Revolut Vs. Monzo (What is a Better Digital Account in ’23?)

Today we’re comparing two challenger banks that have exploded in growth in both their domestic UK market and globally. Revolut and Monzo have focused more on expansion and adding new features like investing or travel insurance than on making a profit. This is of course good for their existing users as they can avail of low to no fees regarding ATM usage and currency exchange. Before we dive deeper, here’s our short verdict:

I recommend Revolut to users that need to hold multiple currencies in their account and to the ones that want to occasionally invest in crypto or stocks. Revolut is also widely available worldwide which is great. Monzo is available exclusively to UK customers (and the US soon) and is easy to switch to with the CASS Switching Service. They’re also good for taking out loans or going into an overdraft. 

We’re comparing their top paid accounts now. And here we can see that Monzo offers free ATM withdrawals at home but charges for them abroad after £600. Revolut charges both at home and abroad a 2% fee after £800 (£200 for the free account).

Revolut also offers investing in crypto, stocks and commodities that Monzo doesn’t offer. The markups are 1.5-2.5% for crypto and 0.25-1.5% for commodities. Stock trading is commission free. 

Monzo on the other hand offers overdraft and loans at a 39% EAR interest rate. Revolut doesn’t do overdrafts or loans yet. 

These are all the fees for now, but as companies will be seeking profit for their shareholders so will increase the pressure to introduce more or higher fees to their users. Will this mean an exodus to competitors like Starling that do not have fees or paid accounts but are still profitable?

Security

Digital banks and their clients are under constant attack from criminals trying to get into their systems in various ways. It is, therefore, crucial to stay on top of things, both as a company and as a user.

Luckily, both Revolut and Monzo have gone to great lengths to ensure that their systems are hard to penetrate and that their customers are well informed of the newest scams or phishing attempts.

And while some companies are still struggling to implement 3D secure payments, Monzo has already implemented the new 3DS2 that offers substantial improvements.

Users of both apps can use the super-helpful disposable virtual cards that make your online shopping even more secure, especially when buying from a, still unknown vendor for example.

There is a big difference between the two when it comes to the safety of your deposit. Namely, only Monzo is registered as a full bank in the UK and therefore your deposits are automatically insured up to £85,000. Revolut has implemented other mandatory safeguards as an e-money institution to keep your money safe and has recently applied for a full banking licence in the UK.

As for the US customers, both challenger banks have their deposits insured with the FDIC up to $250,000, and in the rest of Europe, where only Revolut operates, your deposits are insured up to €100,000 under the European Deposit Insurance Scheme (EDIS).

Travelling

All of Monzo’s and Revolut’s accounts offer no-fee currency exchange, free transactions when abroad, and fee-free ATM withdrawal up to £600 and £800 respectively.

As you’re aware, both neobanks offer a free account and two or three paid accounts. It is the paid accounts, or to be more precise, the Revolut’s Metal and Monzo’s Premium accounts that have the most benefits for travellers. Let’s look at their perks that might or might not be worth Monzo’s £15 per month and Revolut’s £12.99.

Monzo’s travel insurance is provided by AXA and covers you and your family for an unlimited number of trips (that are less than 45 consecutive days). What you get covered here are medical expenses up to £10 million, travel disruption up to £5,000, winter sports up to £750, and lost valuables up to £750,

Now for Revolut, they offer overseas medical insurance, winter sports insurance, delayed baggage and flight insurance, car hire excess, and free lounge access for flight delayed more than an hour. This all goes through their Revolut Travel Ltd.

Both banks are similar here and both are good.

Saving

Revolut

• Savings Vaults
• 0.65% AER on USD and 0.40% AER on GBP, paid daily

Monzo

• Saving Pots
• Up to 1.50% AER/Gross (variable) interest up to £2,000 (On your balance and regular Pots)
• Up to 1.32% from providers via Savings Marketplace

Saving money is easy with Revolut and Monzo as both offer saving options on their apps that are basically just separate current accounts. You can deposit and withdraw money as you wish and get up to 0.65% AER daily interest on Revolut Metal, and up to 1.5% AER on Monzo Premium.

