Top 10 Digital Banks in the UK
Best Digital Bank in the UK - Revolut
TOP Digital Banks in the UK:
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Revolut — probably the UK's most famous fintech;
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Monzo Bank — one of the most famous online-only accounts and is a regulated bank in the UK;
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Wise — offers some of the cheapest international transfers online;
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Starling Bank — one of the largest banks in the UK;
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Curve Bank — a UK fintech company started in 2015, provides a smart card and app.
Many consumers have never set foot inside a brick-and-mortar bank thanks to the power of digital banking. In addition to enabling cashless transactions at a wide range of stores, digital banking is expanding beyond accessing everyday banking functions on a computer or mobile device. It’s now.
But what does "digital banking" mean for your finances, and how does it work?
Below you will find information on what digital banking is, what it includes, and the best digital banks in the UK.
What is a Digital Bank?
Digital banks have no branches. So, their services are only available online. In order to become a client of a digital bank, you need to download the mobile application and register on the website. Customers must provide their identification details on digital platforms, but no physical copies of documents are required. It's as simple as scanning them with your smartphone and sending them for approval. The features of the site will be available to you once your account has been accepted.
Below are the many features many digital banks have to offer;
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The storage of financial and personal information
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Customer funds are kept in custody
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Processing payments and conducting transactions
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The creation of reports
👍 Pros
•Low fees: Some online banks don't charge monthly fees, and other fees tend to be lower, too.
•Less mail: Traditional banks allow you to do some extent, but a digital bank eliminates paper altogether.
•Convenience: Using digital banking apps on mobile devices, customers can view their account balances, pay bills, transfer money, apply for loans, and make purchases on the move. You don't have to sit in front of a computer or visit a branch to make online payments.
•Higher interest rates: Savings, CDs, and money market accounts at online banks can offer higher rates than those at traditional banks.
•Security: Thanks to the latest online security technology, digital banks are extremely secure. You won’t have to worry about someone gaining accessing to your personal information since digital banks use the latest encryption methods to protect your data. Aside from that, they often keep your money safe with multiple layers of security, including passwords and PINs.
•No working hours: You can do your banking at any time, day or night, with digital banks. You can access the site at any time that’s convenient for you. Since digital banking allows you to access your account anywhere and anytime as long as you are connected to the internet, you don't need to wait in long lines at bank branches.
👎 Cons
•No physical locations: A major disadvantage of digital banks is that there are no physical locations. Sometimes, it's nice to talk with someone face-to-face. While almost every banking task can be accomplished with a device in your hand, some customers to deal with a person. You'll only be able to contact a digital bank via phone, email, or live chat.
•ATM and transfer fees: Since some digital banks don't have as many ATMs, you'll have to pay extra when you use another bank's machine.
•It can be difficult to deposit cash: Most online banks allow you to deposit paper checks through their mobile apps. Some online banks don't accept cash deposits. Others let you deposit cash at certain ATMs at various locations.
List of the Best UK Digital Banks
When choosing the best digital banks in the UK, we took into account a wide range of parameters, such as lending and deposit rates, investment opportunities, commissions, regulation in the UK, and more.
| Bank | Is it Regulated in the UK? | GBP support | Loan rate/credit rate | Account fee | |
|---|---|---|---|---|---|
|
No |
Yes |
4.80% APR |
No fee for standard account, premium and and metal plans may incur fees |
||
|
Yes |
Yes |
8.9% for loans more than £10,000, up to £25,000, and 23.9% for loans |
£5 per month for Monzo Plus |
||
|
Yes |
Yes |
N/A |
No fee |
|
|
|
Yes |
Yes |
APR 4.9% |
No fee |
||
|
Yes |
Yes |
N/A |
No fee |
|
|
|
Yes |
Yes |
N/A |
£14.95 per month |
|
|
|
Cashplus |
Yes |
Yes |
As low as 19.9% for business accounts, 57.07% for personal accounts |
£5.95 per month |
|
|
Pockit |
Yes |
Yes |
N/A |
£1.99 per month |
|
|
bunq |
Yes |
Yes |
N/A |
£2.99 per month |
|
|
Atom |
Yes |
Yes |
N/A |
No fee |
1. Revolut
There's a good chance you've heard of Revolut, probably the UK's most famous fintech. With its innovative banking platform, you'll be able to access a variety of financial services unique among online banks, but you'll also be able to take advantage of these services at a comparatively low price.
