Starling bank review: The best place to put your money?

24 min Read Published: 18 May 2020

Starling bank review: The best place to put your money?

What is Starling Bank?

Banking is gradually being dragged into the 21st century thanks to a swathe of app-only challenger brands. Starling Bank is among the best-known new brands. It received its banking licence in 2016 and unveiled the UK's first mobile-only current account in 2017.

Starling Bank's founder, Anne Boden brings a strong banking pedigree, having helped create the UK’s CHAPS real-time payment system and she has worked for big brands such as Lloyds and Allied Irish Bank.

Starling Bank has a different approach to old-school banking. The idea is to provide everything you want from a full UK bank account but none of the stuff you don’t. They have decided this means you don’t need bank branches but you do get money management tools, a MasterCard contactless debit card and 24/7 support.

So is it worth carrying your bank around in your pocket?

Starling Bank features

  • Freeze your card - freeze your card in-app if lost or stolen
  • Disable/Restrict and block payments - disable chip and pin or contactless payments, restrict online spending and block transactions such as gambling
  • Set up savings goals - earn interest whilst saving towards personal goals
  • Nearby payments - send payments securely to Starling customers nearby
  • Settle up - Easily split payments with a 'settle up' link
  • Instant spending notifications - receive instant real-time notifications when spending
  • Categorised spending - Have your transactions sorted into categories automatically
  • Paperless statements - easily access your statements within the app
  • Round up spending - round up transactions to the nearest pound to save money
  • Free cash withdrawals abroad - (some cash machines charge their own fee)
  • International money transfers - The app can also be used for international money transfers. Users pay a 0.4% transaction fee or can pay a flat rate of £5.50 for a faster payment. This is much cheaper than many banks that can charge up to 5% for international money transfers.
  • No transaction fees - spend abroad for free with no additional charges added or an exchange rate mark up fee
  • Marketplace - integrate your Starling Bank account with other financial products such as mortgages, insurance, pensions and ISAs
  • Mobile cheque deposits - Deposit cheques up to £500 from your mobile phone, simply select 'cheque deposits', take a picture and you are done.
  • Additional 'Connected' card - Users can order an additional card and give it to those who they trust to make purchases on their behalf. Everything can be controlled from the app.

How does Starling Bank work?

Starling Bank offers personal and joint accounts as well as business accounts, which its rival app-only bank Monzo is currently still working on.

Starling Bank personal accounts

You don’t have to phone to make an appointment to visit a branch to open an account, instead, all you need to do is download the app on your smartphone.

You must be aged 16 and a UK resident to get a Starling Bank personal or joint account. Applicants need to download the app on a smartphone and provide a valid photo ID such as a UK passport or driving licence. Starling promises that this process will take around five minutes, which is quicker than having to go into a bank branch during opening hours. There is also an account dedicated to 16-17 year-olds wanting to manage their money.

Similar to traditional accounts, you will get a contactless Mastercard debit card and will be able to set up standing orders and payments and manage direct debits in the app. You can also connect it to your digital wallet such as Apple Pay.

You can make up to six withdrawals per day, with a maximum total withdrawal per day of £300 and can deposit cash at more than 11,500 Post Office branches nationwide up to a maximum of £20,000 each time.

Starling Bank provides an optional overdraft that you can turn on or off within the app, however, this is not currently available on joint accounts. You can reduce the amount you need and are only charged for the amount you borrow. The overdraft fee is an equivalent annual rate (EAR) of 15%, 25% or 35% based on your credit score.

Having everything on the app means you can access your account wherever you are. But this is more than just a current account. Starling Bank will send you real-time balances and instant payment notifications so you can track your spending.

You can access spending insights that give you a breakdown of your spending habits so you can budget better and understand exactly where your money goes. There is a goals section that rounds up your spending so any change can be put towards a big purchase such as a holiday or car. Additionally, any money left in your current account earns 0.05% on balances up to £85,000.

Starling Bank Business accounts

Starling Bank’s business and sole trader account is similar to its personal account. Starling Bank says the application process for its business account is slightly longer than the personal one at around 10 minutes, but in comparison, many banks will require you to make an appointment and sit in a branch for a couple of hours to get approval. Instead, you need to download the app, enter your personal details and information about your business, verify who you are by sending a video and ID documents and wait for credit checks to come through. The bank may have extra queries though so this process may not be as instant as getting the personal account.

There are no fees for a business account, so long as there are fewer than 10 employees and the business has less than £1.7 million annual turnover. Starling does state that larger businesses will only receive free banking for a limited time, however when we spoke to them, no-one was able to tell us what these charges are and when they will be introduced. If you are a larger business then it would be wise to dig a little deeper into the charging structure before you commit.