You can deposit money by making one-off or recurring payments but also by transferring the change that rounds up to the nearest pound. Their free accounts don’t offer interest on their Vaults and Pots.

Monzo also has their Savings Marketplace where you can sign up with different providers such as Paragon, Oak North, Charter, and others. You can sign up for Easy Access savings account which’s great for short-term goals with a minimum deposit of only £10 and next day withdrawal, and Easy Access ISA that has no tax for the interest you earn.

Then there’s also a Fixed savings account that’s great for long-term savings goals and that has a minimum of 12 months and a £500 minimum deposit. Most of the savings options in the Savings Marketplace were unavailable at the moment and the best rate that we could find was a Fixed account with a 0.35% rate from Charter Savings Bank.

Revolut vs Monzo: Business Accounts

Business accounts are the bread and butter for digital banks. It’s where they earn their money that they can blow on expansion to new markets. Monzo has only two business accounts – Lite, which’s free and Pro that costs only £5 per month.

Revolut has four different business accounts – Free, Grow (£25/m), Scale (£100), and Enterprise (custom). You can compare all four here. We’re comparing the two free accounts as the discrepancy in paid accounts is too big.

Perhaps the two biggest differences, in the Revolut and Monzo business accounts, are that Revolut’s deposits aren’t insured and that it doesn’t support cash or cheque deposits but only digital transfers.

Monzo’s deposits are insured up to £85,000 and they do accept cash (only up to £1,000 every six months) and cheque deposits. But cheques, only via post. There’s no option to scan the cheque with the app.

Cash heavy businesses or traders should stay away from both of these business accounts. 

Budget and Analytics

We already covered savings, but what about your day to day spending and budgeting. We’re so used to statistics and analytics by now, and luckily, Revolut and Monzo do not disappoint in this regard as well.

Revolut makes it really simple to track your spending by making automatic categorisations and by giving you useful predictions to plan ahead. You’ll get daily notifications that tell you how much you’ve spent and a heads up notification to tell you that you’re close to the spending limit. 

Monzo will also let you split single transactions into multiple categories to help you understand exactly how much you’re spending and on what. Serious budgeters will love the fact that all your transactions can be exported into a Google Sheet. This will enable you to look at your weekly or monthly spending as a graph or a chart. 

Junior Account

Revolut offers from one to five Junior accounts to their customers depending on their plan. They’re great for teaching kids money skills and habits for life. You can control all aspects of spending and usage from your app and then give your kids their Junior card or even a dedicated app. It’s for kids that are from 7 to 17 years old. 

Monzo doesn’t have a kids account but offers a personal account for 16 and 17-year olds that is a full banking account that’s missing only two things – no overdrafts and no spending for things that only adults can buy or use, like gambling. Teens are getting a full UK current account with an account number and sort code, so you can send and receive money.

Teach your kids how to set goals and tasks, and even how to put money aside into Vaults and Pots.

Linked Accounts

We love this new age of digital banking as more and more features and benefits arise every day to users that went for mobile apps instead of dinosaur banks. And this new feature is really great if you have more than one bank account as you can link those external bank accounts to both Monzo and Revolut. 

You can even add credit cards to have all your finances in order and in one place. This makes it really easy to track spending and see where the money is going or where you can save some of it. You’re able to move money between your bank accounts quickly and easily. 

Adding or moving linked bank accounts is easy and Revolut or Monzo will never know your passwords or logins. 

Group Bills/Shared Tabs

Different names for the same thing. This is one of the most useful tools that we came across. You can use this option to settle bills at dinner, split household expenses with your flatmates, and split amounts evenly or varied. The app will calculate everything once you tell it the split and will even notify other users in the group to settle up. 

No more awkward conversations, it’s all done for you!

Revolut vs Monzo: The Bottom Line

We like both Revolut and Monzo and think that they have a strong offering to customers around the UK and the world. As they’re getting more mature, we’d like to see perfecting the things that they do well and adding things that they’re still missing. With strong contenders like Starling and Nubank that are breathing down their necks, and working on their expansion, both Revolut and Monzo will have to WOW every existing and new customer.

In short, go with Revolut for investing and multi-currency support and with Monzo for their deposit insurance and cheaper business account.