Which app-based digital bank is best?

For those keen to improve the way they bank there are three clear leaders – Monzo, Starling and Chase – each innovating how we bank, spend and save. But which one is best?

I’ve taken a look at the key features of the three banks to help you make a choice. You’ll find my analysis across key categories, a ranking for each bank in those sections and a table for you to see the full comparisons.

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Watch my video analysis, or keep reading

Digital banks vs the rest

When it comes down to which current account is best there are so many factors to take into consideration. From monthly rewards through to switching deals, and overdraft costs through to access to a branch, these and more can all be the deciding factor when picking your bank.

But since you don’t need to settle for a single account, you can have all the different perks you want. Really, for day-to-day banking, the priority is which bank is the easiest to use. And for most of us, that means which bank has the best app.

I’ve written before about how the apps compare at the leading banks, and many are getting better, but the standout ones are the digital-first banks. The ones designed to be managed from your phone. The ones pushing the boundaries of our relationship with our current account.

Choosing which banks to compare

As much as I’d love to compare all the digital banks, an article and video like this easily takes a couple of days to research and produce, so I’ve got be selective!

Monzo and Starling have the biggest profile and the most customers, and in my view lead the field. So they’re obvious ones to look at here.

Competitors such as Revolut or Monese have some features not available elsewhere, such as disposable virtual debit cards. But I don’t think they stand up to Monzo and Starling – plus they aren’t fully licensed UK banks. So they’re out.

And relative newbie Chase has followed their lead but added on attractive extras such as cashback and high interest on savings, so that’s an important one to add.

Account options

This article is focusing on the free accounts, but it’s worth knowing what other options are available in case you want to bring everything under one app.

Personally I’d avoid the premium personal accounts, which are only offered by Monzo. Most also won’t have use for the Euro account from Starling. However the business accounts are both free and good options.

Opening accounts

You’ll open all three of the accounts on your mobile phone, and this means you’ll need to upload your ID and often record a video message that can later be used for verification if needed.

However, older phones might not work with the bank. This is especially the case with Chase UK which requires far more recent operating systems.

There aren’t really any big incentives for signing up, and no switching bonuses, though Monzo and Starling offer refer-a-friend schemes.

*Update 11/5/22 – Chase now offers £20 for signing up (more here).

1. Monzo

If you can get a referral link from an existing customer (my code was stopped for referring too many people!) you can get a fiver for signing up. It also requires, currently, the lowest spec OS to work.

2. Starling

The only difference really is you can’t get a welcome bonus.

3. Chase

The minimum OS requirement has been a huge source of anger from readers with older phones unable to open an account.

Card controls & features

One of the big bonuses these banks have over the others are the extra features packed onto your debit card (though other banks are copying and adding some of these).

All three allow you to view and copy your card number, freeze your card and use your digital wallet to pay, but there are differences worth noting. Here’s my ranking:

1. Starling card

Starling has the most features and control meaning you can do most things. You can use the digital card straight away, handy if you lose your physical one and have to order a replacement.

There are lots of control options, not just gambling and contactless which the other banks offer. You can temporarily turn off online transactions, mobile payments, use abroad and more.

It also has the most functionality, working with Samsung, Fitbit and Garmin Pay as well as Apple and Google. You can also order an extra “connected” card, allowing you to give someone else the ability to spend up to £200 from your account.

2. Chase card

Chase is doing things differently when it comes to the card as it’s numberless. No long card number, no expiry date, no CVC. This is good and bad.

It’s great for security, and if your details are compromised you can just generate a new one instantly online. However you do have to open the app each time you need to enter the details online. Fortunately, this still works if you have no signal or wifi.

3. Monzo card

What puts Monzo in last place here is that it doesn’t let you see the three digits on the back (CVC) necessary to make most online or phone payments. You also can’t see your PIN with Monzo if you don’t have your card on you (or remember your CVC) or a form of photo ID. These are big negatives for Monzo.

You can freeze and unfreeze the card easily and quickly, but you don’t have further choices to limit specific card uses other than gambling and contactless.

