Monzo Business Account Review

monzo business account

It’s already pretty well-known that Monzo is a very popular digital bank service, but it’s hard to tell whether the hype is real or not. We know that you can easily manage budgets, monitor spending, and conduct transfers, but many banks on the market already do these things. 

So why should you choose Monzo Business product? That’s what we are going to find out as we dive in deep to determine what’s special in this Monzo business account review. 

What’s Special About Monzo Business Account?

Monzo Business account offers a wide range of features that makes it an appealing offer to many business owners. As a business account holder, you have access to features such as the following:

  • Tax pots
  • Integrated accounting
  • Mobile/web access
  • Multi-user access
  • 24/7 customer support
  • Free Xero account for 6 months
  • Free lite version

We will go into more detail about these features and more in the remainder of this Monzo business account review.

Pros

Monzo has several positive features that make it an asset to many business owners looking to open a business account:

  • Accounts include a business debit card
  • Withdrawals from any ATM
  • Low to no monthly fees
  • Up to 85,000 protected by FSCS
  • Free card payments anywhere
  • Monzo mobile app
  • Easy sign-up
  • Easy budget management
  • Fully licensed and regulated

The business debit card, in the form of a Mastercard, can be used anywhere both at home and internationally with no fees. Plus, you can integrate it into your Apple Pay or Google Wallet, making it even more convenient for online use.

Cons

While Monzo certainly has some attractive features included with their business accounts, it does also have a few negatives: 

  • No credit card available
  • IBAN not included
  • Low cash deposit limit
  • Limited range of companies eligible 
  • Must have a personal account to sign up
  • Only loans through third-party lenders

Although many clients find it convenient to do their business online, some also consider it a con that there are no physical branch locations that you can go to. Additionally, deposit limits are lowered for customers under 18. 

What Do I Get with a Monzo Business Account?

When you open a Monzo Business account, you gain access to several unique features. Read more about some of these features below.

Full UK Current Account 

Even when selecting the free version of Monzo’s Business account, users must sign up for a personal account as well. So, anyone using a business account automatically gains access to a full UK current account. 

What does that look like? Here are just a few features of Monzo’s personal UK accounts:

  • Fully licensed UK account
  • Protections from Financial Conduct Authority and Prudential Regulation Authority 
  • Protections from the Financial Service Compensation Scheme
  • Spending notifications
  • Savings pots
  • Interest on savings
  • Overdraft protection
  • Constant customer support
  • Personalized budgeting
  • Apple Pay/Google Pay
  • Spending categories

These are just a few of the benefits you get when you sign up for a Monzo current account. You can also upgrade these features when you move from the free account to Monzo Plus or Monzo Premium.

In-App and Web Banking 

With a Monzo Business account, you get access to both their website and in-app banking. As an online-only bank, their web and app services are top-notch. Generally, both platforms are very user-friendly. 

The app is available on Apple, Google, and Android devices. Through the app, you can access these features:

  • Payments
  • Saving pots
  • Budgeting
  • Manage cards
  • Account limits
  • Fees/bank statement
  • Account details

Without a physical location to go to, the app proves to be a necessity for account holders. Thankfully, anything you need to accomplish you can do within the app or over the phone with one of Monzo’s banking experts.

Business Debit Card 

Included with your Monzo Business account is the business debit card, which is a debit Mastercard. This debit card includes chip, contactless, and swipe capabilities. You can also add it to your Apple Pay or Google Pay wallet for quick online transactions. 

It can be used anywhere that accepts Mastercards, and there are no charges when you spend money – whether you’re within the UK or abroad.  

Account-holders can also use the business debit card for ATM withdrawals; however, the card does come with limits.

The daily withdrawal limit is 400 pounds, while the monthly withdrawal limit is 5,500 pounds. You can also deposit cash using your Monzo card, but each deposit comes with a 1 pound fee. You can deposit up to 1,000 pounds cash every six months, which is not a lot. 

Free, Instant UK Bank Transfers

With your Monzo Business account, you can transfer money between UK-only accounts for free with no additional fees.

However, if you want to complete an international transfer, you will have to use TransferWise and will pay a fee. Monzo does not encourage performing international transfers or payments at this time due to unreliability in their network. 

How to Open a Monzo Business Account

In order to open a Monzo Business account, you must first create a personal account. Thus, anyone who has a business account with Monzo will also have a personal account simultaneously. 

Before signing up for a business account, you should check if you’re eligible. You can do so right on their website here.

After you’ve signed up for a personal account, you can apply for a business account. Simply click the “apply” button within the link above, and Monzo will redirect you to download the bank’s mobile app. 

From there, you can sign up through your smartphone through a very quick and easy question and answer process. You do not need to have any kind of appointment to sign up for a Monzo Business account, and your online access will be available the day you are approved – no waiting. 

Who is Eligible to open a Monzo Business Account?

Anyone who owns a limited company, or an ltd, or is a sole trader can open a Monzo Business account. You must also be registered and be a tax resident of the UK to do so. Anyone who pays taxes in a different country is not eligible to open a Monzo Business account.

Limited companies applying for a business account need to have an active status on Companies House with an active company director, or at least someone who has majority control. 

Monzo does not offer services to the following:

  • Partnerships
  • Limited liability partnerships (LLP)
  • Limited companies by guarantee
  • Public limited companies (PLC)
  • Charities
  • Community interest companies (CIC)
  • Trusts/Funds
  • Clubs/Non-registered organizations
  • Unlimited companies
  • Royal charters

Other high-risk type industries are also not accepted by Monzo, including illegal trades, financial services, and sales of precious jewelry. 

