Digital Banking

Top current account apps

app-based banking

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.

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.

So, 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. But, 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.

Quick questions

  • The apps in this guide all work with Android and iOS phones, so you should be able to download them if you've one of those, provided it's relatively up to date.

    Unfortunately, if you have a Windows Phone or other smartphone/tablet, you WON'T be able to get any of the new apps in this guide – though you can get traditional banks' apps (see Cheap Mobile Tips if you want a new phone).

  • Many apps, including Starling and Monzo, allow you to deposit cheques by taking a picture of the cheque within the app, or posting them.

    With cash deposits, Starling allows you to pay cash in for free at any Post Office branch. With Monzo, you can deposit cash anywhere that has a PayPoint terminal – though it costs £1 per deposit, so is worth avoiding if you can.

    For apps from the big names, such as Barclays, Lloyds and NatWest, you can head into a branch to deposit cash and cheques.

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

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The six digital banking need-to-knows

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

  • 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 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.

  • 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.

  • 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 in to 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.

    Quick question

    • Yes. If the provider's signed up to the Current Account Switch Service (CASS), this process is quick and seamless and works the same way as switching to a traditional bank. It takes seven working days, all payments going in, eg, salary, and out, eg, utility bill direct debits, are moved to your new account, and any wrongly applied charges will be refunded. For more on this, see Best Bank Accounts.

      Both Monzo and Starling are signed up to CASS, so switching should be quick and simple.

  • New banks are making it easier to manage if you have a lapse of memory – they can give you PIN reminders in-app, rather than making you wait several days while they post you a new one. 

    You'll still need to enter a passcode or use 'Face ID' or 'Touch ID' fingerprint recognition to get into the app though, anyone can't just use your phone and steal your PIN (though be aware that anyone else whose face or fingerprint's registered to unlock your phone could also unlock your accounts if you've enabled Face ID or Touch ID on them too).

    App-based banks also let you easily freeze and unfreeze your debit card if you've temporarily misplaced it. However, this is now common among the big-name banks too – we list which in our table below.

  • 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 in to a hard search. This is to let other lenders know that you've applied for credit with that particular bank. 

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

  • 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

For the challenger banks below offering current accounts, you apply through their apps and the process is quick and easy, typically taking a couple of minutes. Both banks have the full £85,000 UK savings protection under FSCS.

These accounts can be beaten if you're looking for accounts paying you £100+ to switch to them, or accounts that give cashback or other rewards. But, if you're after a high-tech account, these are our top picks.

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

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, though it's possible this'll change in future.

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

  • 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, contactless payments or ATM withdrawals if you want to control a specific type of spending.

    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.

    Finally, it also has a 'marketplace', which lets you use other companies' services through its app. Its main focus is on investing and insurance, but there's no need for you to take out any of the products in the marketplace if they're not suitable.

  • You can make up to six cash withdrawals a day, totalling a maximum of £300.

  • 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.

  • 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.

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

  • 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.
  • 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

Budgeting help & good for overseas use

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. ATM withdrawals are currently fee-free in the UK, EU, Iceland, Liechtenstein and Norway, and fee-free up to £200 in any 30-day period elsewhere – though this is changing from 31 October (see FAQs).

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 4.5/5) or Android (rated 4.4/5)
Member of CASS? Yes
Overseas fees: No spending fees. ATM withdrawals currently fee-free in UK, EU, Iceland, Liechtenstein and Norway; fee-free up to £200/30-day period elsewhere (3% above).

  • 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.

    You can open a 'regular pot' or, if you've at least £500, a 'savings pot'. Cash in a savings pot 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.

  • Currently, ATM withdrawals are completely fee-free in the UK, EU, Iceland, Liechtenstein and Norway and fee-free up to £200 in any 30-day period elsewhere (3% fee above).

    From 31 October, Monzo will charge some users a 3% fee for withdrawals above £250 in any 30-day period in the UK, EU, Iceland, Liechtenstein or Norway. You won't have to pay this fee if you use Monzo for your everyday banking or pay for Monzo's premium account (see more info).

     

  • You can withdraw up to £400/day from ATMs, up to a maximum of £5,500/month.

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

    If you're withdrawing cash overseas, it's totally fee-free in the EU, Iceland, Liechtenstein and Norway, and fee-free up to £200 in any 30-day period elsewhere (3% fee above) – though see above for how this will be changing from 31 October.

  • 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.

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

  • 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'.

  • 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).

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 – 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 temporarily freeze your card and get PIN reminders. Download for iOS (rated 4.8/5) or Android (rated 4.6/5).

  • Lloyds – 74% rated it 'great' for usability; 66% 'great' for features. Lloyds' current accounts don't currently feature in our top picks, but if you want the app it's well-rated by MoneySavers for both features and usability. It lets you check your balance, see transactions (including pending ones), manage payees and temporarily freeze your debit card. 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.

  • Provider Can you freeze card in-app? Instant spending notifications? Spending categories? Turn off certain spending?

    Any other features?

    Bank of Scotland View accounts with other banks via open banking, manage monthly subscriptions, see transaction locations on a map, round up transactions for savings and deposit cheques in-app
    Barclays
    (debit cards only)

    View current accounts with other banks via open banking, set 24 hour card spending limits, deposit cheques in-app and view your card PIN

    Co-op -
    First Direct -
    Halifax View accounts with other banks via open banking, manage monthly subscriptions, see transaction locations on a map, round up transactions for savings and deposit cheques in-app
    HSBC
    Gambling block Deposit cheques in-app, see what your balance will be after bills are paid
    Lloyds View accounts with other banks via open banking, manage monthly subscriptions, see transaction locations on a map, round up transactions for savings and deposit cheques in-app
    M&S Bank -
    Metro Bank See insights on spending, get notified of large payments & new bill amounts
    Monzo
    Set spending budgets and create custom savings categories, split bills with others, round up transactions for savings, view card PIN in-app
    Nationwide
    (debit cards only)
    Set savings goals
    NatWest
    (credit cards only)
    Gambling block (credit cards only) Set savings goals
    RBS
    (credit cards only)
    Gambling block (credit cards only) Set savings goals
    Santander View card PIN in-app
    Starling Split bills with others, round up transactions for savings, view card PIN in-app, create custom savings categories
    TSB Company logos to see where you spend
    Virgin Money
    (credit cards only)
    Budgeting help
    Last updated September 2020

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