Spending

These banks are all great options for spending. You’ll get instant notifications of transactions and can spend for free abroad.

You’ll also be able to pay Direct Debits and standing orders from separate ring-fenced sub-accounts, handy for budgeting. However you can’t do this for subscriptions that use the long card number to pay with Starling or the free Monzo, and (though technically possible) it’s not practical to do this with Chase either.

But there are differences worth considering. Here’s my ranking:

1. Chase

The 1% cashback for 12 months makes the Chase card my top spending card off all banks, and it’s only beaten if you are eligible for a welcome bonus from American Express.

You can also use the card to pay from your sub-accounts – though you have to do this before payment (I’d love a go-back-in-time feature as you have with Curve).

2. Monzo

There’s not really much difference between Starling and Monzo, but there is a cool shared tab feature for multiple people with Monzo accounts. Here you can put shared expenses and deposits into a single area and divvy up who pays for what. Realistically I think that’s only going to be used by housemates.

3. Starling

Though you don’t get cashback on all purchases you can connect to Flux and Tail, two sites which offer occasional cashback details with specific retailers.

Transfers

Since the banks have been designed to operate via an app you can easily set up new payees and send them money. This is another big advantage over traditional banks, some of which still require you to go online or use a card reader.

The differences come down to the limits:

1. Starling

An obvious winner here as you can transfer a huge amount more money, up to £250,000 – if you need to.

2. Chase

Chase comes in second thanks to the second-highest transfer limits.

3. Monzo

Much lower transfer limits, just £10,000. It does have an early payday feature, where if you receive your salary via BACs (most people do) you can get it advanced to your account 4pm the day before it’s due. However, I think this is just a gimick. If you’re always short of cash at the end of a month this won’t fix the problem, just bring it forward a day.

Budgeting & tracking

Monzo and Starling really shook things up when they launched with the ability to see where your money was going by category. However, all three are all quite limited compared to the dedicated budgeting and money management apps (here’s my guide to the best ones).

Surprisingly none of the apps let you filter by money in and money out, something you can do with the likes of First Direct and Santander (though their apps miss out massively on other features).

1. Monzo

The best of the bunch as you can set a budget for the main account. This can be across all the categories, so you can see how you’re doing at a glance on each one and adjust it accordingly. You also have the most options for exporting statements.

2. Chase

Chase nabs second place as you can also set budgets, but only on each separate account you set up. So it’s handy but there isn’t a single screen to see.

3. Starling

Last place for Starling simply because there is no budget feature. Also, the search of transactions is only on the home page (swipe up to see it) and not on the separate spending tab.

Savings

The separate accounts mentioned a few times above are all great features in keeping your money separate. You can have one or multiple, meaning you can break things down for specific savings goals if you want.

All three offer Round-up to automate a little extra into savings (more on how these work), though third-party apps can do this too.

This is a much harder category to pick the best account here as there are two key factors: How easy it is to save and how much interest you get when you save.

1. Chase

I’ve going for Chase as the winner as it offers a market-leading rate of 1.5% on the easy access account. You do need to open up specific savings accounts to get the rate (up to 10). Money in the main account won’t earn anything. You’ll also earn 5% on any round-ups you save.

2. Monzo

Next I’m going for Monzo thanks to a few extras neither Chase nor Starling have. The best of these is connectivity with If This Then That (IFTT). This allows you to set triggers for loads of saving events. For example, it could be triggered by the day (useful for savings challenges) or when you enter a specific shop. Here’s my video on how it works.

The other one is Salary Sorter, which can split any payment over £100 (so not just your salary) among the different pots.

There is interest available in a specific savings pot but it pays just 0.65% so it’s better to save elsewhere.

3. Starling

You can save into separate Spaces, and set up regular transfers in and out of these back to the main account.

Cash and cheques

If you’re like me you probably don’t use cash or cheques much, if at all. However when you do need to there are some restrictions you need to know about.

1. Starling

You can take out as much cash as you want (within daily limits) from an ATM at home and abroad with no charge. A clear winner compared to the others.

