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Revolut and Monzo are digital financial services providers, both set up within the last 10 years. Neither has branches or a high street presence, so they’re likely to appeal only to customers who are happy to make all their financial transactions online or via an app. Here we look at the services each provider offers and how they compare.
Revolut vs Monzo: at a glance
Revolut and Monzo are app-based providers, who are both offering innovative ways for consumers to conduct day to day financial transactions.
Revolut offers personal and business accounts, with a debit card for spending, which is fee-free overseas. Revolut accounts can be linked to Apple Pay and Google Pay.
It has a range of accounts on offer, including one free account and four premium accounts which charge a monthly fee. It offers money transfer in more than 80 currencies and to 160 different countries. Money can be sent directly to another Revolut account for free, via bank account or card transfers.
One of the key differences between Revolut and Monzo, is the way your money is protected. Monzo is authorised and regulated as a bank by the Financial Conduct Authority (FCA), giving its customers protection on their deposits up to £85,000 per person under the Financial Services Compensation Scheme. Monzo accounts can also offer all the day-to-day banking services of a current account, including – eligibility permitting – an overdraft.
As of 25 July, 2024, Revolut was granted a UK banking licence. It is currently in a ‘mobilisation’ period, which is a standard process completed by other digital banks including Monzo and Starling.
During the process, which could take up to 12 months, Revolut can only hold up to £50,000 of customer deposits in total. This means that for the time being it is still operating as an e-money institution and customers’ money is not automatically protected by the Financial Services Compensation Scheme.
Instead, Revolut uses a safeguarding process that ringfences customer money away from its business transactions.
Monzo offers personal and business current accounts with cards that offer fee-free spending overseas.
For personal banking customers there is one free bank account, or the choice of three accounts with a monthly fee. The benefits available with the different bank accounts depend on whether you use Monzo as your primary current account, or if it is a secondary account. Monzo accounts can be linked to Apple Pay and Google Pay.
Customers with cash held in the free and Extra bank account earn interest of 4.1% (variable). The interest rate is 4.6% on the Perks and Max accounts. Monzo also offers a small range of fixed rate savings and investment options.
Monzo has partnered with the specialist money transfer provider Wise to enable its bank customers to make efficient and lower-cost overseas transfers. Wise offers transfers in 40 different currencies and to 160 countries.
How do Revolut and Monzo’s account services compare?
Monzo offers four account options: Monzo current account (no monthly fee), Monzo Extra (£3 per month fee), Monzo Perks (£7 monthly fee) or Monzo Max (£17 monthly fee).
Customers can manage their day-to-day banking, see a breakdown of their spending and use budgeting tools in the app.
Monzo offers overdrafts up to £2,000 for all eligible banking customers. The interest rate charged depends on the customer’s credit history and score, but, if successful, applicants will be offered a rate of 19%, 29% or 39%.
Monzo doesn’t charge foreign transaction fees on debit card spending abroad. Limits and charges on cash machine withdrawals (in the UK and overseas) depend on how you use your Monzo account. In the UK and European Economic Area (EEA), ATM withdrawals are unlimited for all customers who use Monzo as their main account.
In practice, this means paying in at least £500 per month, receiving your monthly state benefit into the account, having at least one active direct debit, or having received a student loan payment into the account within the last eight months.
Outside of the UK and EEA, free Monzo account holders and Extra customers can withdraw £200 every 30 days fee-free, rising to £600 for Extra and Max account holders. Any withdrawals beyond these limits incur a fee worth 3% of the transaction’s value.
In July 2024, Monzo announced the launch of its Monzo Pension consolidation tool which enables customers to combine existing workplace pension pots into a single retirement fund. They can then monitor its performance through the Monzo app.
Users will just need to share details of where they worked and when, and Monzo will track down the respective workplace pension pots and invest them into a retirement fund managed by BlackRock. The choice of fund will be determined by the number of years the customer is away from retirement.
Any number of pension pots can be combined.
Monzo Pension charges an annual fee of 0.63% of the amount invested. This comprises a 0.45% fund management fee from BlackRock, and a 0.18% platform fee from Monzo. However, Monzo Max and Extra customers pay a reduced fund management fee of 0.35%, and there are no drawdown or exit fees.
Monzo Pension is yet to officially launch, but customers can register their interest from 24 July 2024.
Revolut has five levels of account. Its free account offers a free debit card with fee-free spending overseas (there is no overdraft facility available on any account). But as Revolut is not a bank, its accounts are typically used by customers who want to make use of the money transfer services at advantageous rates.
Customers can make up to five cash withdrawals, or withdraw up to £200 per rolling month (whichever is reached first) with no withdrawal fees. The fee is 2% thereafter. Customers can make money transfers in 29 currencies from their account.
