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app-based banking

Digital Banking

Top current account apps

Rosie Bannister
Rosie Bannister | Edited by Johanna Noble
Updated 24 February 2021

There's now a wave of banking apps that give you a helping hand with budgeting, saving and managing your cash in a way traditional banks don't – though the biggies are starting to catch up. If you're not smartphone-savvy or you prefer banking in branch, see Best Bank Accounts instead.

Best banking apps

Who's this guide for? Anyone wanting to try an app-based current account that can help you manage your cash.

Not what you want? Other related guides... 
Best Bank Accounts | Autosaving Apps | Top Savings Accounts | Prepaid Cards

illustration

What is digital banking?

If you 'do' digital banking, it means that you do all your banking through an app. And with 26.8 million people using a mobile banking app in 2019 (according to UK Finance), it's one of the more popular ways to bank.

Our focus in this guide is on app-only banks. These have great tech and features that help you know where you're spending, and help you save towards your goals, all within the same app and same account. We know that some of the traditional high street banks have popular apps, and are catching up with their app-only competitors, so we feature the best of these too.

While the purely app-based banks don't have a high-street presence, most have in-app customer support, with dedicated teams on hand to offer assistance if you've any questions or issues.

All apps featured in this guide are free to download – though some have costs associated with running them, which we clearly explain in our best buys below. You'll also need a relatively up to date smartphone running iOS or Android.

Rather watch than read? This short video shows you how app-based banks work and what advantages they offer...

What is app based banking
Embedded YouTube Video

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The five digital banking need-to-knows

To get your head around app-based banking, it helps to know the following: 

  • 1. The apps really help you know where your money's going – many rely on them to stick to a budget

    apps to track spending

    Although these apps aren't solely meant for budgeting, the main ones we feature in this guide can really help you to keep your finances in check.

    They give real-time notifications when you spend or save – so for example, if you bought something for £5 in Boots, you'd get an instant pop-up on your phone telling you what you've spent.

    Plus this helps you spot fraud too. If you get a notification your debit card's been used in Nando's, and you're sitting at home watching TV, you can immediately freeze the card within the app to stop any further fraudulent use, then call the bank to let it know about the fraud (and to send you a new card).

    Another feature they have is to give you insights into your spending habits. This means you'll easily be able to see how much you spend in one particular shop each month (coffee addicts beware!), or more generally how much you spend on entertainment or travel.

    This should make it easier to budget and keep track of your money, allowing you to cut the cloth where needed.

  • 2. Like any other bank, your money's protected up to £85,000 in an app-based bank

    When it comes to your finances, you want to be sure your money's safe – so it's important to understand how your money's protected. UK-regulated banks have Financial Services Compensation Scheme (FSCS) protection. This covers up to £85,000 of your money in the unlikely event of a bank going bust (for more on this, see our Savings Safety guide).

    The apps below – Starling and Monzo – are fully regulated UK banks, and are therefore covered by the FSCS. This means your money is protected in exactly the same way as it would be with a big traditional bank, such as Barclays, HSBC, Lloyds or NatWest.

  • 3. App-based accounts are cool and high-tech BUT you can often get better rewards elsewhere

    The financial technology firms – or fintechs – below offer a fully-fledged alternative to the main high-street players. Like their high-street counterparts, they offer debit cards, overdrafts, direct debits, standing orders and more. These challenger banks sell themselves on their high-tech, easy-to-use features, but it's still worth being aware of the old-school brands.

    Occasionally high-street banks offer incentives of £100+ if you switch to them, which can be really lucrative, or they offer ongoing rewards such as in-credit interest or cashback on bills, something the challenger banks don't tend to do. For what's currently on offer, see our Best Bank Accounts guide.

    But it's worth noting that you don't HAVE to switch to open an app-only account, you can simply open one as an extra – for example, many people use their traditional bank account for their salary and bills, then transfer their monthly spending money into an app-based bank so they can keep tight control of their spending.

    This might be a good option if you aren't convinced of the benefits of app banking but are keen to see what all the fuss is about.

  • 4. Want one of these accounts? You'll still need to pass a credit check

    Both Monzo and Starling do 'soft searches' of your credit report when you apply (unless you're applying for an overdraft – more on this in the Starling Bank and Monzo product-specific boxes below). A soft search means that other lenders usually can't see it, unlike a 'hard search' which is visible to other lenders searching your report and can lower your credit score.

    This search is for three reasons – the first is to check your identity so the bank is happy you are who you say you are and not a fraudster trying to use someone else's information. The second is to have a look at your credit history, and see if you're the kind of person who they'd like as a customer. The final one is to check how you manage any other borrowing you have. The banks use this as part of their checks to see if they'd be happy to give you an overdraft.

    If you do apply for an overdraft, the soft search generally turns into a hard search. This is to let other lenders know that you've applied for credit with that particular bank.

    See our Credit Scores guide for more information on the different types of searches, plus information on how you can check your credit report.

  • 5. Digital banking is secure – but it's still worth being careful

    Banks have security systems in place that ensure fraudsters can't hack into your account whether you're logged in online or on your phone. But still be careful – never share your online/mobile banking information with anyone.

