For full functionality of this site it is necessary to enable JavaScript. Here are the instructions how to enable JavaScript in your web browser.

Budgeting & Banking

Best app-based and online bank accounts

The future of banking is here and it's on your mobile – we've got the lowdown on the best app-based banks and how they work...

app-based banks on smartphones

You may know of app-based banks by a range of names, like online banks, digital banks, mobile banks or challenger banks (to name a few). These new banking products – which range from current accounts to cryptocurrencies – exist purely on your smartphone.

Best of all, many of the services they offer are far cheaper than mainstream banks, especially currency exchange.

We've reviewed the best banking apps on the market, weighing up their pros and cons, so you know which one most closely suits your needs when it comes to saving money, budgeting and even stock market trading.

It's not quite the same thing, but Curve offers a lot of the same benefits as app-based bank accounts and you can use our £10 sign-up offer.

What are online banks?

group of friends on phones

Credit: DisobeyArt – Shutterstock

As the name suggests, online banks exist purely in digital form, usually on apps. Examples are banks like Monzo and Starling Bank (more on these later).

As they're based on apps, they don't have any physical branches that you can pop into like traditional banks, but you'll still have access to customer support and advice, usually in the form of a phone line or a live chat feature in-app.

The best online banks are free to join, although you might come across some costs for premium products (again, we'll explain this in more detail below).

If you go for a current account, you'll be able to order a debit card in the post with a sort code and account number, just as you would when opening a current account with any other bank. Through digital banking, you'll be able to set up Direct Debits, transfer money and pay bills in the same way that you would with a traditional bank account.

The explosion of app-only banking is a result of the UK government introducing reforms to create 'open banking'. This basically means that your everyday bank must allow you to share your financial data (such as spending habits, regular payments, bank statements etc.) with budgeting apps or other banks.

Savings chatbots are becoming just as big and work alongside any bank (app or traditional). We've reviewed the best savings apps and bots too.

Why choose an online bank over a traditional bank?

man holding smartphone

More and more people are choosing to open an app-based bank account to gain greater control over their finances.

So far, it seems most adopters of banking apps are using them in conjunction with a 'traditional' account. While you may only be able to get one student bank account, there are no rules on how many current accounts you can have in general, so you don't have to make a full switch.

Typically, people will keep their standard current account for things like their salary and rent payments, and transfer a set amount of spending money into an app account each month to keep track of day-to-day spending.

These app-based banks boast brand new digital banking technology and offer things you probably won't get at your typical bank.

Benefits of online banking

These are the best features you can get with free online bank accounts:

  1. Real-time notifications direct to your phone each time you spend money
  2. Budgeting tools that help you to set spending goals and over-spending alerts
  3. Fee-free overseas spending
  4. Auto-saving features which regularly set aside money in separate pots
  5. Fast in-app card cancellation
  6. In-credit interest (in some cases).

All banking apps are positioned slightly differently and each excels in specific areas, which we explore in our reviews below.

Is online banking safe?

money safe

Credit: Rob Pongsajapan - Flickr

Plenty of people are still wary about storing their money in an app-only bank that relies on online banking. What happens if the company goes bust? Will you lose all your money?

App-based banks that are fully licensed banks, including Starling Bank, Monzo and Atom Bank, are all protected by the Financial Services Compensation Scheme (FSCS). This means that your money (up to £85,000) is protected should the bank go bust.

Meanwhile, Revolut and Monese don't currently hold UK banking licences (so aren't covered by FSCS) but are covered by the Financial Conduct Authority (FCA). Effectively your funds are stored completely separately in a licensed bank that the app company partners with.

This means if one of these apps goes bust, you'll get 100% of your money back. However, if the bigger bank that was used to store your money happens to go bust, your money might not be protected.