Starling offers a similar service to the personal account such as payment alerts and will categorise your transactions. Unlike some other business accounts, Starling Bank doesn’t charge monthly fees or for ATM withdrawals. Popular accountancy software tool Xero can also be used in the app and several financial products are currently being added to a business version of its Marketplace. For more information on the accountancy software Xero, read our Xero review.

Business users can deposit money at more than 11,500 Post Office branches if they are paid in cash. Depositing up to £1,000 would cost £3 and anything over that is charged at 0.3%. There are no fees for ATM withdrawals but it will cost £0.50 to withdraw money over the counter at the Post Office.

If you have both a personal and business account you will be able to switch between both within the app.

Both personal and business accounts are part of the Current Account Switching Service so should take a maximum of seven days to switch and the whole process is managed for you, meaning you don’t have to worry about cancelling old payments as all your direct debits should automatically be transferred.

For more information on Starling Bank's business account and how it compares to other business accounts, read our review.

Starling Bank Euro accounts

Starling Bank has launched a Euro account for both its personal and business account holders. The account allows users to hold, send and receive money in both pounds and euros. For more information on the Starling Bank Euro account see our article, 'Starling Bank Euro account-  who should get it?'

Starling Bank personal loans - how do they work?

If you need extra funds, Starling Bank users can apply for personal loans from £500 to £5,000 but you can only do this if you have an active overdraft. The amount you can borrow is linked to however much is still unused in your agreed overdraft so if you have £2,000 left out of a £4,000 overdraft, you’ll be able to turn anything up to £2,000 into a loan. This, in turn, reduces your overdraft.

Starling Bank offers customers two types of loans, 'Spread the cost' and 'Apply beforehand'. The 'Apply beforehand' loan works like any regular bank loan and you apply for the amount you need before you make a purchase. The 'Spread the cost' loan works slightly differently in that you purchase an item and choose to spread the cost after you have bought it.

Rates are 11% to 14.5%, which is cheaper than Starling’s overdraft fee but by no means the lowest loan rate on the market. Starling responded by saying 'Since we released Loans, some of our customers have told us that they’ve found cheaper rates elsewhere. And we can’t deny that. But what we’d like to make clear is that when you see those very low rates, it’s usually a very best case scenario, and most of the time what you’ll actually get won’t look anything like that. We’re much more transparent about what we offer. We don’t skew our figures to entice more customers or use wildly low rates as a ‘hook’, and whilst we can’t justify unsustainable rates like 2%, your rate should always settle at around 11.5%'.

Starling Bank marketplace - access to financial services and insurance products

The offering doesn’t stop there. Users can also access other financial services on the app through the Starling Bank Marketplace such as Wealthify, Wealthsimple and PensionBee in savings and investment or mortgage broker Habito.

In July 2019 Starling introduced a new partnership with CreditLadder. Customers who use their Starling account in order to pay their rent can choose to share their information with CreditLadder, a company that will collect and store the data, building up a history of on-time payments. The idea is that it will increase credit scores which will in-turn help to boost the customer's chances of being able to buy their own home.

In addition to financial services, Starling also offers a range of insurance products through the Starling Bank Marketplace, including life insurance, home insurance and mobile phone insurance. Anorak is the chosen life insurance partner, Churchill can provide home insurance cover and so-sure provides mobile phone insurance.

Is it easy to close my Starling bank account?

Closing your account is pretty simple, especially as there are no monthly fees.  You just need to contact customer services through the app. If you have a positive balance on your account you need to transfer this or Starling Bank can send a cheque for the outstanding balance. You will need to cancel all payment instructions, debit debits and standing orders you have on your account. Your account will remain open if you are still overdrawn and you will be expected to repay any funds.

How does Starling Bank make money?

Starling Bank still needs to make money to survive, although it argues that it doesn’t need to charge as much or often as banks due to it not having the same sort of overheads. There are no branch costs and it has a much smaller product range to manage. Most of its services are free, but there are still ways it is taking income. It will get a fee or commission when customers sign up to some of the recommendations on its Marketplace.

Starling Bank will also earn interest on overdrafts and loans it provides as well as taking a share of the small fee a shop pays to cover each time a card transaction is made, this is known as interchange income. Like all banks, it will earn treasury income on excess deposits it isn’t lending that is held at the Bank of England.

How much does Starling Bank cost?

There are no fees for a Starling Bank account, plus no charges when travelling abroad. Remember you will still need to pay the exchange rate on international withdrawals or transactions though. This will be set by MasterCard if you pay in the local currency or will be applied by the business if you are paying in sterling.

