Written by, Marija Petkova
Updated February, 7, 2024
Digital banks are the future of banking, and if you haven’t considered opening an account before, you should do so now.
But, what are the best mobile only bank accounts in the UK, what are the benefits of using a challenger bank, and which one is right for you?
Read on to find out.
Starling Bank is one of the UK mobile challenger banks that specialises in current accounts.
The bank offers a wide range of accounts, including business and sole trader accounts, joint accounts, as well as bank accounts for teens and kids, some of which come with a monthly fee of £2 and £5.
Starling Bank only pays 0.5% interest on balances of up to £85.000 but has an array of spending and budgeting tools that help users keep track of their spending and a Goals feature where you can keep your savings separate from your main balance.
Furthermore, the app has a bill splitting tool, a round-up savings feature, and a pay nearly option that allows customers to send money to nearby users without needing their bank details.
Starling Bank also allows for overseas spending. It doesn’t charge overseas ATM fees, but it applies a flat rate of 0.4% fee for currency conversions on international transfers.
Revolut is the biggest online banking platform in the UK, counting over 10 million customers.
Revolut is an online banking platform that offers free international money transfers, hassle-free global spending, and access to cryptocurrency exchanges.
Although customers can use the app for instant transfer or request payments, as well as buy, hold and sell crypto, they can’t spend crypto directly (like you would if you had a crypto-based debit card from Coinbase).
They can also earn no more than 0.07% in APR, which is only 0.01% above the national average, and there are some monthly and foreign currency fees that come with an account from this bank (depending on the plan you pick).
What makes the Revolut app the best mobile banking app is that it doesn’t have a minimum deposit limit and doesn’t charge any ATM fees. Customers also get both a virtual and a physical card that customers can top up from other bank accounts in their name.
Monese is a great app only banks for those that live in the UK and/or Europe that need quick access to cash and cheap money transfers overseas.
The bank works with GPB, EUR, and RON and allows free ATM withdrawals abroad and fee-free card payments, though there might be a limit on these, depending on your plan.
One of its biggest benefits is the application process– Monese doesn’t require proof of residency, a UK credit history, or utility bills when opening an account. What’s more, you can open an account anywhere in Europe.
The Monese account comes with a debit card for contactless payments, an option to manage your Direct Debits, and the ability to add a Eurozone account.
You can use it to exchange, request, and accept money in the United Kingdom – free of charge, regardless of the currency.
Unlike most ‘challenger banks’ of this calibre that offer current accounts (like Monzo), Atom Bank focuses on providing mortgages, savings accounts, and business loans.
The instant savings account lets you earn interest on the money you have on your balance and access the funds at a time. The fixed-term savings account locks your money between six months and five years but earns higher interest.
Atom is one of the best mobile banks because it offers a variety of mortgage products – an option that very few mobile banks provide. It further helps applicants decide whether it’s a good idea to take out a mortgage and what’s the best deal on the market for them.
The app has a user-friendly interface and lets you keep track of much money you’ve saved, how much you will earn through interest, and your repayments if you’ve taken out a loan. It also features a blog that’s regularly updated, as well as educational videos.
Monzo is one of the best budgeting apps in the country and the perfect pick for customers that want to know exactly how they spend their money.
The app sends instant notifications after transactions and allows for person-to-person payments. Users can also set budgets for different categories, like groceries, get warnings if they spend their budget too fast, and even pay Direct Debits through their account.
One of its best features is you can use Monzo abroad. The bank doesn’t charge any extra fees for spending outside the UK and doesn’t mark up the exchange rate. However, if you use Monzo more like a spending card rather than a bank account, you will be charged 3% monthly on withdrawals over £250 monthly.
When it comes to savings, Monzo keeps them separate from your main balance and has a round-up feature that automatically puts money aside when you spend.
The bank also offers loans and overdrafts of up to £2,000 and £25,000, respectively.
Mobile only bank accounts have their advantages and disadvantages. When it’s time to decide on the best mobile only bank for you, there are a few key things to keep in mind:
Different banks have different products. Some offer a range of current accounts, others provide loans and mortgages, and there are some that work with cryptocurrencies.
It’s important to choose a bank that offers mobile only bank accounts types you need. For example, if you’re self-employed, you’ll need a different account than someone who owns a business. Some mobile banks even have kids and teens’ accounts and even give you money for opening an account with them.
If you like to stay on top of your spending, you should choose a mobile bank that has budgeting tools. Some mobile banks also offer bill splitting, a round-up feature, and top-ups.
Most mobile only bank accounts have a daily limit on withdrawals. An account with a low daily limit might be enough for everyday expenses, but if you plan on withdrawing your entire salary in one go, you’ll need a bank that allows for larger withdrawals.
Mobile banks charge for their services one way or the other. Some have monthly fees and others only charge once you go over the limit. It’s important to consider how much you’ll pay in fees and whether it’s worth it in the long run.
Before you officially become a member of a bank, make sure to check if it is FSCS protected. The FSCS protection scheme protects up to £85,000 per individual per bank and only covers banks that are authorised by the Financial Conduct Authority and the Prudential Regulation Authority.
There are several benefits to having a mobile-only bank account.
First of all, they tend to have lower fees than traditional banks. This is because they don’t have any costs related to maintaining physical branches.
Secondly, mobile-only banks often offer better interest rates, compared to traditional banks. This is because they are able to access capital at a lower cost and can pass those savings on to their customers.
Finally, mobile-only banks are convenient– you can access and manage your account from anywhere with an Internet connection, which is a huge plus for Brits, 88% of whom own a smartphone. This can be especially useful if you’re a frequent traveller or live in an area where there are no physical bank branches.
Are mobile only bank accounts the future of banking?
While traditional banks still hold their ground, mobile banking is proving to be a persuasive trend and it’s easy to see why – with just a few taps, you can deposit checks, check your balance, and contact customer support.
So far, some of the best mobile only bank accounts with a debit card are Atom Bank, Monzo, Revolut, and Staysure.
A mobile-only bank is a financial institution that offers its services exclusively online, usually through a mobile app. Customers of mobile-only banks can use their devices to open accounts, make deposits and withdrawals, transfer funds, and conduct other banking transactions.
Mobile banks access and store your personal and banking information in a secure data centre. If your phone account is hacked, some banks may provide reimbursements.
The best mobile app for you is the one that offers what you need. Some of the best mobile only bank accounts in 2022 are Revolut, Atom, and Starling Bank.