Best online banks 2021

Mobile bankBest forOverseas feesIn-credit interestReview
Starling Bank
Starling Bank
Everyday current account
None 0.05% AER
International payments
1% – 2% on weekend currency exchange None More
3% over £200 via ATM None More
International students
2% over £2,000 None More
Atom Bank
Atom Bank
Savings and mortgages
N/A 0.15% – 1.40% AER More

Online bank reviews

Starling BankStarling bank

Current account features

For a well-rounded current account that uses digital banking, Starling Bank is your best option. Their accounts offer a wide range of features, including in-credit interest, overdrafts, savings goals and fee-free spending abroad.

Here’s a quick rundown of the main features of Starling Bank accounts:

  • Real-time notifications on your phone as you spend
  • Insights into your spending habits
  • Savings Spaces which you can set and monitor
  • Round up transactions to the nearest pound, with the spare change automatically put into your savings
  • Lock and unlock your card in-app
  • Turn off certain spending functions, e.g. online spending or contactless payments
  • Free cash deposits into your personal or joint account via any Post Office
  • 24/7 in-app customer support
  • ‘Settle Up’, which allows you to get paid back or split the bill in seconds
  • No extra charges for spending abroad
  • 0.05% in-credit interest
  • Allow joint accounts.

Things to watch out for:

  • You’ll be charged for using an overdraft (fees are made clear)
  • Maximum six cash withdrawals a day, up to £300.

Earning interest

A major thing that puts Starling Bank ahead of the pack is the interest paid on balances held with them.

Most current accounts don’t offer interest at all, so this isn’t a bad deal. You’ll get 0.05% AER on balances up to £85,000.

Behind all the banking jargon this basically means that, unlike most other banking apps, you’ll actually be making money when you use Starling – bonus!


Starling Bank does have an overdraft facility (subject to approval) but you’ll be charged 15%, 25% or 35% EAR (EAR variable) based on your credit score. While students can apply, there is no student-specific overdraft at this time, so it’s better to get a 0% interest overdraft from one of the best student bank accounts (which you can transfer across).

You can apply for an overdraft as soon as you open the app. If you’re approved, you can choose the overdraft amount (up to £5,000). It’s best to usefully select how much overdraft you actually need within that maximum amount to stop yourself from spending the full overdraft just because it’s there.

Interest is accrued daily and then charged to your account on the 15th of the following month, but this will all be clearly laid out in the app. As an example, if you borrowed £100 for 30 days at 15%, it would cost you £1.16.

Starling Bank will conduct a credit check before giving you an overdraft (but they won’t if you’re just opening an account).

Spending abroad

Starling Bank is one of the best online banks for spending abroad, as it won’t charge you for using your debit card abroad or for taking out cash at ATMs (although remember that individual ATMs might have their own charges).

It uses Mastercard’s exchange rates (with no extra fees), and you won’t be charged for the card or for topping it up. Make sure to check out our other top tips for saving on travel money.

Joint account

Starling is one of the few digital baking apps which allows anyone to set up a joint account.

These are great if you’ve got a partner or friend with whom you share financial commitments – perhaps you live together and want a joint account for paying the bills.

Once you’re both on Starling, it takes just minutes to set up. Then you’ll both be able to add and spend money. Starling joint accounts are for a maximum of two people, so won’t work if you’re wanting to split the bills between more people in a house share.

Visit Starling Bank »

↑ Comparison table



Current account features

Revolut is pretty similar to Starling, but it’s currently not an officially licensed bank in the UK – which means it can’t offer overdrafts or FSCS protection. However, Revolut is regulated by the Financial Conduct Authority (FCA) and your money is protected within segregated accounts with licensed banks.

Some of Revolut’s best features are:

  • Real-time notifications
  • Simple analytics to track spending habits
  • Instantly freeze/unfreeze cards
  • Turn off online, ATM and contactless payments
  • Savings vaults with up to 0.65% AER on GBP
  • Spend and send money abroad with no fees
  • Use the app to buy and exchange cryptocurrency
  • Split the bill function (even if they don’t have the app)
  • Set up recurring payments
  • Revolut Perks including cashback or discount offers
  • Free debit card (delivery fee applies)
  • Open Banking allowing you to view and manage all your bank accounts via the Revolut app.