Monzo Business Accounts

When you sign up for a Monzo Business account, you have the option to choose from one of two account types: 

  • Lite
  • Pro

Each of these accounts comes with different features, with the Pro account offering more features than the Lite account.

Lite 

The Monzo Lite Business account is a free offering from the bank. There are no monthly fees to use this account, but you still get some pretty good benefits in using it. 

Monzo Lite gives you all of the same current account benefits. It also gives you access to the business debit card and the features that come with it. These features include:

  • Free bank transfers
  • Overseas spending
  • Savings pots
  • Spending alerts
  • Scheduled payments

Additionally, you also get the same great access to both the website and the mobile app. There are no restrictions in these areas. 

Pro

When you upgrade to the Pro Business account, you agree to pay a monthly fee of 5 pounds. The Pro account gives you everything that the Lite account does, with some additional helpful features.

When you use the Pro account, you gain access to the tax pots feature. This feature allows you to set aside a percentage of your incoming cash flow for tax purposes. 

You also receive integrated accounting through various accounting tools, including a free 6-month membership to Xero. 

Monzo Pro Business accounts offer multi-user access, invoicing, and more exclusive business offers that vary from time to time.

Tax Pots Feature

One of the best features of Monzo Business is their tax pots initiative. Tax pots allow you to choose a custom percentage to automatically set aside for taxes. Each time your account receives a deposit, it will take out the percentage of the money you’ve established. 

With this feature, you no longer have to remember to set aside money for tax season. Your money will be there when you need it. Unfortunately, you can only access this feature if you have a Pro account. 

Integrated Accounting Tools 

Monzo is partnered with a number of accounting tools that you can use within your account, making it easy to complete all of your accounting operations. With your Monzo account, you can work with Xero, FreeAgent, or QuickBooks.

Alternatively, you can also export your transactions to use with another outside tool of your choice. These options eliminate the need to manually upload your statements and allow you to automatically and quickly share your balance and transactions as needed. 

SWIFT & SEPA Transfers with Monzo 

Currently, making international payments is possible, but not particularly safe. Monzo recognizes this and even advises that these payments may never reach your account at all. 

In order to receive an international payment, you must have an IBAN. 

The reason international payments are not reliable yet is that Monzo is not connected with SWIFT and SEPA. These two networks allow banks to move money around both Europe and the rest of the world safely. 

Monzo is currently working out a deal with NatWest to use them as a correspondent bank, meaning they will be able to use NetWest’s existing SEPA connections. They are also currently working out ways to establish reliable transfers globally, but have yet to do so. 

What is the Difference From Traditional Business Bank Accounts? 

While Monzo Business offers many of the traditional business account features offered by other banks, it does have a few stand-out features that make it unique, such as:

  • Multi-user access
  • Tax pots
  • Instant notifications
  • Automatic integrated accounting tools

Additionally, Monzo is an online-only bank. While there is no in-person access to your business account, they have stepped up their website and their mobile app to make it completely user-friendly. 

Finally, Monzo offers free ATM withdrawals, cash deposits, and check deposits – which are services that not all other business accounts offer. 

Is Monzo Business Account Safe? 

Monzo is a fully regulated UK bank, so it is covered by the Financial Services Compensation Scheme (FSCS). This means your eligible deposits are protected by the FSCS up to 85,000 pounds. 

Monzo is not currently reliable for international transactions; however, they have made this notice clear on their website and encourage their users not to perform these transactions without understanding the risks. 

Is Monzo Offering Business Loans?

Monzo does offer business loans for business accounts, but these loans are conducted and received through third-party lenders. You cannot currently take out a loan with Monzo directly, but they can help facilitate the process. 

Alternatives

If you’re not sure about opening a business account with Monzo, you can check out a couple of alternative business banking options below. 

Revolut Business 

Revolut australia

Revolut has shaken up the business account world by offering business account services that extend beyond the UK. In fact, they boast a long list of European countries that are eligible to use their services. They also encourage potential clients to reach out, even if they’re located outside of their list of service areas.

Revolut also works with a wider range of business types than Monzo does, including:

  • Unlimited companies
  • Private limited companies
  • Public limited partnerships
  • Partnerships
  • Limited liability companies
  • Sole traders/freelancers

Finally, Revolut works with 28 different currencies, holds secure virtual cards, and partners with several businesses for additional perks.

However, Revolut’s prices range from free accounts to 25 pounds per month, so you could end up paying a lot more than you would with Monzo. Plus, Monzo has more extras to offer.

Starling Bank Business

starling bank

Starling Bank’s business accounts are very similar to Monzo’s Pro Business account. However, Starling offers many of these features for free, while Monzo’s Pro account comes with a monthly fee. 

However, Starling does charge more for cash deposits than Monzo, and that fee can add up quickly. The bank also offers a Business Toolkit with additional accounting, bookkeeping, and VAT management services, but that kit comes at an additional monthly fee. 

Starling also covers the same types of businesses that Monzo covers. Overall, you can get a lot of the same services from Starling that you can get from Monzo, but you can receive them for free instead of paying a monthly fee.

However, if you want to access some additional features, you will end up paying more money per month than you would with Monzo. 

The Bottom Line

Monzo Business accounts prove to be an excellent option for eligible businesses operating within the UK. They offer some great extras, such as their tax pots and multi-user access. Their 24/7 customer support is quite literally award-winning, and they offer a level of transparency that many banks do not. 

While there are still some kinks to be worked out – such as the issues with international deposits – it’s clear that Monzo is an up-and-comer in the business banking world. Their online services are user-friendly and sign-up is a breeze. Entrepreneurs can do a lot with a business account with Monzo.