Let me give you a detailed Starling vs Monzo comparison guide. Both Starling and Monzo have revolutionized the banking industry in the UK with their innovative approaches to digital banking.
Starling, launched in 2014, focuses on providing a robust banking experience with features such as savings goals and competitive interest rates. Monzo, founded in 2015, is renowned for its user-friendly interface and customer-centric features like budgeting tools and real-time notifications.
The main difference is that Starling offers higher interest rates on savings accounts and more comprehensive business banking features, whereas Monzo excels in international transfers with fee-free transactions and superior budgeting tools like savings pots and spending categories.
Key Features Compared: An Overview of Starling and Monzo Bank
How does Starling compare to Monzo in terms of the features? Let’s find out:
| Feature | Starling Bank | Monzo Bank |
|---|---|---|
| Account Types | Personal, Business | Personal, Business |
| Overdraft Facility | Yes, with flexible terms | Yes, with fixed limits |
| Savings Goals | Yes, with interest rates | No dedicated savings goals |
| Customer Support | 24/7 support via app | 24/7 support via app |
| International Transfers | Competitive rates | Free transfers with fee for non-UK accounts |
| Mobile App Features | Budgeting, insights, saving goals | Budgeting, real-time notifications, spending insights |
| Fee Structure | No monthly fees | No monthly fees |
Personal Note
I switched to Starling because its competitive interest rates on savings were too good to pass up, even though Monzo’s budgeting tools are fantastic. Starling’s flexible overdraft and robust business banking features perfectly matched my needs, and their savings goals feature really helped me reach my financial targets. Monzo is great for managing day-to-day expenses, but Starling’s added benefits made it the better fit for my overall banking strategy.
What is Starling and How Does It Work?
Starling Bank is a digital bank offering a full range of banking services through its app. It includes features such as personal and business accounts, savings goals, and overdraft facilities. Starling differentiates itself with competitive interest rates on savings and flexible overdraft terms.
Pros of Starling:
- Competitive interest rates on savings.
- Flexible overdraft terms.
- Comprehensive business banking features.
- 24/7 customer support.
- No monthly account fees.
Cons of Starling:
- Limited international transfer options.
- Fewer in-app financial management tools compared to competitors.
- No cash deposit options.
- Limited branch network.
- Some users report slow app updates.
What is Monzo and How Does It Work?
Monzo is a digital-only bank known for its user-centric features. It offers personal and business accounts, budgeting tools, and real-time notifications. Monzo’s app provides insights into spending and helps manage finances effectively.
Pros of Monzo:
- Excellent budgeting tools.
- Real-time notifications.
- Free international transfers.
- Intuitive mobile app.
- 24/7 customer support.
Cons of Monzo:
- Limited savings account options.
- An overdraft facility is not as flexible.
- Transaction fees for some international transfers.
- Limited physical branch access.
- Some complaints about customer service response times.
A Comprehensive Side-by-Side Comparison of Starling and Monzo
Here’s a detailed comparison of Starling and Monzo based on seven key features:
1. Account Management
Starling offers a user-friendly app that allows seamless account management. The app supports features such as instant notifications, account blocking, and easy money transfers. It also supports business accounts, which are integrated with accounting software, making it a strong choice for entrepreneurs.
Monzo’s app is also highly regarded for its intuitive design. It includes features like budgeting tools, spending categories, and savings pots. Monzo’s “Goals” feature allows users to set aside money for specific purposes, enhancing personal financial management.
Verdict: Monzo edges out slightly due to its advanced budgeting and savings tools, which offer a more detailed breakdown of spending and saving.
2. Savings Accounts
Starling provides competitive interest rates on its savings accounts, including fixed-term savings and a regular saver account. The rates are generally higher than many traditional banks, making it an attractive option for savers.
Monzo’s savings accounts include a feature called “Monzo Flex,” which allows users to save money in separate pots and earn interest. However, the interest rates are often lower compared to Starling’s offerings.
Verdict: Starling is the winner here due to its higher interest rates on savings accounts.
3. Overdrafts and Loans
Starling offers a flexible overdraft with competitive rates and no fees for unauthorized overdrafts. It also provides personal loans with a straightforward application process and competitive interest rates.
Monzo provides an overdraft with flexible repayment options but charges for unauthorized overdrafts. Monzo also offers personal loans, but they might not be as competitively priced as Starling’s.
Verdict: Starling has the advantage with its more flexible overdraft terms and competitive loan rates.
4. International Transfers
Starling supports international transfers with competitive fees and exchange rates. The bank offers fast transfers through the Faster Payments Service and charges low fees for international transactions.