👍 Pros
•Currency conversion at the interbank rate
•Hold foreign currency balances easily
•Fee-free ATM withdrawals
👎 Cons
•Monthly charges for some account tiers
•Out of hours currency conversion fees
•Exotic currency fees
2. Monzo Bank
There is no doubt that Monzo is one of the most famous online-only accounts and is a regulated bank in the UK. In the UK and abroad, Monzo doesn’t charge fees for day-to-day card usage (e.g. cashpoint withdrawals and card payments).
👍 Pros
•Easily sign up for a full-service account without a physical address or credit checks
•Great transparency on fees
•Integrates with Apple Pay, Google Pay, and PayPal for contactless payments
👎 Cons
•Currently only available in the UK and Eurozone
•You can only access your Monese account from a single device
3. Wise
Unlike banks in the UK, Wise offers some of the cheapest international transfers online. Wise offers a Multi-Currency Account for foreign currency spending of any kind, whether it be foreign holidays, online shopping, or international transfers. Using the account and card, you can make purchases in foreign currencies at low costs.
👍 Pros
•Account balances in 56 different international currencies
•Currency conversions are fast and cost-effective
•Modern approach to moving money internationally
👎 Cons
•No overdrafts or loans are allowed
•You can’t earn interest
4. Starling Bank
As one of the largest banks in the UK, Starling Bank offers its customers a free current account. It’s a completely free account that offers an impressive range of financial services (i.e. overdrafts, loans, joint accounts, youth cards, pensions, Euro balances, interest, etc.). The Starling online bank is the best in the UK, and we recommend it as a replacement for a high-street account.
👍 Pros
•A sleek mobile app that includes budgeting and saving features, such as spending categorization and saving goals.
•Fully licensed and regulated by the FCA and PRA
•Withdrawals from ATMs abroad are free
•Quick account opening process
👎 Cons
•Only available to UK residents
•Limited transaction volume of £300 per day
•No reimbursement for local ATM fees
5. Curve Bank
A UK fintech company started in 2015, Curve provides a smart card and app that allows you to handle all your bank cards in one place, making it easier to manage spending and gain various benefits. This makes it ideal for people who use many different bank cards but don't want to carry all of them everywhere. It’s not a bank, so it won’t replace your currency bank. However, Curve could replace all your bank cards, as it supports cards of many different currencies and also follows fee-free foreign spending, while useful features are continuously being added.
👍 Pros
•Free bank card
•Registered with FCA
•Cashback rewards
•0% fees for purchases abroad
•Insights spending history
👎 Cons
•Spending / withdrawal limits
• Account setup can take a while
6. Monese Bank
With more than two million customers across the UK and much of Europe, Monese is a mobile-only challenger bank. Monese doesn't require you to prove your residency to open an account in the UK, so it's especially suitable for those new to the UK from the European Economic Area.
👍 Pros
• Easily sign up for a full-service account without a physical address or credit checks
•Great transparency on fees
•Integrates with Apple Pay, Google Pay, and PayPal for contactless payments
👎 Cons
•Currently only available in the UK and Eurozone
•You can only access your Monese account from a single device
7. Cashplus
As a digital-only UK challenger bank, Cashplus provides banking and lending services to consumers and businesses.
In 2005, Cashplus launched the first prepaid card in the UK, and in 2013, it launched the first instant approval online business account. In January 2023, Cashplus secured a full UK bank license and served more than 1.6 million customers at the time.
There is a particular focus on those who have been left out by high street banks. As an example, its Cashplus business account, which can be opened without a credit check, offers a variety of features and benefits.
