Starling Vs Monzo 2024 [Fees, Security, Speed, Rewards & Rates]

In today's digital age, mobile banking has become increasingly popular among consumers as a quick and convenient way to manage their finances. Starling and Monzo are two of the leading neobanks in the UK that offer digital banking services.

Both banks have much in common, from offering fee-free spending abroad to easy-to-use mobile apps. However, there are also differences between the two platforms that users should consider before deciding which one to use.

In this blog, we will compare Starling vs Monzo to help you understand the similarities, differences, and unique features of each digital bank. Whether you're looking for an app to help you track your spending or manage your finances more efficiently, this comparison guide will help you decide which platform best suits your needs.

Understanding Starling

Starling Bank is a mobile-only bank founded in 2014 by Anne Boden, with its headquarters in London, UK. Offering both personal and business banking services, it aims to provide a seamless banking experience for those who prefer managing their finances using their smartphones.

To get started with Starling, all you need to do is download the app from the App Store or Google Play Store, and follow the account creation process.

Some standout features of Starling Bank include:

• Fee-free spending abroad
• Simple money management tools
• Real-time payment notifications
• Saving Goals for easy budgeting
• Personalized in-app support

To use Starling, you need to follow the below technical steps:

Download The Starling Bank App

Search for "Starling Bank" on the App Store or Google Play Store and download the app on your smartphone.

Sign Up For An Account

Enter your personal details, such as your name, date of birth, address, and national insurance number, to create an account. You'll also need to provide a form of identification, such as your passport or driver's license.

Verify Your Identity

The app will ask you to take a photo of your identification document and a selfie for facial recognition. The app uses these to verify your identity and ensure that you're the account holder.

Add Money To Your Account

You can add money to your account by linking your debit card or bank account and transferring funds. You can also set up direct debits or receive payments from others.

Start Using The App

The Starling Bank app offers a range of features, including real-time notifications of your spending, budgeting tools, fee-free foreign currency transactions, and more. You can also open a savings account, apply for a loan, or set up a business account through the app.

Customize Your Account

You can customize your account by setting up your preferences, such as daily spending limit, transaction notifications, and alerts for upcoming bills.

Understanding Monzo

Monzo is another mobile-only bank operating in the UK, founded in 2015 by Tom Blomfield, Jonas Huckestein, and Paul Rippon. Their goal is to provide a user-friendly, efficient banking experience for people using their smartphones. T

o start using Monzo, simply download the app from the App Store or Google Play Store and follow the registration process.

Key features that make Monzo stand out are:

• Savings Pots for automated savings
• Instant spending notifications and budgeting tools
• Bill splitting with friends
• Fee-free spending abroad up to certain limits
• Personalized in-app support and community forum

Opening A Monzo Account

Opening a Monzo account is a simple process that can be completed online via their website or mobile app. Here are the step-by-step instructions:

• Download the Monzo app from the App Store or Google Play Store.
• Open the app and tap "Sign Up."
• Enter your email address and create a password.
• Verify your email address by clicking on the link sent to your inbox.
• Provide your personal details, including your full name, date of birth, and residential address.
• Verify your identity by uploading a photo of your government-issued ID, such as a passport or driver's license.
• Add your initial deposit by linking your bank account or debit card. You can deposit as little as £5 or as much as £10,000.
• Wait for your Monzo debit card to arrive in the mail, which usually takes 3-5 business days.
• Activate your card by following the instructions provided in the app.

Starling vs Monzo

Now, we'll dive into an in-depth comparison between these popular banks, exploring their features, fees, and services to help you determine which one suits your financial needs better.

Fees

When it comes to fees, both Starling and Monzo are known for their fee-free banking. However, there are some differences in the fees associated with their accounts. Here are some of the key similarities and differences between Starling and Monzo in terms of fees:

• Overdraft Fees - Both banks charge interest on overdrafts, but Starling has a lower interest rate than Monzo. Starling's overdraft interest rate is 15% EAR (variable) for arranged overdrafts up to £2,000 and 35% EAR (variable) for overdrafts over £2,000. Monzo's overdraft interest rate is 19%, with no distinction between arranged and unarranged overdrafts.
• Foreign Transaction Fees - Both banks offer fee-free spending abroad, but Monzo has a more generous allowance for foreign cash withdrawals. Monzo allows users to withdraw up to £200 per month fee-free, after which a fee of 3% applies. Starling allows users to withdraw up to £300 per day fee-free, after which a fee of 2% applies.
• Replacement Card Fees - Both banks offer fee-free replacement cards, but Monzo charges a fee for express delivery. Monzo charges £5 for express delivery of a replacement card, while Starling does not charge for this service.
• Other Fees - Both banks do not charge fees for using their services, such as for setting up direct debits or standing orders. However, Monzo charges a fee for some services, such as cash deposits at PayPoints or Post Offices. The fee is 3% of the deposit amount, with a minimum fee of £1.

