Best Free Online Bank Accounts in the UK: Fees, Features, and More

Starling Bank in Short

UK-based digital-only Starling Bank was founded by Anne Boden in 2014 and has gone from strength to strength in its bid to shake up the banking sector. Determined to embrace the sector’s technological changes, the neobank received its UK banking licence in 2016 and launched the UK’s first mobile-only current account in 2017.

When it comes to the accounts on offer, Starling Bank is a bit of an all-rounder. As well as offering personal and joint accounts for adults, customers can also choose from a debit card for younger children and an account for teens. Businesses are also catered for, with the neobank offering a business account for limited companies and other registered businesses, as well as sole traders.

What Monito Likes About Starling Bank

• Innovative features and services that can be managed in-app.
• Categorised spending insights that make it easier to budget.
• Interest paid on account balances.
• No monthly account fees.
• Fee-free ATM withdrawals and transactions abroad.
• Google Pay, Samsung Pay, Apple Pay, Fitbit Pay, Garmin Pay compatibility.

What Monito Dislikes About Starling Bank

• Overdrafts are charged at 15% EAR.
• Replacing a card lost overseas could cost £60.
• Interest of -0.5% is payable on balances in the euro account of over €50,000.

Monzo in Short

Having some of the most competitive rates out there, opening a Monzo account and using it within the UK is completely free to do. However, it's only when you go abroad that you'll find yourself subject to a 3% fee on cashpoint withdrawals over £300. per month. In addition, you'll also be met with a £0.50 per day fee if your account falls into overdraft.

As of 30 October 2020, Monzo introduced a 3% fee on UK cash machine withdrawals that exceed £250 per month. While travelling abroad, you’ll be allowed to withdraw up to £200 in cash for free every month, after which a 3% fee on each withdrawal will apply. In addition, Monzo will also be introducing a £5 fee to replace a lost Monzo card after 30 October 2020.

In terms of exchange rates, Monzo will offer you a good deal all-round. The online bank itself charges no additional exchange rate margins on the margins already levied by Mastercard. This means that the exchange rate margins you do end up paying will be relatively low, typically around 0.80% of the total transfer.

What's more, Monzo goes above and beyond to provide this information to you unambiguously and transparently on its website — to a much greater degree, in fact, than many banks, challenger banks, and currency exchange services do.

What Monito Likes About Monzo

• Easy to set up and free to use.
• Flexibility over savings goals.
• Handy in-app bill splitting feature that works instantly.
• Joint accounts can manage rent and bills.
• Smart features to manage your budget, instant mobile notifications, and a well-designed app.

What Monito Dislikes About Monzo

• Free withdrawals abroad are limited to £200 per 30 days.
• Only available in the UK.
• Debit and credit card top-ups aren't supported.

Monzo Plans

Monzo offers three different types of accounts:

• Monzo: The simple Monzo account has no monthly fee. Cashpoint withdrawals are free up to £250 a month in EEA countries and the UK, and up to £200 a month in countries outside the EEA. After that, you’ll be charged 3%.
• Monzo Plus: This account costs £5 per month and offers interest of 1% AER on balances up to £2,000. You’ll get fee-free cash machine withdrawals in EEA countries and the UK, but they are limited to £400 per month in non-EEA countries. Anything over is charged at 3%.
• Monzo Premium: This account costs £15per month and pays interest of 1.5% AER on balances up to £2,000. Cash machine withdrawals in EEA countries and the UK are free, while withdrawals outside the EEA are free up to £600 each month. Anything over your allowance is charged at 3%.

Wise in Short

Applying for a Wise Multi-Currency Account is fast and easy and can be done not only with a UK proof of residence, but any proof of residence in the EU/EEA and many other countries worldwide. Once you're signed up and your card has arrived (which takes two to six working days), you'll be able to take advantage of the following unique features with the account:

• Local bank details in the UK, Eurozone, US, Australia, New Zealand, Singapore, Romania, Canada, Hungary, and Turkey;
• Hold, exchange, and top-up up to 56 currencies;
• A multi-currency Visa debit card that's handy for paying in foreign currencies without hidden fees;
• Access to Wise's powerful international money transfer service right from your account balance.