The only fees personal users will see will be if they have an overdraft, which charges an EAR of 15%, 25% or 35% (dependent on your credit score). Interest is accrued daily, charged monthly and it’s all updated in your app. If your total overdraft interest charges are less than 10p at the end of any given month, Starling Bank will waive your interest charge for that month.

Business users have to pay for Post Office withdrawals and deposits, as well as a £2 monthly fee for a Business Euro account should they wish to open one.

Is Starling Bank safe to use?

Starling Bank is regulated like any bank by the Financial Conduct Authority. This means it must adhere to strict rules on protecting client money and treating customers fairly. Users also receive protection under the Financial Services Compensation Scheme, meaning up to £85,000 (£170,000 on joint accounts) of your cash will be secure if the bank goes bust. Being regulated also gives you the right to complain to the Financial Ombudsman Service if you are unhappy with how it has addressed any issues you raise.

Starling Bank says it uses advanced data encryption and storing technologies that ensure your personal information and transactions are sent and stored securely. It has acted fast in recent years to warn customers when there have been high profile data breaches of customer data at big brands such as British Airways and Marriott Hotels. But it did say it was reviewing its procedures at the end of 2018 after a customer expressed concern that a link Starling Bank sent to his photo ID could easily be accessed by others.

Starling Bank Customer Reviews

Starling Bank has been voted best British bank and best current account provider at the British Bank Awards in 2018, 2019 and 2020.

Starling Bank uses Trustpilot for its customer reviews and displays them on its website. It has 4.5 out of 5.0 stars based on more than 11,500 reviews and is rated as 'Excellent'. Most users like the budgeting tools and the free international transfers and withdrawals. A small proportion, 8% of reviews, described the bank’s service as bad, compared with 77% who deem it excellent. The main issues were concerns around payments being taken without permission and accounts not being closed when requested.

Starling Bank Alternatives

Starling Bank vs Monzo

Starling Bank’s biggest rival is Monzo. The setup is pretty similar, with both requiring signups solely through the app and taking minutes to complete. Starling has a bigger product range, offering personal, joint and business accounts, while Monzo currently only offers one current account for individuals.

Similar to Starling Bank, Monzo users pay nothing for overseas ATM withdrawals, but this is capped at £200 a month and there is a 3% charge after that.

Unlike Monzo, Starling Bank has a decent perk in the interest it offers on current account balances. It may be low at just 0.05% on balances up to £85,000, but it is better than nothing. Monzo doesn't pay any interest on its current account but you can earn up to 1.15% in some of the savings pots.

Monzo charges 19%, 29% or 39% EAR in overdraft fees for each day you are overdrawn compared to the 15%, 25% or 35% EAR that Starling Bank charges, both Monzo's and Starling Bank's rates are dependant on your credit score. However, you can only have a maximum overdraft of £3,000 with Monzo, whereas you can have an overdraft up to £5,000 with Starling Bank (credit check dependant).

Both have similar features such as payment alerts, categorisation and budgeting, but Monzo goes one further by letting you set specific budgets for different types of spending and warns you when you are close to your limit.

Starling Bank vs Monese

Another option is Monese, which has also been around since 2016 and is available to all European Economic Area residents, rather than just Starling Bank’s approach of only offering it to Brits. Its main benefit is free currency exchange and money transfers as it doesn’t offer budgeting or payment alerts. It is worth noting though that while Starling Bank and Monzo are free, Monese has introduced a £4.95 monthly charge if you want free ATM withdrawals.

Conclusion - Starling Bank review: The best place to put your money?

Pros of Starling Bank

  • Fast and easy to set up
  • 24/7 access
  • Spending alerts and categorisation
  • Fee-free spending abroad
  • No monthly fee for the services
  • Safe and secure

Cons of Starling Bank

  • The Marketplace only offers deals with companies Starling works with so they may not be the best rate
  • Loan rate is high in comparison to other banks
  • App-only means you rely on the internet or smartphone for access to your bank
  • Can only open if you are a UK resident


Starling Bank has built a bank fit for the 21st century that you can access whenever you want without having to find a bank branch. It is also doing its bit for the savings culture by encouraging users to save their spare change and introducing people to other financial services offerings such as investing and budgeting tools through its Marketplace that they may never have previously heard of. It also continues to innovate and even protects customers with gambling addictions by allowing them to block gambling transactions.

Starling Bank’s approach is innovative as it is providing both a bank that fits into your pocket but also an app that can boost your whole lifestyle. Its only limit may be that the innovation it has created becomes useless if you run out of battery or have no reception or wi-fi. But on the flipside, it is open 24hours a day unlike a high street bank. Overall it is not surprising Starling Bank has won so many plaudits.


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