Everything You Need To Know About Monzo

Everything You Need To Know About Monzo

One of the UK’s most prominent ‘challenger banks’, Monzo is a digital, mobile-only bank that launched in 2015. Now 1.1m-users strong and counting, its recognisable coral coloured card is changing the way we spend and save. A Monzo convert since 2016, here are 11 things our Lifestyle Editor loves about the paperless bank.

1. It’s easy to set up

In April 2017, Monzo changed from being a pre-paid mobile-only account with a top-up debit card to a fully-fledged current account complete with overdrafts, standing orders, direct debit and joint accounts. If you’re a UK citizen and over the age of 16, you can set up an account – either as a standalone current account or alongside the one you hold with your existing bank – by downloading the Monzo app on iOS or Android. From here, you’re walked through a series of instructions – including video verification – which takes just minutes. If you’re approved, your card could be with you the next day. This might be the only letter you receive from Monzo – a further pro to being a digital bank is that it’s almost entirely paperless. In the meantime, you can utilise Apple Pay to use the app and all its tools while you wait for your card to arrive.

2. You’ll finally get to grips with budgeting

Once I’d received my bright coral debit card, I was able to top up my card by transferring money over from my long-term current account with my existing bank. Come pay day, I transfer £400 across to my Monzo account. By setting up a target of £100 a week in the app, I use the money on this debit card to pay for things that aren’t rent, bills or travel expenses – everything from dinner with the girls through to clothing, food shops and trips to the pub. By setting up these targets, I make sure that I never spend more than £100 a week (therefore screwing myself over by week three). By having this amount set aside for ‘fun’ things, rather than storing it in my usual current account where it gets merged with forthcoming direct debits, I find it much easier to budget and not spend more than is in my overall account.

3. You’ll know exactly how much is in your account

One of Monzo’s handiest tools is the fact that you get an instant up-to-date balance – there’s no more waiting around until Tuesday morning to discover just how much you managed to spend on Saturday night. Every time you make a purchase, the money will be automatically deducted from your account: you’ll receive a payment notification before your receipt has even printed. In short, there’s no excuse to bury your head in the sand by remaining ignorant on exactly how much you do (or don’t) have in your account.

Within the app, you’ll be shown how much you’ve spent today, broken down to detail where you’ve spent your money. Move across to the ‘summary’ section of the app, and you’ll see how much of your monthly budget is left, how many days are still to go, and how much you’re spending in each category (more on that later).

As well as monthly statements via email and the instant balance you see whenever you open the app, you’ll also get a friendly reminder when you’re spending your budget quicker than usual – a common occurrence when you find yourself down the pub on a Friday night.

4. …And exactly what you’re spending it on

One of the app’s most eye-opening assets is that once you’ve made a purchase, the app will automatically assign it to a category – be it ‘groceries’, ‘entertainment’, ‘eating out’, ‘holidays’, ‘shopping’ or ‘bills’. Head to the summary section of the app and you’ll be able to see exactly how much you’re spending in these areas; mine usually shows that I spend most of my hard-earned cash on groceries, eating out, then entertainment (read: food, food and beer). If you wish, you can assign further targets for each of these categories to make sure you don’t spend too much on, say, clothes or takeaway coffees. A friend of mine didn’t realise just how much money she was spending at Boots until Monzo showed her she was dropping around £20 per week on anything from make-up to crisps and tights, just because she was bored while waiting for her train. When it’s all laid out for you in the app, patterns emerge – and once you’ve spotted them, they’re easier to navigate.

5. You can pay people instantly

Long before PayPal’s new bill-splitting feature came into play, Monzo allowed its users to pay friends and acquaintances instantly. You can either pay by bank transfer, pay anyone on your phone who also has a Monzo account (they’ll come up automatically once you click ‘pay’), or via the ‘nearby friends’ feature. You can also make transactions via Bluetooth without needing to know your friend’s bank details. New for autumn is a bill-splitting tool that does the maths for you – and not everyone has to be on Monzo to use it. Infinitely handy when it comes to paying for dinner.

6. Lost your card? Freeze it

Accident prone? Had a big night out? If you’ve ever gone through the rigmarole of cancelling your card and waiting around for a new one only to discover the missing item hours later, then you’ll be pleased to know that you can freeze your card via the app while you wait for your new one (it’s always next-day delivery). But best of all, you can then ‘defrost’ it again if you manage to find it before the new one arrives. And relax.

7. Create a virtual piggy bank

One of my favourite newer features is Monzo’s ‘pots’ feature. A simple way of setting money aside from your main Monzo account, you can set up multiple pots for different savings goals, whether it’s making regular deposits into a holiday fund, or one whereby each transaction is rounded up to the nearest pound, then transferred into a ‘piggy bank’. Those small amounts soon add up, and best of all you won’t even notice the money coming out of your account. And as of November 2018, members will now get 1% interest on ‘savings pots’ (those with more than £1,000 deposited into it) yearly, paid monthly into their pots.

8. Travel with ease

There are three reasons why Monzo is superlative when it comes to holidays abroad. First, it works around the world and you don’t need to inform the bank that you’re going away. Second, you’re able to withdraw up to £200 every 30 days free of charge (at and 3% thereafter). And lastly, the bank doesn’t add any fees or charges for spending with your card, and the team doesn’t mark up the exchange rate: much cheaper than exchanging cash at home or using your credit card abroad. You can also send money internationally from your Monzo app for up to eight times cheaper than with high street banks.

9. Freelance? Read this…

If you use your Monzo card for work expenses or are self-employed, then you might like to know that you can create receipts, file purchases away as expenses and export statements all from the app. Very handy when your self-assessment tax return is due…

10. It’s safe

It might be digital-only and bank-branch free, but there’s every safety mechanism in place to ensure your money’s safe. Monzo is part of the Financial Services Compensation Scheme (FSCS), so your money is protected up to £85,000 by the British government. Monzo might be a bank within an app, but every customer gets access to 24/7 customer support – just send a message on the chat function and you’ll get a reply ASAP. If you’re not a fan of ‘chats’, you can also email or call.

11. It’s a community

There are currently 28,000 active community members who contribute to blog posts, test-run new features within the app, plus attend regular events which span everything from how to build a brand from scratch to socials across the country (this month’s is held in Bristol). Across the forum, you’ll find all sorts of app tricks and budgeting tips from fellow users – and you’ll be kept abreast of all forthcoming developments. Next up? Bringing ‘pots’ to joint accounts and working on a way to let users add cash to their accounts. The Guardian has described Monzo as “the future of banking”. From our two years of experience so far, we’re inclined to agree.

Visit Monzo.Com

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