You can pay money into (and withdraw from) your account at any Post Office, which should make up for the lack of branches. However this is only free for the first £1,000 a year. The way around this is to have an extra account at a traditional bank where there is no limit and just transfer the money digitally.

There’s also the functionality to upload a photo of a cheque to deposit into your account (a few other banks do this too).

2. Monzo

There are limits on cash withdrawals with Monzo at home and abroad, through you can get rid of these in the UK and EEA (European Economic Area) if you have a Direct Debit set up or add money to your account every 35 days.

To pay in cash there’s a smaller network of PayPoint locations, and you’ll pay £1 each time you do this. So again, you’re better off doing this at a different bank.

3. Chase

Chase won’t let you pay in cash or cheques at all, and there’s a £700 limit on ATM withdrawals overseas.

Borrowing

I wouldn’t automatically go to these banks if you need an overdraft, but they might be slightly better than other options if you’re not eligible for an interest-free one from Nationwide or First Direct.

1. Starling

Depending on your credit report and other factors, overdrafts at Starling are either 15%, 25% or 35% – all better than the 40% you’ll pay elsewhere. Even so, unless you get the 15% rate there will be cheaper ways to borrow.

2. Monzo

Monzo is going big on Flex, its new Buy Now, Pay Later offering. I’m not a fan of BNPL if you’re using it to buy things you can’t afford! And if you can afford it, a credit card comes with greater consumer protection.

3. Chase

There are no borrowing options.

Ease of use and support

All the apps allow biometrics (face or thumb) to log in, and all let you change your personal details (something many other banks won’t do on the app). They all also have in-app “live” chat (you might wait a while for a response) and phone support too.

In terms of which is the easiest to use, I think the app you like best will come down to your own individual choice. As with any new app it can take time to get familiar with how it works. However the hours spent researching this article did flag up which ones were better than others (in my opinion).

1. Chase

I’m putting Chase at the top simply because I could quickly and easily find everything I needed. Of course, that’s partly because Chase doesn’t do as much!

2. Starling

Perhaps it’s because I use Starling most days, but it certainly has the edge over Monzo. If you’d asked me a year ago I’d have said it had become confusing to use, but now it’s only a few clicks to find everything you need.

That plus the ability to use a desktop browser if you prefer. It also had the most comprehensive and easy to search help section on the website.

However, it doesn’t look as slick as Chase or Monzo, and it feels perhaps like there’s too much going on.

3. Monzo

I think Monzo’s third place here is perhaps a result of the bank pushing more features to the paid accounts. It feels too basic, yet also overly complicated. I struggled to find anything beyond the basics.

Company & Security

Of course, choosing a bank shouldn’t just be about snazzy features. We need to think about how safe our money is.

Fortunately, all three are protected by the Financial Services Compensation Scheme (FSCS) – unlike Revolut and Monese. So if they were to go bust your money would be protected up to £85,000 by the government.

And how likely is that? Well, Starling is in profit so it’ll be OK, while Chase is part of US giants JPMorgan Chase. However, Monzo has well-documented issues of large losses.

There has also been plenty in the press about accounts being frozen, particularly digital banks with Monzo, Revolut and Monese receiving the most complaints. However, this can happen at all banks as part of anti-fraud checks, including Starling and Chase.

It could be that these banks, with a technology-focused approach, are just better at detecting fraud, or that scammers are using them over the big banks. In reality it’s perhaps a mix of these, along with errors. It’s certainly a worry, but that’s one reason why I always encourage people to have more than one account with their savings held separately.

1. Starling

Starling feels like a bank with a clear direction and purpose. Of course as it gets bigger that could change.

2. Monzo

Despite the bad reputation for freezing accounts, most Monzo customers will be fine. There was some app downtime just before Christmas 2021 and in spring the same year, but it didn’t last long.

However, the inability to make a profit is cause for concern (of course you’d get your money back if it did go under, but it would be inconvenient).

3. Chase

I’m putting Chase last here simply because its parent bank JPMorgan Chase is one of the world’s largest investors in fossil fuels. This means if you put your savings in there you can expect your cash to be used for things like that (Ethical Consumer scored it 3 out of 20).

Which is best?