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app-based banking

Top App-based Bank Accounts

How good is your bank's app?

Chris Owen
Chris Owen | Edited by Johanna Noble
Updated 2 September 2021

Digital challenger banks have revolutionised the way we bank on our phones – not only can you see what you've spent, they also give you a hand with budgeting and saving. Traditional banks have also improved their apps in response so they're not left behind. Yet it's best to also read Best Bank Accounts too before picking a new account, as the app isn't the only thing that matters when choosing a new bank.

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

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What is digital banking?

If you 'do' digital banking, it means you use an app for all, or most, of your banking. Our focus in this guide is on app-based banks, which 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 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.

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

    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 notification on your phone telling you what you've spent.

    This helps you spot fraud too. If you get a notification that 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). 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 if you're accepted.

Do note these accounts can be beaten if you're looking for £100+ to switch, monthly cashback, or interest. But if you're after a high-tech account, these are our top picks. We've also included MSE users' app ratings from our most recent banking apps poll.

Top app-based bank accounts

Useful spending notifications, great for budgeting + top for overseas use. Starling Bank* gives real-time notifications when you use your debit card, insights into your spending and lets you set up savings goals. You also earn a (very) 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. 



Starling Bank*

Overseas fees: None

In-credit interest (AER variable): 0.05% up to £85,000

How to pay in? Cash at any Post Office, cheques via app/post
Arranged overdraft cost (AER variable): 15%, 25% or 35% 

Unarranged overdraft cost: None
Get the app: iOS (rated 4.9/5) or Android (rated 4.7/5)
MSE users' app rating: 84% 'great' for usability, 83% 'great' for features
Helps you budget & also offers savings accounts with partner banks. Monzo has similar features in that you get real-time spending notifications and insights in to where you're spending. It's also good for overseas use, particularly if you won't withdraw cash or will only get small amounts. The difference comes with savings – as well as letting you set up 'pots', Monzo lets you 'move' savings to an account with a partner bank, so you get decent interest – though top-pick savings usually have better rates.


 

Monzo

Overseas fees: None on spending, though worldwide ATM withdrawals only fee-free up to £200/30-day period, 3% fee after (i)

In-credit interest (AER variable): None
How to pay in? Cash at any PayPoint (£1 fee), cheques via post
Arranged overdraft cost (AER variable): 19%, 29% or 39%

Unarranged overdraft cost: As above if applicable, or 39% (max £15.50/mth)
Get the app: iOS (rated 4.9/5) or Android (rated 4.7/5)
MSE users' app rating: 84% 'great' for usability, 92% 'great' for features

(i) In the UK, EU, Iceland, Liechtenstein and Norway, it's fee-free up to £250/30-day period, 3% fee above. Though if you use Monzo as your main account (eg, pay in £500+/mth and have one or more direct debits) it's always fee-free in these areas. See full info. 

Top-rated traditional banks' apps

You may want a slick app, but from a banking name you know. We ran a banking apps poll earlier in 2021 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 apps from the traditional banks.

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 you normally do a lot of mobile banking.

Barclays bank app logo
  • Barclays – 77% rated it 'great' for usability; 68% 'great' for features. 
    The Barclays app rates the best of the apps from the traditional banks. Our pick of Barclays accounts is its Bank Account. It's nothing special in and of itself, but you can add its Blue Rewards scheme which, for a £4 monthly fee, will pay you at least £7/mth back (more if you have other Barclays products).

    The app will let you check your balance, see transactions and manage payees and recurring payments. Plus you can deposit cheques by taking a photo, and view accounts with other banks via Open Banking. Download the app for iOS (rated 4.8/5) or Android (rated 4.6/5).
Lloyds bank app logo
  • Lloyds – 74% rated it 'great' for usability; 62% 'great' for features.
    The Lloyds app is also well-rated by MoneySavers for both features and usability. Our pick of accounts here is Club Lloyds, which pays interest of up to 1.5% when you have up to £5,000 in the account. However, you'll need to be able to pay in £1,500+/mth, or you'll be charged a £3 monthly fee to keep the account. You can also qualify for rewards, including cinema tickets, movie rentals or magazine subscriptions.

    The Lloyds app gives you instant spending notifications, lets you see transactions on a map and helps you manage monthly subscriptions. Download it for iOS (rated 4.8/5) or Android (rated 4.7/5).

What can other traditional 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. This table summarises what they offer...

App features by bank

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
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 ❌ ❌ ❌ ❌  
Virgin Money ❌ ✓ ✓ ❌ Budgeting help
Last updated: September 2020

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