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The UK's Best Challenger Banks 2022: Fees, Exchange Rates, Usability, Features, and More

Byron Mühlberg, writer at Monito.com
Dec 1, 2022
Affiliate disclosure

By offering competitive pricing and slick, user-friendly web and mobile apps, a slew of so-called 'challenger banks' has burst onto the UK scene in recent years, attempting to dislodge traditional banks such as Barclays and HSBC from the top spot in the eyes of customers.

In 2022 — as both the popularity and the market share of these challenger banks continue to grow steadily — you may find yourself wondering which of the many options available offers the best all-round service to suit your needs. In this guide, we whittle down the top challenger banks in the UK fintech scene to only three major contenders and explore which one might make sense for you.

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We recommend Starling Bank as the best challenger bank if you're looking for an (almost) fee-free alternative to high-street current accounts. On the other hand, if you don't need a fully-fledged bank account but a bank-like app for flexible spending at home and abroad, we recommend using Revolut instead next to your primary bank account.

How We Score Challenger Banks

To determine which challenger banks scored better than others within the UK market, we used a consumer-first framework to analyse several key factors.

To begin, we weighed several concrete metrics such as fees and rates, ease of use, credibility, service and coverage, transparency, and customer satisfaction to piece together a reliable all-round picture of which top challenger banks offer the savviest solutions in the UK.

Next, we explored these results and presented our findings in the form of a series of key takeaways that we believe you should know about the three challenger banks ranked highest.

While we ranked these challenger banks on an overall list, remember that this list does not mean that our choice for the UK's best challenger bank is necessarily the best choice for you. As you'll see, each service has its unique set of pros and cons that may be relevant to your situation — pros and cons you should be mindful of if you're looking to open an account with one of these challenger banks.

So, without further ado, let's go through our rankings for the top challenger banks in the UK in 2022:

3rd Best Challenger Bank: Revolut

Arguably the world's most widely-known name in the challenger bank sphere, Revolut has stood at the forefront of Europe's low-cost online financial services sector in recent years. With over 12 million users, the London-based fintech is not only available in the UK and the EEA but across the world, including Australia, Canada, Singapore, Switzerland, Japan, and the US.

While a fully-fledged bank in many European countries, Revolut is currently not yet organised as a bank in the UK. Still, Revolut offers a range of financial services typical of banks, making it an attractive alternative to traditional banks due to its unique ability to offer low fees and an impressive scope of service.

Opening up a 'Standard' account with Revolut is completely free, but the delivery of the first bank card will set you back £4.99. While ATM withdrawals are also free, a 2% fee will be charged on all withdrawals after the first £200 every month. What's more, transferring money to other Revolut users is not only free but instant. This makes the service a reliable choice if those you most frequently send money are also Revolut users themselves.

In addition, Revolut offers low fees on international money transfers, leaving the service an attractive choice for those who send money across borders frequently. They charge no exchange rate margins on weekdays, with users only subject to a flat 0.50% fee on all transfers sent abroad. However, Be aware that Revolut charges twice the fee for international money transfers made on weekends — bumping the fee to 1% on Saturdays and Sundays.

Here's a full overview of Revolut's different account offerings:

  • Standard: With zero up-front costs, the Standard option offers a full UK current (plus an IBAN) account with no monthly fee and a free debit card. ATM withdrawals are free up to five withdrawals or £200 per month (whichever comes first). After that, it costs 2% of the value of the ATM withdrawal.
  • Plus: Plus accounts cost £2.99 per month, including a debit card. ATM withdrawals are free of charge up to £200 per month, after which a 2% fee applies. 
  • Premium: Premium accounts cost £6.99 per month, including a debit card, and there are no fees for ATM withdrawals up to £400 per month. After that, it costs 2% of the value of the ATM withdrawal.
  • Metal: Metal accounts cost £12.99 per month, including a debit card. ATM withdrawals up to £800 per month are free, and after that, it costs 2% of the value of the ATM withdrawal.
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2nd Best Challenger Bank: Monzo

Monzo has built up a distinguished service record in recent years as one of the oldest online-only challenger banks in the UK. In fact, since its founding in 2015, the bank has grown to serve over four million UK customers, many of whom make up a large and active support community online.

Monzo offers three different types of accounts:

  • Monzo: The simple Monzo account has no monthly fee. ATM 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 ATM 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 £15 per month and pays interest of 1.50% AER on balances up to £2,000. ATM 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%.

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 ATM 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 ATM 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.

Regarding 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.