    If using one of the mobile apps featured in this guide, make sure you download the official version from your app store, and update the app regularly to make sure you benefit from any new security features. You should also protect your phone by setting a password, PIN or other screen lock (eg, pattern, fingerprint).

    It's also worth keeping your computer up-to-date with free antivirus software, so you're protected from viruses and spyware.

Top app-based bank accounts

To get a current account with one of the challenger banks below, you apply through their apps – the process is quick and easy, typically taking just a few minutes.

Do note: these accounts can be beaten if you're looking for a free £100+ to switch, monthly cashback or savings interest. But if you're after a high-tech account, here are our top picks.

Starling Bank*

Useful spending notifications, great for budgeting + top for overseas use

Apply*

App-based Starling Bank* offers a full current account that you can open in a couple of minutes. It gives you real-time notifications when you use your debit card, insights into your spending and lets you set up savings goals. You also earn a small amount of in-credit interest.

As an added boon, there are no fees for spending or cash withdrawals abroad, making it a top-pick debit card overseas.

There are no branches, but you can still deposit cash and cheques – full info in the FAQs below.

Minimum monthly pay-in: None
In-credit interest: 0.05% AER variable on up to £85,000
How to get the app: Download for iOS (rated 4.9/5) or Android (rated 4.7/5)
Member of CASS? Yes
Overseas fees: None

Does it have full FSCS savings protection? Yes

  • What else can the app do?

    As well as providing spending notifications and insights, the app lets you freeze and unfreeze your debit card at the touch of a button, report it lost or stolen, or get a PIN reminder in-app. You can also turn off certain functions of your card such as online spending or ATM withdrawals.
     

    Starling also lets you set up 'Spaces', where you can move money from your main account and save towards different goals. You can move money as and when you want to, or you can set up a regular contribution to different Spaces. You can move money back into your current account whenever you want. Be aware that any money you have in a Space won't be included in your main account balance.

  • What exchange rate will I get overseas?

    The debit card is a Mastercard, so you'll get the Mastercard rate, which you can check here. There are no fees to use your card abroad, making it a top pick for overseas use.

  • Will Starling credit-check me?

    When applying for an account, Starling will run an initial credit check – this is a 'soft' search – which won't affect your creditworthiness. From this, it'll decide whether it'll accept you for the account, and how much it could offer you as an overdraft. If (and only if) you say 'yes' to the overdraft, Starling will then record a 'hard' credit application on your credit report, which could have a minor impact on your credit score.

  • Is my money protected?

    Yes, Starling has full FSCS protection, so your money saved with it is safe up to £85,000.

  • How do I deposit cash and cheques?

    You can deposit cash at any Post Office branch using your card and PIN if you have one of Starling's newer vertical cards (if not, you can contact Starling to request one).
     

    There are two ways to deposit cheques:

    • If the cheque's for £500 or less, you can take a photo of it in-app. The app will read the cheque details and - if it's kosher - add the money to your account within a couple of working days.

    • If the cheque's for over £500, you can mail it for free to 'FREEPOST Starling'. Make sure you've written your last name and eight-digit account number on the back of the cheque.

  • How do I contact the bank?

    If you have any problems or questions, you can contact Starling via the in-app messaging service. Alternatively, you can email help@starlingbank.com. 

Arranged overdraft cost: 15%, 25% or 35% EAR variable. The rate you get depends on your credit history.
Unarranged overdraft cost: None

APPLY*

Monzo

Budgeting help & good for overseas use

Apply

Monzo, like Starling above, gives real-time notifications when you use your debit card and insights into your spending. You can also set money aside in 'pots' and choose to round up every purchase you make to the nearest pound, with the difference going into a pot.

Monzo has no fees for spending abroad and offers a limited amount of fee-free cash withdrawals overseas – you get a bigger allowance if you use it as your main account (see key info below).

There are no branches, though you can deposit cash anywhere with PayPoint for a £1 fee and cheques by post – full info in the FAQs below.

Minimum monthly pay-in: None
In-credit interest: None
How to get the app: Download for iOS (rated 4.9/5) or Android (rated 4.7/5)
Member of CASS? Yes
Overseas fees: No spending fees. Unlimited fee-free ATM withdrawals in EU, Iceland, Liechtenstein and Norway if used as a main account (otherwise only fee-free up to £250/30-day period, 3% fee above). Elsewhere, withdrawals are fee-free up to £200/30-day period.

Does it have full FSCS savings protection? Yes

  • What else can the app do?

    As well as providing spending notifications and insights, the app lets you freeze and unfreeze your debit card at the touch of a button, report it lost or stolen or get a PIN reminder in-app.
     

    You can also set up 'pots', which let you assign money in your account to goals such as saving for a rainy day, or a specific purchase. And unless you've chosen a fixed-term savings pot (see below), you can move money back into your current account whenever you want. Be aware that any money you have in a pot won't be included in your main account balance.
     

    Monzo lets you choose between 'regular pots' and 'savings pots'. Cash in savings pots is held by one of Monzo's partners (with full UK savings safety protection) – these are Paragon, OakNorth Bank, Investec and Charter Savings Bank. The interest you can earn with them isn't the best, so it's worth looking at top savings accounts too.
     

