears to be upfront with its customers and updates them regularly through its website blog and app.

Overall it is a handy app that makes banking far more friendly, understandable and approachable. Viva la revolution!


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