Watch Monito's Video Review of Monzo
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This video is a money transfer review of Monzo. In it, we take a good look at its money transfer service by delving into its fees, how it works, the benefits of using it to transfer money, and much more.
Monzo Review Video Transcript
Today I'm going to be reviewing Monzo. Taking a deep dove into their various accounts, looking closely at their benefits and fees, as well as what we at Monito like and dislike about the bank. I'll also share with you why we rated Monzo a nine on our mini to score. So if you're currently thinking about or deciding on whether to get a Monzo account or not, you should have your mind made up by the end of this video.
Established in 2015 and headquartered in London, Monzo is one of the fastest growing digital banks in the world. They have over 5.5 million customers with more than £3 billion in deposits. They employ around 600 people and in 2020 for a second year in a row were awarded Best Banking App. Originally only for UK residents this month, Monzo also launched publicly in the US.
However, for this video we will be covering the UK. Specifically, they have a business account available as well, which will also not be covering today. Instead, I'll just be reviewing their personal accounts. Now, the first question we should ask ourselves is, can we trust Monzo with our money? And the answer is yes. They're regulated by the FCA in the UK and deposits up to £85,000 are protected by the FSCS.
This means in the unlikely event that Monzo were to go bust, you would be compensated up to £85,000 and normally within seven days Monzo has a number of personal accounts available, including a free current account and two paid accounts. These are called Monzo Plus and Monzo Premium, and to date over 200,000 Monzo customers are on these premium plans, plus costs £5 per month and premium is £15 per month.
They also have a teen account for ages 16 to 17, which is essentially just the same as the adult account. However, Monzo has blocked spending on things that are legal under 18 such as gambling for Monzo account holders. There's also the option to combine accounts with someone else and start a joint account, which again has all the benefits of the personal account as well as individual debit cards and collaborative budgeting tools.
The Monzo free account comes with a UK current account that provides you with an account number and sort code. You receive a MasterCard debit card, in-app customer support, bill splitting, which you can do either with Monzo account holders or through shared link, potential access to an overdraft facility and personal loans, saving features called Pots that allow you to earn interest. Another feature called salary sorter that I'll touch on shortly. Spending categories and analytics through a feature called Trends, as well as fee-free international spending and ATM withdrawals.
Now saving tools are becoming less and less unique, particularly with online banks. Revolut and Starling, for example, have features called Saving Spaces and Vaults. Monzo has their saving pots, and I actually think of all of the banks I've reviewed, these are the best.
They're essentially like having a separate account from your main balance where you can set money aside this way, you avoid spending it and instead can start saving for things like bills, a house deposit or holiday. The pots come with some cool features, including the ability to earn interest, which is available for all account holders. For example, on a 12 month fixed pot with a minimum £500 deposit, you can earn up to 1.13% interest.
You can also set custom images so you can have a photo of a beautiful sunset for your holiday pot as well as access to a rounding up feature. This is activated in-app and essentially asks Monzo to round up the cost of each transaction you make and save the change to one of your pots. I believe you can have up to 20 pots, either earning interest or not, which should be enough for most people.
They can also be hidden from view and locked in case you're tempted to withdraw from them. This is clearly a very useful feature and something Monzo continues to innovate and improve, and it's very highly regarded by the Monzo community. I spent some time browsing the community pages and found that people love their saving pots.
Ian said that before Monzo he was using complex spreadsheets to do his budgeting. However, with pots he's able to create a specific one for each saving goal and select a particular amount per month to put aside. Monzo then through their salary sort of feature deposits the money into each pot. The rest then goes into his main account balance, which he knows is money he can freely spend on himself. Like Ian, if you do want Monzo to automatically sort any regular payments you receive into pots, then these must be a minimum of £100.
Once a payment arrives, you can just click on it, select Salary Sorter and the pot you want the money deposited into. Monzo then remembers these preferences, so if you're paid by the same person or company again, the money is automatically distributed into the specific pot. That's pretty cool. And besides that, you can also use a salary sorter to receive your salary a day early with no interest or fees.
Monzo has an overdraft facility available to accounts, although it might not be available to every customer when you sign up. Monzo performs a soft search credit check that doesn't affect your credit score and is just to help them decide whether your account can have an overdraft. If you are eligible, you can borrow up to £1,000, and depending on your credit score, interest rates will vary from 19%, 29% and 39% a year.
Through the app, you can also take out a personal loan of up to £15,000. Your eligibility for these loans, like their overdraft facility, will be impacted by your credit score as well as the way in which you use your account.
Monzo recently announced a new feature called Flex. It will basically allow you to pay for products in three installments of 0% interest, or with 6 or 12 installments at 19% APR. The paid accounts come with minimum terms of either three months or six months, and the Monzo plus account is available for over 18’s, and the premium time account for ages 18 to 69.
When you sign up, you may also receive a free week of Monzo plus, which comes with no commitments. I received this when I signed up and it was a great way to try the various plus features before committing to a three month minimum term. With plus you get all the benefits of the free account, as well as the ability to add other bank accounts and credit cards.
So you can see these balances and transactions from the Monzo app. You'll also earn interest not only on your pots but also your main balance. You'll receive an exclusive holographic MasterCard debit card, be able to create virtual cards, get advanced round ups, a credit score tracker, advance spending analytics and categories, discounts and offers on companies such as patch plants, the ability to export your transactions to Google sheets, one free cash deposit at pay points across the UK, and finally, a larger amount of fee free ATM withdrawals while abroad.