Best Challenger Bank: Starling Bank

Starling Bank is a fully-authorised bank in the UK that's well known for its fee-free current account. In fact, because this account is completely free and gives you access to an impressively complete range of financial services (including overdraft, loans, joint account, youth card, pensions, Euro balance, interest, etc.), we think Starling offers the best challenger bank in the UK — one we recommend as a complete replacement for an account at a high-street bank.

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.

Starling Bank is a bit of an all-rounder regarding the accounts on offer. 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, other registered businesses, and sole traders.

Account name: Personal Account

Potential costs: £20 per CHAPS transfer in the UK, 0.4% + £5.50 for international SWIFT transfers, £5 for a replacement debit card.

Noteworthy features: Saving Spaces, pension scheme, youth card, interest, overdraft.

Side-by-Side Comparison

Take a look at the table below to see how Starling Bank, Revolut, and Monzo stack up head-to-head:

Starling Bank

Monzo

Revolut

Plan

Personal account

Monzo

Standard

Monthly Fees

£0

£0

£0

ATM Fees Abroad

0%

3% (after first £200 p/m)

2% (after first £200 p/m)

Card Fees Abroad

0%

0%

2% (after first £6,000 p/m)

International Transfers

0.35%-2.5%

0.35%-2.85%

  • 0%-2% on first £1,000
  • 2% thereafter

Card Delivery

£0 (arrives in 5-7 days)

£0 (arrival in up to 5 days)

£4.99 (arrives in up to 9 days)

Express Card Delivery

-

-

£11.99 (arrives in up to 3 days)

Card Model & Design

Light green Mastercard

Coral red debit Mastercard

Violet debit Mastercard/Visa

Contactless

Google Pay

Apple Pay

3D Secure

Currencies Available

GBP, EUR, USD

GBP

GBP, EUR, USD and 30+ others

Top-Up Methods

  • Bank transfer
  • Cash deposit (PayPoint location)
  • Cheque
  • Bank transfer
  • Cash deposit (PayPoint location)
  • Cheque
  • Bank transfer
  • Debit/credit card

Direct Debit

EUR accounts only

Savings Interest

0.05%

Up to 3.46%

Up to 2.25%

Overdraft Facility

Joint Account Availability

Platforms

Mobile app only

Mobile app (web app for emergency use)

Mobile app only

FSC-Insured

Number of UK Customers

2.7 million

5.8 million

7+ million

Try Starling BankTry MonzoTry Revolut

Last updated: 01/12/2022

Best Challenger Bank in the UK: Our Verdict

With all the nuts and bolts in place, you're likely wondering which challenger bank is the right choice for you. Well, in the end, that will depend on your unique personal circumstances:

Monzo: Best for Savings

Monzo is an excellent choice of online bank if you're looking to escape the high fees of traditional banks. This is especially the case if you spend most of your time within the UK and don't plan to use your bank card for travelling abroad. This is because Monzo offers no fees for regular card use within the country, making it an attractive option for UK nationals.

Revolut: Best for Foreign Currency

An excellent service all around — especially for those who value the range of services offered by traditional banks but who wish to cut down on the high fees — Revolut is a versatile and trustworthy service that deserves your attention if you're looking to open an account with a challenger bank.

Not only will you have access to a broad spectrum of financial services on a scale that makes Revolut unique among the UK's challenger banks, but you'll also be able to take advantage of these services at a comparatively low price. As a result, if avoiding the high fees of traditional banking while retaining a broad scope of service is essential to you, then we roundly recommend Revolut.

Starling Bank: Best All-Round

Though Monzo and Revolut are great options, if you're looking for the UK's best online bank of all, we firmly recommend Starling Bank. In our opinion, Starling combines the ease of online finances with the trust of institutional banking in a way unmatched by other British challenger banks. Plus, its current and savings accounts are almost entirely fee-free!

Other Worthy Mentions

In addition to the three challenger banks we explored above, we'd be remiss not to mention the following ones too:

Wise: A Challenger Bank Alternative

Another option available to UK residents is Wise's Multi-Currency Account, which offers a fully-fledged multi-currency account in 10 global currencies (including in British pounds), a physical debit Mastercard, and an optional virtual Visa card. In addition, opening a Wise Multi-Currency Account allows users to take advantage of the following features and services:

  • Local bank details in the US, Eurozone, UK, Australia, New Zealand, Singapore, Romania, Canada, Hungary, and Turkey;
  • An account to hold up to 56 currencies;
  • Access Wise's powerful money transfer service right from your existing account balance.