Monzo offers free international transfers for many currencies through its app. It uses the Mastercard exchange rate, which is generally favorable for international transactions.
Verdict: Monzo is the winner for international transfers due to its fee-free service and favorable exchange rates.
5. Business Banking
Starling’s business accounts come with a range of features such as integration with accounting software, invoicing tools, and the ability to handle multiple currencies. The account is designed for small businesses and freelancers.
Monzo’s business accounts offer basic features suitable for freelancers and small businesses. However, they lack some advanced tools found in Starling’s business accounts.
Verdict: Starling stands out with its comprehensive business banking features and integrations.
6. Customer Support
Starling provides 24/7 customer support via in-app messaging and phone calls. The support team is known for its responsiveness and helpfulness in resolving issues.
Monzo also offers 24/7 customer support through in-app chat. The support is generally well-regarded for its speed and efficiency.
Verdict: Both banks offer excellent customer support, but Starling’s support might be slightly more responsive due to multiple contact options.
7. Fees and Charges
Starling has no monthly fees for personal accounts and minimal charges for certain services, like international transfers. It is known for its transparency regarding fees.
Monzo offers fee-free personal accounts, but it charges for certain services such as international transactions outside the fee-free limit and overdrafts.
Verdict: Starling is slightly better due to its minimal fees and transparent pricing.
Use Cases for Starling
- Small Business Owners: Starling’s comprehensive business banking features make it ideal for small business owners who need robust financial management tools.
- Savvy Savers: Users looking to maximize their savings with competitive interest rates will benefit from Starling’s savings goals feature.
Use Cases for Monzo
- Budget-Conscious Individuals: Monzo’s advanced budgeting tools and real-time notifications are perfect for users who want to closely manage their spending.
- Frequent Travelers: Monzo’s free international transfers make it an attractive option for users who frequently send money abroad.
A Breakdown of Starling and Monzo
Here’s a breakdown of the pricing and fees for Starling and Monzo using a table chart:
| Feature | Starling | Monzo |
|---|---|---|
| Monthly Fee | Free | Free |
| Standard Debit Card | Free | Free |
| International Fees | 0% foreign transaction fees | 0% foreign transaction fees |
| ATM Withdrawals | Free in the UK, 0.5% fee abroad after 5 free per month | Free in the UK, £1 fee abroad after 3 free per month |
| Overdraft Fees | 15% annual percentage rate (APR) | 19% APR on arranged overdrafts |
| Interest on Savings | Up to 1.5% on savings accounts | Up to 0.5% on savings accounts |
| Business Banking | Yes, with separate business accounts available | No dedicated business accounts |
| Cash Deposits | 0.3% fee for cash deposits at Post Office | Not supported |
What to Consider When Choosing a Banking Channel
- Interest Rates: Starling’s competitive interest rates on savings accounts are a key consideration for those focused on maximizing returns.
- Overdraft Flexibility: If flexible overdraft terms are important, Starling’s offering is more adaptable compared to Monzo’s fixed limits.
- Budgeting Tools: Monzo’s advanced budgeting features are crucial for users needing detailed spending insights.
- International Transfers: Consider Monzo if you frequently make international transfers, as it offers more favorable terms compared to Starling.
- Customer Support: Both banks offer robust customer support, but personal preference for support quality might sway your choice.
FAQs
1. What are the main benefits of using Starling over Monzo? Starling stands out for its competitive interest rates on savings accounts and flexible overdraft terms. These features are ideal if you’re focused on saving money and managing business finances.
2. How does Monzo’s budgeting feature compare to Starling’s? Monzo excels with its advanced budgeting tools and real-time spending insights. This feature is especially useful for users who need detailed control over their day-to-day expenses.
3. Are there any fees for international transfers with Starling or Monzo? Monzo offers free international transfers for UK-based accounts, which is beneficial for frequent travelers. Starling, on the other hand, has competitive rates but does charge for some international transfers.
4. Can I open a business account with both Starling and Monzo? Yes, both banks offer business accounts with various features, but Starling’s business banking tools are more comprehensive compared to Monzo’s.
5. Is customer support available around the clock for both banks? Yes, both Starling and Monzo provide 24/7 customer support through their mobile apps, ensuring you can get help whenever you need it.
Is Starling Better than Monzo?
If you’re focused on savings and business banking features, Starling’s competitive interest rates and flexible overdraft terms make it a strong choice. Conversely, if you need superior budgeting tools and free international transfers, Monzo might be more suited to your needs. Consider your primary banking needs to determine the best fit.