👍 Pros
•Ideal for those with a bad credit history
•No credit checks required on application
•Manage your account online
👎 Cons
•No free account options
•ATM withdrawal fees
•Only allowed up to 9 free transfers per month
8. Pockit
Nearly half a million people nationwide use Pockit prepaid debit cards. With their own account number and sort code, its users can easily manage their spending and gain valuable insights into their finances.
If you're someone who can't trust yourself to save as efficiently as you'd like, then the LOQBOX could be an option for you. Its functionality is something users praise as well-executed, and if you can't rely on yourself to save as efficiently as you'd like, you might give it a try. By locking away small amounts of money for one year, users can effectively use this feature as a quasi-savings account. In the end, the saved money is returned directly to your prepaid account in full.
It's important to note that Pockit is a prepaid account. Although it can be used as a current account, it can’t be used for savings and loans.
👍 Pros
•Available in the UK
•Soft credit check performed
•Credit builder program
•Cashback rewards with major retailers
•Open online in minutes
👎 Cons
•Too many fees
•Daily, monthly, and yearly limits
•Bad exchange rates
9. bunq
Bunq is a hip challenger bank that aims to attract young people from all over Europe with its sustainable message and travel features. With every €100 spent on Bunq's Green Card, a tree is planted for reforestation.
In 2019, bunq expanded to all European Union, Norwegian, and Iceland markets. You can open a bunq bank mobile-first account online in minutes. All residents of the European Economic Area can open an account with bunq, unlike many other banks.
👍 Pros
•Excellent user experience online and in the app
•Sustainability a priority, plants trees and even have a “Green Card”
•Offers personal accounts, joint accounts, and business accounts
👎 Cons
•All accounts are subscription only
•Some additional fees applicable
•Customer service issues
10. Atom
Atom Bank is the first all-digital bank to obtain a full UK banking license. Atom Bank offers mortgages and savings accounts, but no current accounts. In comparison with its competitors, the bank offers a higher interest rate on savings accounts. The bank also offers vigorous biometric security, instant savers, fixed-rate savings accounts, variable interest rates on savings accounts, mortgages, and more. This digital-only bank is regulated by the FCA and FSCS.
👍 Pros
•No fees for spending in Europe
•Allows free ATM withdrawals across the world
•Built-in savings with interest
•30 days free trial premium account
👎 Cons
•Available only for permanent residents of the EEA (European Economic Area)
•Only supports Euros
•You can’t transfer money abroad with free accounts
How to Choose a Digital Bank in the UK
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Consider app ratings. You can check the bank or credit union's rating on the App Store and Google Play. This is a good indication of how current users feel about the mobile app.
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Think about online usability. Take a look at the institution's website on your preferred browser if you plan on logging in from your laptop or desktop. Check to see if it has the features you need.
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Ensure a great customer experience. It is important that online banks have easy access to customer service since they have little to no branch locations.
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Look for a bank with competitive rates. Many digital banks offer savings accounts with highly competitive yields, often paying more than national average.
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Find a bank with robust ATM networks. Many digital banks are members of large ATM networks, so you can access ATMs near you.
Best UK Digital Bank Fees
Digital banks may require different fees for certain services. For example, some banks may charge fees for monthly maintenance, overdrafts, transfers, foreign transactions, ATM fees, and card replacements.
The analysts of the Traders Union have prepared a detailed comparison of the most popular digital banks in the UK.