Security

Both Monzo and Starling are online banks that place a strong emphasis on security. They have implemented several security features to protect their customers' accounts and personal data. Here are some of the similarities and differences between Monzo and Starling in terms of security:

• Two-Factor Authentication (2FA) - Monzo and Starling use 2FA to help prevent unauthorized access to their customers' accounts. This means that users need to provide a second form of identification, such as a code sent to their phone, in addition to their password.
• Contactless Debit Cards - Both Monzo and Starling offer contactless debit cards that can be locked and unlocked from within the mobile app. This feature helps to prevent card fraud if the card is lost or stolen.
• Real-Time Notifications - Both banks send real-time notifications to their customers' mobile devices for any transactions made with their debit cards. This helps users to quickly detect and report any suspicious activity on their accounts.
• Encryption - Monzo and Starling use encryption to protect their customers' data. Monzo uses end-to-end encryption for all communications between the app and its servers, while Starling uses 256-bit encryption to protect all data sent between the bank and its customers.
• Biometric Authentication - Both banks support biometric authentication methods, such as fingerprint and face recognition, to provide an additional layer of security when logging into the mobile app.

Monzo offers a feature called "Freeze Card," which allows users to temporarily freeze their card in case it's lost or stolen, while Starling offers a feature called "Settle Up," which allows users to split bills and send money to friends easily.

Exchange Rates

• Starling and Monzo offer fee-free spending and withdrawals abroad, and they also offer very competitive exchange rates for foreign transactions. Here are some key similarities and differences between Starling and Monzo in terms of exchange rates:
• Real-time exchange rates - Starling and Monzo use the Mastercard exchange rate for foreign transactions. This is updated in real-time, meaning customers always get the most up-to-date exchange rate when using their debit card abroad.
• Fee-free spending abroad - Both banks offer fee-free spending abroad, which means that customers can use their debit card abroad without incurring any additional charges.
• Fee-free ATM withdrawals abroad - Their Card offers fee-free ATM withdrawals abroad up to a certain amount per day. Monzo allows users to withdraw up to £200 per month fee-free, after which a fee of 3% applies. Starling allows users to withdraw up to £300 per day fee-free, after which a fee of 2% applies.
• International money transfers - Both banks also offer international money transfers, which can be done using the app. The exchange rate used for these transfers is also very competitive.

Comparing Starling and Monzo Cards

When comparing the Starling and Monzo cards, there are a few important factors to consider, such as fees, interest rates, and limits.

• Fees: Both Starling and Monzo offer fee-free spending for domestic purchases. For international transactions, Starling provides fee-free spending abroad without any limit, whereas Monzo offers fee-free transactions up to £200 per 30 days followed by a 3% charge on further transactions.

• Interest: Neither bank currently pays interest on card balances. Interest can be earned on savings held with them via external partner integrations (such as Easy Access accounts).
• ATM Withdrawals: Starling is more generous with ATM withdrawal limits abroad. They offer unlimited free ATM withdrawals overseas, while Monzo has a £200 per 30 days limit, after which users are charged 3%.

• Overdrafts: Overdraft facilities are available at both banks; however, their fees differ. Starling's overdraft fees range from 15%-35% EAR, while Monzo charges a fixed rate of 19%, 29%, or 39% EAR, based on individual assessments.

Transfer And Payment Options

In terms of transfer and payment options, both Starling and Monzo offer a range of features and services that make it easy for customers to manage their money. Here are some key similarities and differences between the two banks:

• Domestic transfers - Both Starling and Monzo allow customers to make domestic transfers, either through their app or online banking portal. These transfers are usually processed instantly and are free of charge.
• International transfers - International transfers can be done through the app or online banking portal. However, Monzo charges a fee for international transfers, while Starling does not.
• Direct Debits and Standing Orders - Starling and Monzo allow customers to set up Direct Debits and Standing Orders, which can be done through the app. These are free of charge and can be managed easily.
• Payment options - Both banks offer a range of payment options, including Apple Pay, Google Pay, and Samsung Pay. This makes it easy for customers to make payments using their mobile devices without the need for debit cards.
• Requesting payments - Customers of Starling and Monzo can use their app to request payments from friends and family. The payment is typically processed instantly.