These are the things to watch out for with Revolut:

  • Revolut are covered by the FCA but not the FSCS 
  • You can only withdraw £200 cash for free each month or make five withdrawals (whichever one comes first) on the Standard plan – after that, you’ll be charged 2% on all ATM withdrawals, with a £1 minimum fee.
  • If you want more features, higher withdrawal limits, and better rates on cryptocurrencies and precious metals, you can upgrade to the Revolut Plus, Premium, or Metal plans. But keep in mind that these come with a monthly fee.

Buy and exchange cryptocurrency

One of Revolut’s big selling points is that it makes it super easy to trade cryptocurrencies.

If you’re new to crypto, check out our Bitcoin guide for all the basics, including how to get started and calculate risk.

Revolut allows you to exchange any of its 30+ featured fiat currencies (e.g. pound sterling, euros, US dollars) into Bitcoin, Ethereum, Litecoin, Bitcoin Cash, XRP and more. It charges a fee of 2.5% for Standard and Plus users and 1.5% for Premium and Metal users (the fee is included in the exchange rate).

You can also use the app to follow real-time cryptocurrency rates and receive price alerts straight to your phone. It’s also possible to set target prices, where your cryptocurrencies are automatically exchanged when it reaches a specific price.

But be aware, the cryptocurrency feature is not protected by the FSCS. However, Revolut has got temporary Crypto registration with the FCA until 31st March 2022.

Create Vaults

Revolut’s Vaults work in a very similar way to Starling’s Spaces or Monzo’s Pots – you can set them up in seconds, and use them as a way to quickly and easily save up cash.

You can round up purchases to the nearest pound and save the difference, or set up weekly or monthly recurring payments. It’s even possible to give them a name so you’ll be extra motivated to start saving.

Send and spend money abroad for free

Unlike many banks which will add on hefty charges, Revolut uses the wholesale Interbank Exchange Rate (which banks use to trade between themselves). If you’re a Standard user, you can use the app to send up to £1,000 at this rate each month, with a small fee of 0.5% applied to transfers over this monthly limit.

Spending money abroad with Revolut is broadly similar. Monday to Friday, you’ll usually use the Interbank Exchange Rate when spending (except for Thai Baht, Ukrainian Hryvnia, cryptocurrencies or precious metals), but at weekends (midnight on Friday until midnight on Sunday, GMT) you’ll be charged an exchange fee of between 1% – 2% depending on the currency.

Once again, there will be a 0.5% fee on any spending over £1,000 per month.

Visit Revolut »

↑ Comparison table



Current account features

Monzo is incredibly similar to Starling Bank in terms of its structure and the features it offers to keep track of your money.

It used to be a prepaid card. But, following its transformation into a fully licensed bank in 2017, users now have their own current accounts with sort codes and account numbers.

The app and card work in essentially the same way as before, except now you can set up Direct Debits and apply for an overdraft.

Here are some of Monzo’s main features:

  • Real-time notifications whenever you spend
  • Savings Pots that set money aside by rounding up every purchase you make
  • Various savings accounts and ISAs for long-term savings, with interest rates of up to 0.70% AER (not all accounts are available at all times)
  • ‘Easy Access Savings Pots’ accounts for short-term savings with an interest rate up to 0.25% AER (but some Savings Pots aren’t available at all times)
  • Set budget spending targets for everything from groceries to eating out (and notifications if you’re going over budget)
  • Easily split the bill with friends
  • Create a shared tab with friends when on a night out or with your housemates to keep track of how much everybody owes you
  • ‘Get Paid Early’ salary advance feature
  • Spending abroad free
  • ATM withdrawals within the EEA are fee-free, and you can withdrawal £200 per month in other countries without paying any extra fees
  • Monzo does Joint Accounts too (but you both have to have your own separate account to apply).