| Digital Bank | Overdraft Fee | ATM Withdrawal Fee | International Transfer Fee | International exchange Fee |
|---|---|---|---|---|
Revolut |
None |
2% fee after exceeding withdrawal limit |
0.5%if it exceeds the foreign exchange allowance |
|
Monzo Bank |
None |
3% on withdrawals over £250 every 30 days |
None |
3% |
Wise |
None |
£0.50 if withdrawals exceed two times per month |
0.26 GBP fixed fee, and 3.49 GBP (0.35%) variable fee |
$4.18 +fixed fee $0.42 |
Starling Bank |
15%, 25%, and 35% EAR |
No fee for withdrawals from ATMs in the UK |
0.4% + local fees |
0.4% |
Curve Bank |
None |
£0.50 each after £200 /month free in other currency |
None |
N/A |
Monese Bank |
None |
£1.50 after exceeding 6 transactions |
Starts at 0.5% |
Start at 2.5% |
Cashplus |
None |
£2.00 for ATM withdrawals in the UK, £3.00 for non-UK withdrawals |
£15 flat fee |
None |
Pockit |
None |
£0.99 for ATM withdrawals in the UK, £2.25 plus 4% for non-UK withdrawals |
0.3% to 3.5% |
4% for every ATM withdrawal overseas and adds 0.3% on each international money transfer |
bunq |
None |
£2.99 after first 5 withdrawals |
1.5% commission on the transaction amount and a 0.5% network fee |
None |
Atom |
None |
None |
None |
None |
Best Digital Banking Saving Accounts in the UK
Atom
In contrast to the other digital banks we have discussed, Atom specializes in savings accounts and mortgages, not current accounts. Compared to its competitors, it offers higher interest rates on savings accounts.
When it comes to building your savings with a digital bank, Atom Bank is the best option. Atom Bank has won the Best Online Lender award at the What Mortgage Awards 2021 for four consecutive years.
Monzo
As one of the most advanced and comprehensive challenger banks we've seen—allowing a lot of flexibility over your time horizon and savings goals—Monzo is a great choice for managing and growing wealth, no matter what your goals are.
Best UK Online Banks for Investments
Revolut
Due to their low fees and favorable exchange rates, Revolut is ideal for people who travel frequently. Revolut users can transfer money worldwide, invest in crypto, stocks, and commodities, get travel insurance, and exchange money without any hidden fees.
Wise
With over 12 million customers, Wise handles about 8 billion dollars in trades per month across over 80 countries. Diversifying your money into high-performance assets may be your best defense against the instability of economies around the world today.
Expert Opinion
Having used both traditional and digital banks over the years, I've seen first-hand the benefits and trade-offs of each. When researching these top online options in the UK, a few aspects really stood out to me based on my own experiences.
As someone who often does international transfers, I witnessed how hidden fees can really add up if you're not careful. I've definitely been stung by unexpected currency exchange or wire charges before. It's so important to pay attention to the fine print around any international usage. Revolut and Wise really shone here with their highly competitive rates.
Security should also be a top priority. One may feel confident going with big names like Monzo or Starling that clearly invest in robust security systems.
Overall, being able to manage money totally mobile-free is a game-changer. But truly doing your homework on the specific services each bank provides for things like loans or savings is most important. Matching their offerings to your individual needs will ensure you get maximum value from your digital bank.
FAQs
Are digital banks safe?
Yes, online banks are safe. An online bank that is insured by the Federal Deposit Insurance Corp. will offer the same protection as a local bank that is insured by the FDIC.
How do I open a UK digital bank account?
In order to open a UK digital bank account, you need to include scanned copies of your passport and proof of address in your application. There are some online-only and mobile-only banks that allow you to open an account with only your email address, mobile phone number, and valid identification.
What are digital banks?
A digital bank operates online, offering its customers services previously available only at brick-and-mortar branches.
What are the disadvantages of digital banking?
Digital banking has some disadvantages, such as technology disruptions, a lack of personal relationships, privacy and security concerns, and limited services.
Team that worked on the article
Rinat Gismatullin is an entrepreneur and a business expert with 9 years of experience in trading. He focuses on long-term investing, but also uses intraday trading. He is a private consultant on investing in digital assets and personal finance. Rinat holds two degrees in Economy and Linguistics.
Gismatullin has been an author at Traders Union since 2019. His focus is creation of detailed reviews of brokerage companies and cryptocurrency exchanges, as well as analytical and educational articles on finance.
Rinat’s motto: Always be open to new experiments. By overcoming the hardships you will reach the stars that open to those who seek.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
The topics he covers include trading signals, cryptocurrencies, Forex brokers, stock brokers, expert advisors, binary options. He has also worked on the ratings of brokers and many other materials.
Dr. BJ Johnson’s motto: It always seems impossible until it’s done. You can do it.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.