Monzo Review: Should you make the switch?

11 min Read Published: 09 Jan 2023

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 launching 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 now has more than six million customers using its debit card to both manage their money and spend around the world.

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 tracking 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 markup fee
  • Joint accounts - Set up a joint account with another Monzo account holder
  • Overdraft - Set up an arranged overdraft with Monzo. The amount you can borrow will vary depending on your credit file and you will be charged a variable rate of 19%, 29% or 39% EAR
  • Loans - Get a loan up to £25,000 with Monzo
  • Monzo Flex- Monzo has introduced the ability to buy now, pay later in 3, 6 or 12 instalments with Monzo Flex
  • Get paid early - A feature that allows Monzo customers to be paid their salary or student loan a day early. Click here for more information.
  • Shared tabs - split multiple bills and payments between friends and easily keep track of who owes what
  • International transfers - Monzo has partnered with Wise so you can send money internationally with no hidden fees
  • Apple/Google Pay - Pay with your Monzo card on Apple/Google Pay

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.

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.

How do I apply for a Monzo account?

You need to be a UK resident to get a Monzo card but it is working on offering additional international accounts in the future. If you live in the USA you can also sign up for a Monzo account. At present, you 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 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 a photo ID, such as a driver's licence or passport, plus a five-second selfie video of yourself delivering a message it suggests.

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.

Monzo Accounts

You can open both personal and joint accounts with Monzo. If you wish to open a Joint Monzo bank account, both account holders need to have a Monzo current account first. If you already have a joint account and wish to swap over to a Monzo joint account you can do so using the Current Account Switching Service (CASS).

Current Accounts

In the below comparison table, we compare Monzo personal accounts.

Monzo Basic Monzo Plus Monzo Premium
UK current account tick tick tick
Monthly Cost Free £5 £15
Minimum subscription  cross 3 months 6 months
Holographic card cross tick cross
Metal card  cross cross tick
Fee-free spending abroad tick tick tick
Pots tick tick tick
Instant spending notifications tick tick tick
Spending categories tick tick tick
Other bank accounts in Monzo cross tick tick
Custom categories  cross tick tick
Fee-free withdrawals abroad (3% charge thereafter)  £200 £400 £600
Interest on balance and pots (up to £2,000) cross 1.00% 1.50%
Free cash deposits (at Paypoints across the UK) cross 1 5
Round up spending tick tick tick
Advanced roundups cross tick tick
Phone insurance cross cross tick
Travel insurance cross cross tick
Credit tracker cross tick tick
Discounted airport lounge access cross cross tick
Exclusive offers cross tick tick
Auto-export transactions cross tick tick
Apple/Google Pay tick tick tick
FSCS protection tick tick tick

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

Monzo Business account

After months of testing, Monzo's Business account 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 Monzo Business bank account 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

Saving with Monzo

As well as budgeting and money management, Monzo also allows you to save your money. 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 three types of savings pots:

  • Easy Access Savings Pot
  • Flexible ISA
  • Fixed Term Savings Pot

The Easy Access Savings Pot allows you to earn up to 2.16% interest and withdraw the money the next working day. To open one of these pots you need a minimum of £10 deposit.

The Flexible ISA offers a savings rate of 2.00% and the ability to withdraw the money the next working day. You can add money any time and open with a minimum deposit of £10.

The Fixed Savings Pot allows you to earn up to 3.90% in interest but there are limitations on when you can access the money. The earliest being 6 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. To open a fixed savings pot you need a minimum of £500.

Borrowing with Monzo

Monzo Overdraft

Account holders can apply for an overdraft, but can currently only borrow a maximum of £2,000. You will be charged a rate of 19%, 29% or 39% EAR depending 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 loan

Monzo offers 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
  • 11.7% APR on loans between £10,000 and £25,000
  • 26.4% APR on loans up to £10,000

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.