Things to watch out for:

  • You can only withdraw £400 a day, up to £5,500 a month
  • There are charges for withdrawing more than £200 per month in certain countries (see below)
  • You’ll be charged interest for using an overdraft
  • Monzo has Plus and Premium accounts, but we recommend sticking with the free version due to the monthly fees and limited extra features.

Savings pots

Monzo Pots are designed to help customers set aside and save money. Creating a new pot takes seconds and you can add a custom image. For example, if you’re saving up for a holiday, you could create a pot called ‘Trip to Spain’ and upload a picture of a nice sunny beach.

Money that’s in a pot can’t be spent and won’t appear in your available balance. However, if you run out of money, you can easily transfer funds out of your savings pots and back into your current account to use it again.

If you create a new pot and call it ‘Coin Jar’, Monzo will automatically round up any purchases over £1 and add the difference to the pot. So, if you buy lunch for £4.25, Monzo will round it up to a fiver and add the 75p to your Coin Jar pot.

Monzo has also entered the savings accounts and cash ISAs games. The ‘Fixed Savings Pots’ can be used for long-term savings of £500 or more with fixed interest rates of up to 0.70% AER. For short-term savings goals, you can opt for the ‘Easy Access Savings Pots’ (including the Cash ISA options), giving you up to 0.25% AER. Not all accounts are available at all times, however.

Both of these options are provided in partnership with other UK banks and are actual savings accounts, unlike regular ‘pots’ which allow you to put money aside without earning interest.

Spending abroad

Monzo has completely free spending abroad. They use the Mastercard’s exchange rate and don’t add any extra charges.

Within the UK/European Economic Area (EEA), cash withdrawals from ATMs are free (but remember some ATMs can charge). In other countries, you can only withdraw up to £200 over a 30 day period before needing to pay 3% on withdrawals.

Overdraft fees

Monzo offers overdrafts of up to £1,000. If you use an overdraft you’ll be charged 19%, 29% or 39% EAR (variable) depending on your credit score.

To put this into perspective, if you use an arranged overdraft of £1,000 for 30 days, with 39% EAR (variable), it would cost you £27.45.

If you don’t have an overdraft, Monzo will simply decline any payments which take you over your limit, but this won’t work for ‘offline’ payments like those through TfL or on aeroplanes – in which case you’ll go into the red and start incurring the percentage charge.

Get Paid Early

Fancy an early payday? With Monzo, you can.

If you have a job and arrange for your salary to be paid into your Monzo account, Monzo can advance you your wages at 4pm the day before the money is due to leave your employer’s account.

Visit Monzo »

↑ Comparison table



Current account features

Like Revolut, Monese isn’t a fully licensed bank but a registered Electronic Money Institution monitored by the FCA – so your money is kept separate from the company’s finances and will be protected if the app goes bust.

They offer all the usual perks and are especially useful for international students – but, unlike some of the other apps, there are quite a few fees to be aware of with Monese.

Here’s a rundown of the main features of Monese accounts:

  • No proof of address, credit history or regular income needed to open an account
  • Real-time notifications to keep track of spending
  • Lock and unlock your card instantly in the app
  • Deposit cash into your account at the Post Office or PayPoint shop
  • Transfer money abroad in different currencies using real wholesale exchange rates
  • Transfer money to your account from outside the UK using their European IBAN
  • Open both a UK and Eurozone current account at no extra cost, allowing you to spend in GBP and Euros.

Things to watch out for with Monese:

  • With the free Simple account, you get up to £200 of ATM withdrawals a month and are charged 2% after that
  • The Simple account has a 2% exchange fee for international bank transfers to non-Monese accounts, as well as foreign currency card spending and ATM withdrawals over £200
  • There’s no overdraft facility – if you do end up with a negative balance, you won’t be charged but your account will be locked until you top up.

Anyone can open a Monese account

One of Monese’s biggest selling points is that virtually anyone can open an account with them, regardless of how long you’ve been living in the UK.

