Monzo — can this banking app replace your traditional bank account?
Monzo is a UK-based banking app with a customer base of nearly five million users. Most of the service’s functions are available to UK clients, while some services, such as the Monzo debit card, are available to users in other countries. With Monzo, you can make payments, register for joint accounts and share expenses, signup even if you are a teenager, spend funds abroad, etc. Monzo is also available for business users, especially for entrepreneurs who closely want to monitor their budgets.
What is Monzo?
Monzo offers free and paid accounts; it depends on the account type and card. If you are wondering how does Monzo makes money, If you are willing to pay more, you will have access to more features.
Monzo Lite and Monzo Current Account
Monzo Lite is a free business account whereas Monzo Current is a free account for individuals. Even though these are free accounts, users should be aware that when you choose a PayPoint location to deposit funds into your account, Monzo will pass on a charge of 1 GBP. Besides, it puts a limit on ATM withdrawals abroad, and you can only withdraw 200 GBP per month free of charge. You will face a fee on every ATM withdrawal once you exceed this limit.
As I mentioned earlier the more you pay, the more features you can unlock. You can register for Monzo More which costs 5 GBP per month. It offers several features such as virtual cards, a credit tracker, a holographic card, an increased limit on free withdrawals abroad, a feature to divide payments into various categories for easy spending analysis, advanced roundups, etc. Monzo Plus account holders can make a free deposit every month, and earn 1% gross interest on their balance and savings pots of up to 2000 GBP.
You can also choose a personal premium plan which costs 15 GBP per month. With this account, the overseas withdrawal limit is extended to 600 GBP per month along with five free cash deposits. This plan offers global family travel insurance, smartphone insurance, a metal card, 1.5% interest on account balance, and regular pots (not savings pots) of up to 2000 GBP, and other features.
The premium business account costs around 5 GBP per month and offers great features. First of all, users will have access to all Monzo’s essentials- free overseas spending, a UK current bank account, Google Pay, Apple Pay, budgeting tools, a business debit card, digital receipts, etc. This account can be integrated with other accounting software and offers multi-user access. It allows you to create, send, and track invoices. Business users can also enjoy 6-month free access to Xero. Another great feature is the inclusion of Tax jars to save for your tax returns. For the list of full features, you can visit Monzo’s official website.
Apart from the free and paid personal and business accounts, Monzo offers:
All Monzo current accounts include a contactless debit card; users have the option to choose among blue, white, and hot coral colors. Monzo premium users get a contactless metal card. These physical cards can be used to withdraw cash or pay online anywhere in the world. You can use these cards abroad for free, but you will pay for the MasterCard exchange rate.
Only Monzo Plus and Premium account holders can get the virtual cards. Each card comes with a unique id which makes online shopping safer. It allows you to spend online without reusing the same card details. If the website where you used the card is breached, your bank accounts remain secure. Plus account holders have access to five virtual cards for use at any time. These virtual cards can be created within the Monzo app.
Pros & Cons
- A user-friendly app with many features for saving, managing, and spending funds
- Opportunity to earn interest on a savings account
- Option to create a joint account which is great when one wants to share expenses
- Real-time notifications on your smartphone whenever you spend money
- Budgeting tools to set spending goals and overspending alerts
- Spending abroad without bank charges
- Automatic saving feature to put funds aside in separate pots regularly
- Pay abroad with 0% currency conversion fee
- A member of the non-profit Current Account Switch Service allowing users to transfer their old current account easily
- Block your card directly in the event of loss
- The savings rates aren’t that great, look at other options to find better deals
- It may not be the most affordable service for international exchanges and ATM withdrawals
- Charges users a fee every time they deposit funds in their account through “PayPoint”
- A monthly limit on international ATM withdrawals, and charges a fee when you exceed it
- No credit card
- No desktop version, only mobile app based
Is Monzo Safe?
Monzo is a fully regulated neobank and the clients’ funds are protected up to 85,000 GBP under the Financial Services Clearing System. If anything ever happens to any bank including Monzo under the regime, the clients will not be left with empty pockets.
Besides, Monzo offers many security features such as a user receives instant notifications when a transaction is made. Customers are required to secure their accounts and confirm online transactions via PIN, Touch ID, fingerprint, Face ID. To avoid the issues of bad passwords and phishing, the service does not use passwords. Instead, the users get a link sent to their registered email IDs. They have to use that link to log into the app. Monzo also gives you the freedom to block/unblock your card anytime.
Overall, it appears that Monzo is taking all effective measures to prevent card fraud and stop identity theft.
I covered everything about Monzo, but as a user, only you can decide if Monzo is the perfect banking app for you. Let me recap some important takeaways.
For those who are not UK residents, Monzo may not be the right app for them. I hope that Monzo will operate internationally in the future, but currently, it does not. Monzo offers great features for travelers such as its card can be used for free, travel insurance, etc., but it also puts a limit on overseas withdrawals. You would need to pay a 3% fee for every withdrawal once you surpass that limit. Monzo’s other features such as savings pots and loans are also great, but I am not impressed with the interest rate it offers.
Apart from that, it is a useful app for those looking to share their account with partners, for budgeting and managing their finances. I find its savings features very useful in helping you set up your savings goals and managing cash flow. It also offers other handy features like deposit forecasting, rounding up your transactions, and saving the extra in “Coin Jar.”
As much as I recommend using this app, I also suggest comparing its features and fees with other options listed on Askwallet. If you choose to become a Monzo user, we would love to hear your experience of using this service. If you want to ask any questions, feel free to leave comments and get assistance quickly.