Rewards

Both Starling and Monzo offer unique features and rewards for their customers, but their approaches and focus are slightly different. Here is a comparison of their rewards programs:

• Cashback - Monzo offers a cashback program called "Monzo Plus," which gives customers cashback on purchases from certain retailers, such as Booking.com and Sainsbury's. Starling, however, does not currently offer a cashback program.
• Savings and Interest - Both banks offer interest on their savings accounts, with Monzo offering a higher interest rate of up to 1.50% AER compared to Starling's 0.05% AER. Monzo also offers a feature called "Coin Jar," which rounds up purchases and saves the difference automatically. Starling, on the other hand, offers a unique feature called "Goals," which allows customers to set savings goals and track their progress.
• Other Rewards - Monzo offers other rewards and benefits, such as travel insurance, mobile phone insurance, and discounts on various services through its "Monzo Plus" subscription service. Starling, on the other hand, offers fee-free foreign currency transactions and other features such as real-time notifications, a user-friendly app, and budgeting tools.

Regulatory Compliance

Starling Bank has a full banking license from the UK Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), which means it is regulated as a full-fledged bank.

This also means that all deposits made with Starling are protected by the Financial Services Compensation Scheme (FSCS), up to £85,000 per customer. In addition, Starling has implemented strict security measures, such as two-factor authentication and biometric login, to protect its customers' accounts.

Monzo, on the other hand, also has a full banking license from the PRA and FCA and is regulated as a bank. Similar to Starling, all deposits made with Monzo are protected by the FSCS, up to £85,000 per customer.

Monzo has also implemented security measures such as two-factor authentication and biometric login to protect its customers' accounts.

Speed

Both Starling and Monzo are known for their fast and efficient banking services, but there are some differences in terms of speed:

• Account Opening - Starling and Monzo offer fast and straightforward account opening processes that can be completed entirely through their mobile apps. However, Monzo's account opening process may be slightly faster, as the app can sometimes approve accounts within minutes of application, whereas Starling's approval process may take a little longer.
• Transactions - Both banks offer instant notifications of transactions and a real-time view of account balances through their mobile apps, making it easy to monitor and manage finances on the go. Both banks also offer fast and reliable payments through their apps, with most payments processing instantly. However, Starling may have a slight edge in terms of speed, as the bank uses the Faster Payments Service, which allows for near-instant bank transfers.
• Customer Service - Both Starling and Monzo banks offer 24/7 customer support through their apps, with live chat available for quick responses to customer queries. Monzo also offers a phone line for support, whereas Starling relies entirely on in-app support. Both banks are known for their excellent customer service and fast response times.

Account

• Current Accounts - Starling and Monzo offer current personal accounts with features such as instant notifications, real-time balance updates, and fee-free spending abroad. However, there are some differences in terms of fees and interest rates. Monzo offers a fee-free overdraft up to £1,000 (depending on eligibility), whereas Starling charges interest on overdrafts. Additionally, Monzo offers a 1.50% AER interest rate on account balances up to £1,000, while Starling offers a 0.05% AER interest rate on all balances.
• Savings Accounts - Both banks offer savings accounts that can be accessed through their mobile apps. Monzo offers fixed-term savings account with competitive interest rates, while Starling offers a personal savings account with a variable interest rate. Starling also offers a feature called "Goals," which allows users to create separate savings goals within their accounts.
• Business Accounts - Starling offers business accounts for small and medium-sized enterprises with features such as invoicing, expense management, and accounting integrations. Monzo does not currently offer business accounts, although they have indicated they may offer them.

Starling and Monzo offer a range of innovative features and benefits for their customers, with some differences in account options, rewards programs, and ATM networks. It's worth considering your individual needs and preferences when choosing between the two banks.

Customer Support & User Experience

When it comes to customer support, both Starling and Monzo offer reliable in-app messaging services. While response times may vary depending on the complexity of the inquiry, customers typically appreciate the convenience of getting assistance right from their smartphones.

Starling Bank also offers telephone support for those who prefer to speak with customer service representatives. Monzo does not provide direct phone support but encourages users to reach out via their in-app chat or email for any queries.

UI/UX Evaluation for Their Respective Mobile Apps

In terms of user experience, both Starling and Monzo have well-designed, intuitive apps that make managing finances stress-free.

Starling's app is known for its clean interface, making it easy to navigate through various banking features and access spending analytics. Users can set up saving goals, monitor their account balance, and personalize categorization with ease.

On the other hand, Monzo's app focuses heavily on budgeting tools and personal finance management features. With a visually appealing layout, users can quickly create Savings Pots or track expenses through detailed breakdowns across spending categories.

FAQs Regarding Starling Vs Monzo

Conclusion

Both Starling and Monzo are innovative digital banks that offer a range of features and benefits to their customers. While there are some similarities between the two banks, there are also some key differences to consider.

Starling offers business banking services and a unique "Spending Insights" rewards program, while Monzo offers a larger network of free ATMs and a rewards program called Monzo Plus.

Ultimately, the winner between Starling vs Monzo will depend on your individual needs and preferences. Whether you prioritize fee-free spending abroad, personalized savings advice, or access to a larger ATM network, both banks offer a range of options to help you manage your money effectively.