Revolut’s fee-charging accounts include Plus (£3.99 a month), Premium (£7.99), Metal (£14.99) and Ultra (£45 a month). Each account offers extra added perks and benefits which increase the more you’re paying for the account.
The added benefits include airport lounge access, shopping discounts, baggage insurance and investment benefits, such as commission-free share trading, among other things.
How do the money transfer services of Revolut and Monzo compare?
Both Monzo (using its partner Wise service) and Revolut offer a broad range of currencies for money transfer to countries across the globe.
Exchange rate
Monzo customers will get the exact mid-market rate on currency exchange transactions, as provided by Wise. This means they’ll get a highly competitive exchange rate. But note, Wise makes its money back through its fees (more on fees below).
Revolut, too, uses its own exchange rate that’s separate from the interbank rate.
Transfer fees
The fee charged by Wise for a transfer will vary depending on the specific currency transaction (amount and currency, plus method of the transfer), but charges range from 0.15% to 2%. There is also a Monzo partner fee applied by Wise at 0.3%.
Currency exchange is fee-free for Revolut customers on weekdays up to a maximum limit of £1,000 per month. There is a 1% charge for exchanges made at weekends or on public holidays.
Bank transfers within the Single Euro Payments Area (SEPA) are free but a variable fee applies on transfers outside the SEPA. There are fees for card transfers, which vary depending on the size of the transaction but could be up to £5, for example. Transfers are free and instant to other Revolut customers.
Speed of transfer
WIth Wise’s service the speed of your transfer will depend on how you make the payment, whether it is a bank or credit card transfer, for example. Transfers by debit and credit card are the fastest. The currency and destination country will also have a bearing on how quickly the money will arrive.
Wise has three transfer speed options at different prices:
- Advanced transfer – funds arrive within one to three working days
- Low cost transfer – funds arrive within three to 24 hours
- Fast and easy transfer – funds arrive within 3 to 5 hours
For Revolut users the standard time for international currency transfers is one to two working days, depending on the type of the transaction (bank transfer or card transaction, for example) and also the receiving bank. Some transfers can take up to five days, for example.
Faster transfer times are available to Revolut customers who hold ‘premium’ or monthly-fee accounts, such as the Premium or Ultra account. However, it’s worth noting that transfer times vary depending on the currency you’re using, and the destination country.
For a more detailed comparison of Revolut and Wise’s money transfer services see our review comparing the two services.
Revolut vs Monzo: Summary of services and pricing
What do the reviewers think?
Both Monzo and Revolut score highly on Trustpilot for customer experience with the same 4.1 out of 5 rating (July 2024).
Consumers praise the Revolut app for being simple to use and having very low costs for money transfers and exchange.
For Monzo, customers said the app is flexible and reliable and that customer support is excellent. They also highlighted the benefits of the app’s budgeting features.
Monzo’s banking services get a solid 69% overall score (July 2024) for customer experience in the latest ratings on Fairer Finance’s website. But as Revolut is not a bank it doesn’t appear in this ranking.
Who does Revolut’s service suit?
Revolut is well worth considering for frequent travellers or those who spend time overseas. It suits those who need an account for travel and foreign exchange services at preferential rates, but who don’t need to use it as a day-to-day bank account.
But while fee-free debit card spending has no limits overseas, there is a £1,000 limit on cash withdrawals on Revolut’s standard account, which could be a bit limited for some customers.
Consumers who want extra perks, such as travel discounts, cashback on holiday bookings and discounted airport lounge access, will also like Revolut. Although it tends to be the fee-paying accounts, such as Metal and Ultra, which offer the best add-on benefits.
Who does Monzo’s service suit?
Monzo offers a full banking service, which could suit consumers who want a fresh take on banking from a challenger provider, including sophisticated budgeting tools and an overdraft for eligible customers.
The Monzo standard account can work well if it is used as your main current account (there are certain stipulations, such as crediting the account with at least £500 a month or using it for at least one direct debit).
If it’s your main current account you get access to fee-free debit card spending in the European Economic Area with no limits, for example. The fee-free ATM withdrawal limit is £200 elsewhere in the world, whether it is your main bank account or not.
Monzo uses Wise for money transfer. Wise is well respected and known for being one of the best value money transfer providers, with competitive exchange rates and low fees.
Should I choose Revolut or Monzo?
Which account is right for you will depend on how you want to use it and whether or not you’re looking for full banking services or just competitive currency rates and money transfer.
Take time to compare the different services on offer to work out which will suit your needs best. The fees and charges for money transfer and currency exchange will vary depending on the currency you want to exchange and how you’ll be sending the money, for example.
While one provider may work out best for one type of transaction, this may not be the case for a different size of money transfer in another currency.
Bear in mind also, that while Monzo offers customers full FSCS protection (up to £85,000) for their cash, Revolut is not currently part of this protection scheme.
