I recently opened an account with Monzo – the idea of an account with a bank that had no physical branches intrigued me, and I also was attracted by the app that is a major selling point of opening an account with them. Two days after signing up, I received the hot coral card from Monzo, and was excited to go out and use it.
What’s so different about Monzo? Well, it’s a smartphone only bank, challenging the ‘legacy’ banks such as Lloyds and Barclays. Being completely free, anyone can sign up and start a current account with no fees. Monzo has all the benefits of a normal bank – protected money by the FSCS, so your money is safe, interest of 1% on amounts of £1,000, and a few more interesting features that I will detail later in this post.
One thing that surprised me about Monzo was how enthusiastic people are about it – so much so to invest £20 million into it in only an hour, and it’s hard to tell where this enthusiasm comes from. Perhaps it’s the openness of the bank, or the community behind it.
Monzo is a great choice for those looking for a easier, and better, banking experience.
The dynamics of Monzo are interesting, with more than half of it’s users being under 30. This is probably due to the strong budgeting features of Monzo, that allow you to easily save your money, and spend less.
Signing up to Monzo is easy – you just need a form of ID, your phone, and five minutes. After you have gone through the ID verification checks, you’ll have your current account ready, and you’ll receive your card in around two days. Even before receiving your card, you can spend money, through the Apple Pay or Google Pay support. A Monzo account has everything that a normal account would – a sort code, bank number, etc, so you can use it wherever you would use a legacy bank card.
One of the greatest strengths of Monzo is it’s instant notifications of transactions. With my old bank, it was hard to see where my money was going – some of my spending was hidden under a tab to show pending transactions, which weren’t taken out of my balance, and it was hard to understand what was going on with my money. With Monzo, you can easily see where it’s going, and it’s taken out of your balance straight away and a notification is sent to your phone. I love this, and it’s easy to see where I’m spending money, and where I need to cut down if I want to save. In addition, you can sort your feed by shop, person, date, amount of transaction, and tags that you assign to spending to get an even clearer overview. Then, the average amount spent, and the total amount spent, is shown.
Monzo also has a great budgeting system. It allows you to set a monthly goal, or a goal resetting on your payday, and set budgets for categories of spending. Each transaction is assigned a category, which you can change yourself, and you can set budgets on categories – for example, a budget on entertainment if you don’t want to spend too much on games. This is another great feature, as you can see how much you are spending, and adjust your spending accordingly. If you make a one of purchase, such as a car or a large spend that you don’t typically do, you can remove it from your summary. You can also view amount earn, spent, and put into pots (more on pots in the next paragraph) at the top of the app.
Pots are one of my favourite features of Monzo. They allow you to save easily, and represent a different pool of money that is separate from your current account balance. In the account screen, you can view your total account balance, and also your pots. Think of pots as separate saving accounts, which you can easily add and withdraw from. If you are saving up, you can lock these pots until a certain date in order to make it easier to save.
Monzo has an outstanding feature where you can round up transactions to the nearest pound, and then put the change into a pot. Let’s say I purchased something for £1.50. This transaction would be rounded up to £2, and 50p would be moved to my pot. This makes it really easy to save, as small amounts often don’t mean too much in the short run, but in the long run it’s a big difference.
Getting money into and out of Monzo is easy too. You can transfer money via bank transfer, so you can transfer to people who do not use Monzo, and you can transfer from a legacy bank into Monzo. Monzo also allows you to request money with a monzo.me link – this you can send to a person who owes you some money, and you can request a certain amount for them to pay. Even if they don’t have a Monzo account, they can still use their bank to pay you1. A feature is also in the works that allows you to send a link to a person, who can then redeem your money – for example, I owe a friend £10, so I can send them a link which allows them to add £10 to their account.
If your friend has Monzo, everything is made a lot easier – you can split bills, share tabs, and so much more. I haven’t tried these features however, as none of my friends are on Monzo. It’s incredibly easy to get money into and out of Monzo.
Of course, the whole app is free. Monzo offer an overdraft to eligible people, however I have not and will not use this so I cannot advice on it. In addition, they allow you to withdraw cash for free from ATMs in the UK, and up to £200 for free a month in foreign countries, which is great for people that travel a lot. It also alerts you what the approximate exchange rate is.
The Monzo site has a great overview on their accounts, and you can view it here.
I’ve been using Monzo for two months now, and I love it. I’m more in control of my money than I ever have been, and I know where I am spending and where I can cut back if I want to save.
Monzo is offering £5 to those who join via this link, and spend using their card.
You can also join without a referral link via the Monzo website.
- This feature is much like paypal.me. ↩