While not a challenger bank in the strict sense (Wise's primary offering is still international money transfers), the London-based fintech has been expanding its offering over the past several years to offer a multi-currency debit card, foreign currency bank details and other bank-like services. It seems likely that Wise will join the ranks of UK challenger banks in the not-too-distant future.

What About N26?

If you're familiar with the UK fintech scene or have done your homework on the best options for challenger banks in the country, you may wonder why N26 doesn't appear on our rankings.

Simply put, this is because the German digital bank announced in February 2020 that it would be dropping its business in the UK following the country's exit from the European Union.

As a result, the country's 200 thousand customers were required to change bank accounts by April that year, leaving the digital bank high and dry in the UK market. Therefore, despite the prominence of N26 as a challenger bank in the neighbouring EU, the service is no longer available to you as a customer in the UK.

FAQ About Challenger Banks in the UK

Filter your results

Compare the UK's Top Challenger Banks

  1. Starling Bank
    Starling Bank Monito Score 9.1
    open
    • Languages
      English
    • Country availability
      United Kingdom
    • Services
      Full bank account
    • Monthly fee
      Very low
    • Card delivery time
      Mid
    • Best for
      Everyday banking
    • Bank details
      UK account no. & sort code
    • Supported currencies
      Pound sterling
    • Overdraft true
    • Annual interest rate
      Low
    • Supports cash deposits true
    • International transfers true
  2. Monzo
    Monzo Monito Score 9.0
    open
    • Languages
      English
    • Country availability
      United Kingdom
    • Services
      Full bank account
    • Monthly fee
      Very low
    • Card delivery time
      Fast
    • Best for
      Everyday banking +1
    • Bank details
      UK account no. & sort code
    • Supported currencies
      Pound sterling +2
    • Overdraft true
    • Annual interest rate
      High
    • Supports cash deposits true
    • International transfers true
  3. Wise Multi-Currency Account
    Wise Multi-Currency Account Monito Score 8.9
    open
    • Languages
      English +21
    • Country availability
      Austria +37
    • Services
      Multi-currency account
    • Monthly fee
      Very low
    • Card delivery time
      Mid
    • Best for
      Spending while abroad
    • Bank details
      Euro IBAN +11
    • Supported currencies
      US dollar +50
    • Overdraft
    • Annual interest rate
      Very low
    • Supports cash deposits
    • International transfers true

Read More About the Top UK Challenger Banks and Fintechs

Monzo Review
December 1, 2022 - by Olivia Willemin
Starling Bank Review
October 18, 2022 - by Rachel Wait
Curve Review
October 17, 2022 - by Byron Mühlberg
Pockit Review
December 31, 2021 - by François Briod
Monese Review
October 19, 2022 - by Laurent Oberholzer
Revolut Review
October 18, 2022 - by François Briod
Wise Account Review
October 19, 2022 - by François Briod
7 Best Online Business Bank Accounts for UK Small Business
November 17, 2022 - by Jarrod Suda
Best Online Banks in Europe
November 30, 2022 - by Byron Mühlberg
Top 10 Online Small Business Checking Accounts in the USA in 2022
November 25, 2022 - by Jarrod Suda
Best Free Bank Accounts UK
November 30, 2022 - by Byron Mühlberg
Best US Neobanks
November 25, 2022 - by Olivia Willemin
The Best Bank for Expats
November 30, 2022 - by François Briod
The 11 Best International Business Banks in 2022
November 25, 2022 - by Jarrod Suda
Revolut Business Review: Is it safe? How does it work? What are the rates?
November 25, 2022 - by Rachel Wait
These Are the Easiest Bank Accounts To Open Online in the US
November 25, 2022 - by Byron Mühlberg
7 Best Bank Accounts With No Deposit Required
November 25, 2022 - by Jarrod Suda
Novo Business Review
November 25, 2022 - by Jarrod Suda
Best Virtual Banks in Canada in 2022
November 24, 2022 - by Jarrod Suda
N26 Metal Review
November 23, 2022 - by Olivia Willemin
Capital One Bank Review: Is it safe? How does it work? What are the rates?
September 15, 2022 - by Olivia Willemin
Juno Review
August 15, 2022 - by Byron Mühlberg
Apps Like Chime
September 30, 2022 - by Byron Mühlberg
Can I Open a Free Online Bank Account Without an ID?
October 19, 2022 - by Jarrod Suda
Banks Like Simple
October 8, 2022 - by Byron Mühlberg
Banks Like Varo
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