How do you feel about an internet only bank? Well, take a look at my Monzo review to see the advantages (and disadvantages) of going all digital. And, you can earn yourself a free £5.
I’m a little ashamed to admit that I only recently opened my Monzo account. I like to think of myself as slightly ahead of the curve when it comes to technology and banking, but I’ve been a little bit behind here.
Monzo started out in 2015 and initially offered a prepaid debit card and mobile app. But in 2017 they were granted a banking licence and allowed to provide customers with current accounts.
You might be asking why you need another bank account. After all, most traditional banks now allow you to control everything from your phone anyway. Well, Monzo comes with some handy extras.
Monzo comes with a handy budgeting section. Here, you can see a summary of how much money is coming into your account and where it is being spent.
You can also set yourself a monthly budget. This can be an overall amount for the whole month or you can break it down into smaller chunks. For example, you could set yourself a limit of £40 for eating out and £50 for entertainment. Monzo will let you know when you near your limit.
Monzo offers saving pots. This is money put aside from your spending money for whatever reason you wish to save. You can have more than 1 pot, and they all earn interest.
You can either add money directly, or you can use a handy feature, called ’round-ups’. So, if you were to spend £3.20 on a cup of coffee, this is rounded up to £4 and 80 pence is sent to your savings pot.
Another benefit is that you can receive notifications to your phone every time a transaction is made. This is great for keeping an eye out for fraud.
And if something you should lose your card, you can freeze it with a flick of a button.
You can withdraw up to £200 fee free over a 30 day period when you’re away from the UK. And unlike some banks, Monzo won’t charge you an exchange rate fee either.
If you choose to, you can apply for an overdraft of up to £1000 with Monzo. Going £20 into your overdraft and you won’t be charged. Anything over £20 and you are charged 50 pence per day.
Interest on your savings pot is currently 1.12% (June 2019). Although there are plenty of accounts out there that offer far lower than that, you would be able to find a better rate if you shop around.
Another disadvantage to savings pots is that money can’t be spent from there. So if your current account is running low and you don’t have an overdraft, your direct debits and standing orders could be bounced.
The £200 fee-free limit when you’re abroad isn’t the most generous either. Useful for short breaks, I don’t think it will help much for more than a few days. Anything over £200 and you will be charged a 3% fee. Personally, I prefer something like the Halifax card as a better option or you could combine it with Revolut.
My Monzo review conclusion
I like Monzo, I really do. However, there’s not enough there for me to switch away from my main current account. Santander pays me for having direct debits with them and there are other accounts that pay more interest.
But… I’m going to keep my Monzo account open.
If my Monzo review has interested you, use this link to find out more and if you join, we both earn £5 when you make your first payment.