Challenger bank Monzo are well loved for their sleek app design and great customer service – but this year has been a struggle for them. With losses of £113.8m for the year, their long-term outlook is not great, and they are looking for ways to squeeze more profit from their business.
Enter the new Monzo Plus bank account. This is a new premium account that offers customers a range of new features in exchange for a £5 monthly fee. Whether it’s worth it or not really comes down to personal preference and need: many of the premium features are actually available for free from other banks, however it does boast some great tech that could be a dealbreaker if you’re prioritising convenience.
Interest rates
You’ll get 1% AER interest on balances up to £2,000. That’s not a terrible interest rate, but it’s far from the best – and there are free accounts out there that can beat it. Virgin Money’s current account pays 2.02% interest on the first £1,000, and there are several easy access savings accounts offering interest at rates of around 1.4%.
On the other hand, if you like the other benefits and are planning on maintaining a high balance then you’ll at least be reducing the overall cost of the account.
Fee-free withdrawal limits increased
A standard Monzo account lets you withdraw up to £200 overseas without a fee; with Monzo Plus this is doubled to £400. A good perk for those who are often abroad, but beaten by Starling’s fee-free account as that boasts unlimited fee-free withdrawals.
New app features
The new app features are where Monzo Plus starts to stand out. Here are the headlines:
- Better budgeting tools, with custom categories. This will help Monzo’s app rival some of the more advanced budgeting app, making a real difference to users who rely on the bank’s tools to help them manage their money.
- Credit score updates. Yes, you can get these for free from a range of organisations, but the thought that your score could be fed straight into your banking app is a pretty exciting one. This will really help Monzo Plus users to understand their finances without the inconvenience of logging into yet another site every time you want to check your progress.
- Open banking features. Less exciting but still worth a mention, open banking refers to the way in which different banks will now ‘talk’ to each other, making it easier for you to manage your finances from one place. With Monzo Plus you can view the balance of accounts held with other banks – pretty standard, and available for free elsewhere – and also move money between those accounts, which is a more unusual and helpful step forwards.
Virtual debit cards
Up to five of them. Each card has its own unique details, and you can use your virtual cards to pay for goods and sign up for services as though it were a regular card. This can be helpful when it comes to managing your money and is only available from a handful of other banks (with associated fees).
The final verdict
For most people, Monzo Plus probably isn’t worth it, but it’s far from being a rip-off. If you’re particularly interested in the new app features, and you can maintain a high enough balance to recoup some of the costs then it could be a good buy.