Monzo Flex

Monzo Flex gives customers the ability to spread the cost of purchases over a series of months; 3 months can be interest-free and 6 to 12 months will be charged at a variable interest rate of 24% APR. Monzo will run an eligibility check in the form of a soft search, to see if you can be pre-approved for credit. If you choose to apply for Monzo Flex, a hard credit search will then appear on your credit file and if you miss a payment, your credit score will be affected in the same way as any other loan or credit product. Once you apply you will have a set credit limit which is likely to vary depending on your credit score and you can choose to flex as many payments as you wish as long as it remains within your credit limit.

Monzo Flex can be used wherever you spend with your Monzo card. There is also the ability to 'Flex' any purchases you made in the last 2 weeks. You will not be charged any early repayment fees if you decide to pay the amount off before your instalment plan ends and there is also the ability to edit your instalment plan to pay it over a longer period of time, should you need to. If you miss a Monzo Flex instalment you will have 7 days to make a payment, if you have not paid within 7 days Monzo will try to take a smaller amount and switch you to a longer instalment plan. If Monzo is still unable to take payment it will be reported to the relevant credit reference agencies which is likely to negatively impact your credit score.

For more information on Monzo Flex, read our 'Monzo Flex review'.

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 (exclusions apply) and payments abroad are all free – other than the Mastercard standard exchange rate - with no added fees. 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 uses Wise (formally known as Transferwise) for international payments, which prides itself on being more transparent and cheaper than banks. For example, to transfer £10 into Euros it costs £0.27 in transaction fees which means Wise will convert £9.73 into Euros. Therefore at the current 2 hour guaranteed rate of 1.13520 (on 09/01/23) the recipient receives €11.05. On the Wise site you can compare the cost to other banks, and in this case it admits it isn't always cheaper than some of the other banks as they don't charge a transfer fee.

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 withdrawal limits are higher for premium accounts). For the majority, the only time you may incur a fee in the UK is if you have a Monzo overdraft and if you have an arranged overdraft you will be charged a variable rate of 19%, 29% or 39% EAR. However, in October 2020 Monzo introduced additional fees for some users, details of which are highlighted below.

On 31st October 2020, Monzo introduced new fees for some of its users. Those fees are summarised below:

  • 3% fee if you withdraw more than £250 in 30 days in the UK or EEA
  • £5 fee for replacement cards due to loss

The fee changes mostly affect Monzo users that do not use Monzo as their main bank account or those that withdraw lots of cash or regularly lose their bank cards. If you do any of the following it is unlikely you will be charged:

  • Pay in at least £500 every 35 days and have at least one active direct debit from the account
  • Have a Department for Work and Pensions or Communities payment such as universal credit or state pension paid into Monzo every 35 days
  • Have your student loan paid into a Monzo account every 8 months
  • Share a joint Monzo account with anyone who does any of the above
  • A Monzo Plus account holder

Monzo Bank Customer Reviews

The bank has a strong following and is rated as 'Excellent' on Trustpilot with 4.4 out of 5.0 stars, with over 24,000 reviews. Most of its reviews, 80%, rate the challenger bank as excellent, citing a good user experience and helpful budgeting features. However, 11% of reviewers rate it as bad, citing poor experiences with its live chat customer service and issues with accounts being closed.

Alternatives to Monzo

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 over 30 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 £2.99, £6.99 or £12.99 monthly packages offering extras such as higher withdrawal limits, overseas medical insurance and concierge services.

More information on Revolut can be found in our Revolut review.

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 overdraft than you can with Monzo. It was slightly ahead for entrepreneurs as it offered a business account long before Monzo, however Monzo finally released its business account in early 2020.

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

More information on Starling Bank can be found in our Starling Bank review.

Monzo pros & cons

Monzo Pros

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

Monzo Cons

  • Daily withdrawal and spending limits
  • 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 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. Despite its past teething issues, Monzo appears to be upfront with its customers and updates them regularly through its website blog and app.

Monzo's budgeting features offer great insight into your spending and help you to analyse where your money goes each month. In addition, due to the cost of living crisis, Monzo has also made some of its budgeting features accessible to all accounts, meaning those without a Monzo subscription can also benefit from its main budgeting features.

Overall Monzo is a handy app that makes banking far more friendly, understandable and approachable.