How easy is it to open a Monzo account and is it worth it?

Have you ever wondered what those bright groovy coral debit cards are all about?

What is Monzo?

Monzo is a UK challenger neobank with a customer base of over 3 million. Unlike your traditional high street bank, Monzo does not have physical branches and only operates over a mobile app. Monzo launched in February 2015 and received its full banking licence in April 2017.

How does Monzo work?

Monzo works like any other current account, you apply, they run a few security checks, a soft credit check and you are good to go.

Unlike your traditional high street bank, the application process is fast, convenient, and there are no long forms to fill.

Once your account is open you can manage your entire account through the feature-packed Monzo app.

Is it easy to open a Monzo account?

In short, yes, very easy. You simply download the Monzo app from the Apple app store or Google Play if you own an android device. Once the download has completed simply launch the app, apply by following the simple on-screen instructions and you could have a new Monzo account within a matter of minutes. Once your account has been opened you will receive your new shiny Monzo Mastercard through the post in 2-3 working days.

Can you trust Monzo with your money?

I have been using Monzo for several years and I personally have not had any problems with my money and I don’t know anyone who has, however, there have been several stories accusing Monzo of freezing accounts without an explanation which has left many customers without access to their money. Monzo denied that it unfairly froze customer accounts in the wake of accusations made in a BBC Watchdog report.

Should you be worried?

No, Monzo is regulated by the Financial Conduct Authority and the Prudential Regulation Authority, so your money is 100% safe. You also benefit from the Financial Services Compensation Scheme protection on up to £85,000 of your money if Monzo was ever to go out of business.

Why does Monzo freeze accounts?

According to Monzo, as part of their banking license, they have to follow strict rules, so if they suspect suspicious activity such as anti-money-laundering, counter-terrorism-financing or fraudulent transactions they will act immediately and freeze accounts without warning.

What features can you expect from Monzo?

Monzo’s banking app interface design is fantastic, it’s very easy to use and it’s packed with goodies such as paying contacts, bill splitting (great when you are out and about with friends), free exchange rates when travelling abroad, saving pots for rainy days, overdrafts (if you are eligible) and soon you will be able to see your credit score directly within the app which will be an added bonus.

Here are some of Monzo’s main features:

  • Get paid a day early. If you pay in your monthly salary into your Monzo account you will receive it one day earlier.
  • Salary sorter.  Salary Sorter lets you easily sort your money between pots. e.g savings, bills.
  • Pool your spare change. When you buy something with Monzo, you can choose to round up your purchases and put the spare change in a Pot.
  • Spending budgets. You can set spending budgets by category (e.g. Night out, Entertainment, Gym, Travel).
  • Savings pots. Split money into interest-earning savings pots.
  • Bills pots. Get direct debits or standing orders paid out of a bills pot.
  • Instant spending notifications. See what you’re spending in real-time.
  • Instant payment notifications. See what’s coming into your account in real-time.
  • Free cash withdrawals abroad. Up to £200, after that it’s a 3% charge.
  • No transaction fees. Contactless payments and spending overseas is free.
  • Energy switching. If you switch energy provider using the app then you can get cashback.
  • Joint accounts. Open a joint account with another Monzo customer.
  • Overdrafts. Apply in the app for an overdraft of up to £3,000.
  • Apple Pay. Monzo works with Apple Pay.
  • Loans. Apply for a Monzo loan of up to £15,000.

Monzo Customer Reviews

Monzonians have rated Monzo as ‘Excellent’ on Trustpilot with 4.5 out of 5.0 stars, with over 6,000 reviews, 79% of those cite a good user experience and helpful budgeting features. On the negative side, 13% of customers vent their anger at the bank for closing their account without explanation.

Is having a Monzo account worth it?

Absolutely, what’s not to like. For me, Monzo’s best features are its saving pots, free exchange rates and free withdrawals when travelling abroad.

Are there Monzo alternatives?

Yes, Monzo is not the only challenger bank available, there are many digital banks appearing all the time. Check out Digital Banking list of all current UK digital banking apps.

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