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Monzo to introduce new fees for UK cash withdrawals and card replacements

Monzo to introduce new fees for UK cash withdrawals and card replacements

App-based bank Monzo is introducing new fees for customers who take out cash or order replacement cards from October – though you won't need to pay if you have Monzo Plus or rely on Monzo as your main bank account.

From 31 October 2020, those who use Monzo to withdraw more than £250 over a 30-day period in the UK or European Economic Area (EEA) will be charged a fee of 3%. Those who withdraw more than £200 elsewhere in the world over 30 days are already charged 3% (except those who have Monzo Plus, who have a higher £400 limit before they're charged).

And there will also be a £5 charge for card replacements – though it'll still be free to get a new card if yours expires or is stolen, or if you've been a victim of fraud.

Monzo says that only 21% of its customers will be affected by the new charges, based on how people used their accounts last year. It says that the average Monzo customer only withdraws £36 a month, and 90% have never ordered a replacement card.

If you have Monzo Plus, or you rely on Monzo more for your everyday banking – more on Monzo's criteria for this below – you won't pay fees for any cash withdrawals within the UK or EEA, and will get two free card replacements per year.

See our Digital Banking guide for more on the top banking and saving apps.

Will I have to pay the fees?

Monzo says it doesn't want to restrict access to cash for those who rely on it for their core banking needs, rather than using it as a spending account.

As a result, it will waive cash withdrawal fees within the UK and EEA and give two free replacement cards per year to those who have a Monzo account and meet at least one of the following criteria (or share a joint account with someone who does):

  • You pay in at least £500 to a Monzo account every 35 days AND have at least one active direct debit on the same account.

  • You get a Department for Work and Pensions or Department for Communities payment, such as a state pension or universal credit payment, paid into a Monzo account every 35 days.

  • You get a student loan paid into a Monzo account every eight months.

Monzo says that these criteria help it to work out who uses Monzo as their core bank account – and so might not have free access to cash withdrawals elsewhere – and those who use it as a spending account but will have another main bank account with free cash access.

It will offer the same allowances to those who have its newly-relaunched £5/month premium account, Monzo Plus.

If you meet one of these criteria, these allowances will be applied to your account automatically. But if you're vulnerable or in difficulty, you can contact Monzo and ask if it can exempt you from or refund any fees.

What does Monzo say? 

A blog post about the changes posted on the Monzo website says: "Every time someone takes out cash, we pay the companies that run the cash machines. Right now, around 20% of customers make up more than 80% of our cash machine costs. This means that most of our cash withdrawal costs come from a small minority of customers.

"That's why we're asking people who take out lots of cash with us, but could do that for free with their other bank, to contribute towards those costs.

"It's a similar story with card replacements. Most Monzo customers have never ordered a replacement card, but 1% of Monzo customers order more than one card each year, making up 35% of our total card replacement costs.

"If you need to replace your card because you've been the victim of fraud, if it's been stolen, or if it expires, we'll always replace it for free in the UK. But if you need more cards for another reason, we'll now ask you to cover that cost in some circumstances."