    Monzo also has a feature called 'Bill Tracker' which alerts you if a regular direct debit leaving your account is higher or lower than usual – helpful if, for example, you've been moved on to a higher energy tariff or racked up a big phone bill without realising.

  • How much do ATM withdrawals cost?

    If you use Monzo as a main bank account, you can make unlimited fee-free withdrawals in the UK, EU, Iceland, Lichtenstein and Norway.

    If you use it more casually as a spending card, cash withdrawals in these places are fee-free up to £250 in any 30-day period (3% fee above, see more info).

    Anywhere else in the world, you'll pay a 3% fee on withdrawals over £200 in any 30-day period, regardless of how you use your Monzo account.

  • What exchange rate will I get overseas?

    The debit card is a Mastercard, so you'll get the near-perfect Mastercard rate, which you can check here.

  • Will Monzo credit-check me?

    Yes, you'll be credit checked when you apply for the account, which will appear as a 'soft' check on your credit report, which won't usually be visible to other lenders and won't affect your creditworthiness.

     

    If you also apply for an overdraft, this will then be recorded as a 'hard' search, meaning other lenders will be able to see you've applied for credit.

  • Is my money protected?

    Yes, Monzo has full FSCS protection, so up to £85,000 is safe when saved with it.

  • How do I deposit cash and cheques?

    You can pay in cash anywhere that has PayPoint (find your nearest), though it costs £1 per deposit. You can pay in £5-£300 (max £1,000 every six months).

     

    To deposit a cheque, you must write your account number on the back and send it to 'Freepost Monzo'.

  • How do I contact the bank?

    If you have any problems or questions, you can contact Monzo via the in-app messaging service. Alternatively, you can email help@monzo.com or call 0800 802 1281.

Arranged overdraft cost: 19%, 29% or 39% EAR variable. The rate you get depends on your credit score.
Unarranged overdraft cost: If you have an arranged overdraft but go over your limit, you'll be charged the same interest rate. If you don't have an arranged overdraft, it's 39% EAR variable (max £15.50/mth).

APPLY

Top-rated traditional banks' apps

You may want a slick app, but from a banking name you know. We ran a banking apps poll to ask which apps are best – and while Starling and Monzo (above) came out on top for features and ease of use, the two below were the best-rated big names.

For now, neither of these apps offers the same budgeting help as the newer players, but they're decent options if you want to stick with a name you know and normally do a lot of mobile banking.

Barclays bank app logo
  • Barclays – 76% rated it 'great' for usability; 69% 'great' for features. 
    As well as letting you check your balance, see transactions and manage payees and recurring payments, the Barclays app lets you deposit cheques and view other accounts via open banking. Download for iOS (rated 4.8/5) or Android (rated 4.6/5).
Lloyds bank app logo
  • Lloyds – 74% rated it 'great' for usability; 66% 'great' for features.
    Well-rated by MoneySavers for both features and usability, the Lloyds app gives you instant spending notifications, lets you see transactions on a map and helps you manage monthly subscriptions. Download for iOS (rated 4.8/5) or Android (rated 4.7/5).

What can other banks' apps do?

In addition, we wanted to know what other banks are doing in terms of offering budgeting help, letting you freeze your card and other app features.

  • We asked 17 banks what features their apps have...

    Provider Freeze debit card in-app? Instant spending notifications? Spending categories? Turn off certain spending? Any other features?
    Bank of Scotland ✓ ✓ ✓ ✓ See list
    Barclays ✓ ❌ ✓ ✓ See list
    Co-op ❌ ❌ ❌ ❌ -
    First Direct ✓ ❌ ❌ ❌ -
    Halifax ✓ ✓ ✓ ✓ See list
    HSBC ✓ ❌ ❌ Gambling block See list
    Lloyds ✓ ✓ ✓ ✓ See list
    M&S Bank ❌ ❌ ❌ ❌ -
    Metro Bank ✓ ❌ ✓ ❌ See list
    Monzo ✓ ✓ ✓ ✓ See list
    Nationwide ✓ ❌ ❌ ❌

    Savings goals
    NatWest ✓ ❌ ✓ Restrict online/phone use
    		 Savings goals
    RBS ✓ ❌ ✓ Restrict online/phone use Savings goals
    Santander ✓ ❌ ❌ ✓ View card PIN in-app
    Starling ✓ ✓ ✓ ✓ See list
    TSB ❌ ❌ ❌ ❌ Logos for places you've spent
    Virgin Money ❌ ✓ ✓ ❌ Budgeting help
    Last updated September 2020

Want to complain about your bank account?

If your bank has charged you the wrong amount, taken the wrong amount in payment or its service has been atrocious, then you don't have to suffer in silence. It's always worth trying to call the bank first to see if it can help, but if not...

Free tool to help you complain

This tool helps you draft and manage your complaint. It's totally free to use, and it's offered by Resolver, a firm we work with to help people get complaints justice.

RESOLVER – FREE COMPLAINTS TOOL*

If the company won't help, Resolver also helps you escalate your complaint to the free Financial Ombudsman Service.

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