Unlike pretty much all other banks, you don’t need to provide proof of address to set up an account, so if you’ve just arrived in the UK from abroad, you can still get a current account set up straight away.

You’ll just need to take a selfie and a photo of your ID (preferably a passport or ID card), and you’re set. You’ll have an account number and sort code in minutes. Plus, there’s no minimum balance requirement, so you don’t need to deposit cash straight away.

Once your account is open, you can receive and make payments, and set up Direct Debits, just like you would with any other current account.

Deposit cash

Since app-based banks don’t have any physical branches, it’s normally not possible to deposit cash into your account.

However, Monese has paired up with the Post Office and PayPoint so you can deposit cash that way. Simply head along to any Post Office branch, or a shop with a PayPoint sign, hand over your Monese card and the cash you want to deposit, and the money will appear in your account the next business day.

However, you will be charged for this service. With a free Simple account, you’ll be charged 3.5% (min. £3). With the Classic account, you’ll have a £900 monthly allowance and will be charged 2% for cash top-ups over this amount (cash top-ups are free with the Premium account). It’s free with a Premium account.

There are also caps on how much you can deposit – between £5 and £250 per transaction at the Post Office, and £249 per transaction/£500 per day/£1,300 per week at a PayPoint.

It’s a useful service to have access to, but the hefty charges arguably make it pretty worthless – you’d be better off depositing cash at a traditional bank and transferring it across to your Monese account.

Other ways to deposit money

As well as depositing money in cash form, you can also top up your account by standard bank transfers, IBAN transfers or instant debit card top-ups.

If you’re abroad, you can transfer money into your account via the Monese European IBAN (International Bank Account Number). Simply use the IBAN details provided and include your Monese ID in the reference. Euros will then be converted into GBP and added to your account, or if you have a Eurozone account, they’ll be directed straight there.

You can also instantly top up your account using a debit card that is also in your name for free.

Visit Monese »

↑ Comparison table


Atom BankAtom

Atom Bank is a fully licensed bank, but it doesn’t offer current accounts like Starling and Monzo. Instead, it specialises in savings accounts and mortgages, offered through digital banking.

Although they may introduce current accounts and debit cards in the future, at the moment, you can’t generally use Atom for day-to-day spending.

Biometric security

One unique feature of Atom Bank is its use of biometric security. This means that, unlike most other apps which use touch ID, the Atom app uses face and voice recognition instead (along with a passcode).

To access the app you might need to take a selfie or read a phrase out loud – which is arguably much easier than trying to remember complicated passcodes or security questions.

Fixed Savers

Atom’s main product is its fixed savings accounts. You can open an account in minutes, and start saving with anything from £50 – £100,000.

For each savings account, you can choose between monthly or annual interest (you’ll likely get a slightly better deal if you go for monthly interest).

The interest rates on the Fixed Saver accounts is 0.15% – 1.40% AER at the time of writing.

However, remember that as with most fixed-rate savings accounts, you can’t withdraw your money until it reaches maturity. Make sure you’re definitely not going to need the money before you squirrel it away in a fixed rate account.

Instant Savers

As well as fixed savings accounts, Atom now also offer instant ones which allow you save any amount up to £100,000, and access your savings whenever you wish.

To transfer money in and out, you’ll need to connect your Atom Instant Saver account with your current account.

At the time of writing, Atom is offering interest of 0.35% AER/Gross on their instant-access savings account.


It might be a bit too soon to start thinking about these just yet as a student, but another of Atom’s main products is their mortgages. It has a network of brokers who can advise you on your situation and your best option.

Once you’ve applied, you can track your application in-app and continue to manage it from there when it’s accepted – simple!

Visit Atom Bank »

↑ Comparison table


Fact: saving a penny a day makes it easier than ever to save money.


Ask us a question or share your thoughts!

Tweet @savethestudent - Facebook Message - Email