The standout features for Plus include the ability to earn 1% interest up to £2,000 on your main balance and regular saving Pots. The free cash deposit and increased fee-free ATM withdrawals are also a nice touch. The virtual cards are also useful, especially if you're someone that frequently loses their physical cards.
With virtual cards, you can assign things like online subscriptions such as Netflix and Spotify. And because you can't physically lose the card, you'll never need to update these account details again. A final standout feature of this account is that not only can you add transactional data from an external bank account but Monzo also includes this data in your spending trends, which means that you're able to track and categorize your spending across all of the accounts and credit cards you hold, giving you a complete overview of your finances. I mean, that's pretty awesome.
Premium has all the benefits of Plus as well as an exclusive metal card. You also get phone insurance and worldwide travel insurance. The ability to earn 1.5% interest on £2,000 in both your balance and your regular Pots. Discounted airport lounge access, five fee-free cash deposits each month and an even greater amount of fee free international ATM withdrawals at £15 per month.
This is certainly not a cheap account. I mean annually that's going to cost you £180. However, you could easily offset the cost if you were to take advantage of the various benefits. For example, phone insurance and travel insurance can easily cost up to £15 per month. And if these are things you already have, then you could cancel your existing plans and shift everything to Monzo.
The various discounts and offers they have, along with the interest you'll earn on your balances, will also help offset the costs, although it's probably worth checking their offers page first to make sure there's something for you to benefit from.
If you'd like to pay cash from Granny into your Monzo account, you can deposit it at any of the 28,000 pay point locations across the UK. You can deposit between £5 and £300 in one go, and if you don't have free cash deposits, then you will pay £1 per deposit. This fee is a result of Monzo not having branches and instead paying PayPoint for each deposit their customers make.
ATM withdrawals can also incur fees, although trying to understand the Monzo fee structure for this can be quite confusing if you're on Premium or Plus all withdrawals in the UK and European Economic Area, which doesn't include every European country, are free of charge.
Although there's a daily withdrawal limit of £400 in the UK, if you're on the standard free account within the UK and EEA, you can withdraw up to £250 every 30 days after that you'll incur a 3% fee. This is where it gets confusing, Monzo says. For those that use them as more of a bank will get access to higher allowances, and won't pay any fees for withdrawing cash.
This is something that you'll be notified about via the app. And to qualify, you must receive at least £500 every 35 days to your account and have at least one active direct debit. There's also a couple of other ways to qualify, which are all available to read on the Monzo website.
Outside of the UK and EEA in countries like the US, Monzo free customers can withdraw their first £200 fee free every 30 days plus and premium will receive fee free limits of 400 and £600. And once you exceed these amounts, you'll be charged a 3% fee for withdrawing money. Just make sure when you withdraw money internationally, you choose to be billed in the local currency, so you receive the best possible exchange rate.
Spending internationally in a foreign currency with Monzo is fee-free, and Monzo uses MasterCard's exchange rates, which are more or less on par with the real mid-market rate. This is a great thing and is why we scored them a 9.8 for fees and exchange rates as they are both competitive and fair. Especially when compared to providers like Barclays and HSBC, who typically profit on foreign transactions through hiding fees in poor exchange rates.
Monzo scored excellent reviews from customers overall, earning 4.5 out of 5 stars on Trustpilot. They've accumulated over 20,000 reviews and over 15,000 of the reviews are 4 or 5 stars. It's clear that Monzo customers are satisfied with their products and services, and customers frequently praise their hassle free approach to banking. Their intuitive and well-designed app, as well as their great customer support.
Compared to the positive reviews. There aren't a ton of negative reviews. Monzo has had complaints in the past about users being locked out of their accounts without reason and also delays in the signing up process. That wasn't an issue for me, though. I used my passport to verify my identity and was approved within the hour. My card arrived after five days, and because I had a seven day free trial with Monzo Plus while I waited, I was able to create and use a virtual debit card. For me, the process of signing up with Monzo was quick and easy.
In our opinion, Monzo is an excellent low cost mobile bank. It's a great alternative to traditional high street banks. They've received excellent feedback from their customers that's testament to the fact that they listen to feedback and are continually trying to improve their products and services.
We love how easy and quick it is to sign up as well as the smart features that you can use to manage your budget, including the saving parts and salary sorter feature. We don't like that cash deposits and certain international ATM withdrawals can incur a fee. Depositing checks is also difficult as you have to send them to Monzo in order to pay them in.
While companies like Starling offer check deposits in-app through snapping a photo that said, we do like the fact that international transactions are fee free and that you receive MasterCard's real mid-market exchange rate. The Plus and Premium accounts also come with useful benefits, and by taking advantage of them, you can quickly offset the costs of these accounts.
The elephant in the room that should be addressed when discussing Monzo is their financial results. Despite their consistent customer growth, they've failed to become profitable. Monzo in their recent annual reports, said their losses have increased to £130 million for the year ending February 2021. That's up from £114 million in the same period in 2020. And there are genuine concerns regarding the bank's ability to continue operating under such heavy losses, although the CEO insists that this year they will become profitable.
With that in mind, I wouldn't let this impact your decision, at least not if you're planning to have less than £85,000 deposited as it will be protected. And if you are skeptical, perhaps don't use Monzo as your main bank account, just use it as a means of depositing some of your money to benefit from their various products, such as the saving Pots and the Salary Sorter feature, which are pretty awesome.
I hope you found today's video useful. If you did, please consider subscribing. And if you are banking with Monzo at the moment, let me know in the comments section below. I'd love to know what you think of the bank. I'll see you in the next video. Goodbye
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