What Monito Likes About Wise

• Account details in as many as 10 currencies.
• Hold money in 50+ currencies.
• Send money to 80+ countries from your account.
• Some of the lowest money transfer fees available on the market.
• Pricing is accessible and transparent.
• Mid-market exchange rate offered for currency transfers.
• Debit card can be used to avoid foreign transaction fees.
• No setup fees or monthly charges.

What Monito Dislikes About Wise

• Cash or cheque payments aren't supported.
• Overdraft and loans aren't available.
• Negative interest on large euro account balances.
• Fees to top up the account via debit and credit card.
• Tight limits and conditions to fee-free cash machine withdrawals.

How Wise Works

To get a sense of just how useful Wise can be for frequent travellers and expats, let's say that you're travelling from the UK to Spain and you'd like to spend in euros while on holiday there. With the Wise Multi-Currency Account, you'll be able to:

1. Send British pounds from your bank account to your Wise euro account;
2. Convert to euros at a low fee (e.g. if you add €1,000 and pay with British pounds, the total fee will be around 0.35% or £3*);
3. Pay with your Wise debit card, make or receive SEPA (and SWIFT) payments, and even set up direct debits!

You'll also have a dedicated set of Belgian bank details to share with an employer in Europe. Belgian IBANs are fully eligible in the eurozone, and rejecting the payout or receipt of funds based on the origin of an IBAN is illegal. Note that this account does not offer an overdraft, and you won’t earn interest on any in-credit balances.

It's for the above reasons that we think Wise is the best online multi-currency account available to UK nationals and a product we firmly recommend for holidaymakers, online spenders, and expats alike.

* Conversion made on 05/11/2021

Monese in Short

While an interesting product all-round, we find Monese's weakest point to be its pricing for foreign currency spending and cash machine withdrawals. While its day-to-day fees are admittedly still relatively low in general — at least compared to traditional banks — Monese's 'Starter' plan, for example, charges £1.50 per cash withdrawal, 2% on all non-GBP, EUR, SEK, and RON foreign currency transactions, and an additional 1% on weekends.

What Monito Likes About Monese

• Available even without a UK or EU proof of residence.
• Money transfers to over 30 other countries.
• Supports joint accounts and virtual cards in the UK.

What Monito Dislikes About Monese

• Does not offer overdraft, interest, or loans.
• Upgrading plans usually does not equal lower costs.
• High conversion fees for non-GBP, EUR, SEK, and RON spending.
• Weekend surcharges apply to currency exchange.

Monese Plans

Over and above the 'Starter' plan discussed until now, here are four types of current accounts Monese offers:

• Starter: If you want to limit the up-front costs, go for the Simple account. It’s a full UK current account with no monthly costs and includes a free debit card. However, you will be charged £1.50 on all cash machine withdrawals (unlike most UK challenger banks there is no free monthly allowance) and a 2% fee on foreign currency commission on all non-GBP, EUR, SEK, and RON transactions. There is also a 2.5% fee for foreign exchange transfers when sending to non-Monese accounts, which bumps up to 3.5% on weekends.
• Essential: This plan costs £1.95 per month and has a free cashpoint withdrawal limit of £200 per month, with 2% being charged after that. Foreign currency spending comes at a slightly lower 0.5% per transaction on this plan.
• Classic: Classic accounts cost £5.95 per month and offer free cashpoint withdrawals up to £500 a month. After this, a 2% fee applies. While foreign currency card spending is free on this plan, foreign currency exchange transfers to non-Monese accounts incur a 0.5% fee. As with the 'Starter' and 'Essential' plans, it’s a full UK account with a free debit card.
• Premium: Premium accounts cost £14.95 per month and offer unlimited UK cashpoint withdrawals, free foreign currency card spending, and foreign currency exchange transfers. Once again, it’s a full UK account with a free debit card — one which you can read more about in our dedicated Monese Premium review.

All Monese plans can be paid annually with a discounted monthly rate of anywhere between 20% and 40%.

If you were to open up another type of account, you'd save on fees for international money transfers, among other services, but you'd pay a monthly fee on the bank account. For example, for a 'Classic' account, your monthly fee will be £5.95, while for a 'Premium' account, your monthly cost would be £14.95.