Starling Bank and Monzo have made it easy to open a business account in the UK.

Both offer full-fledged bank accounts, have no physical bank branches and are managed through a mobile app.

So what are the differences between the business accounts? Which is best?

We compare the two business accounts in terms of features, costs and services.

Starling BankMonzo
Link
Service
Current account with Debit MastercardCurrent account with Debit Mastercard
Monthly fee for business accountFreeLite plan: £0
Pro plan: £5
EligibilityUK-registered/-based companies & sole tradersUK-registered/-based companies & sole traders
Sign-upEntirely through appEntirely through app
Account no. & sort code included?
IBAN included?
UK payments available
Bank transfers, Direct Debits, standing ordersBank transfers, Direct Debits, standing orders
International transfers
Only through TransferWise (in-app)
Euro account option
Business loans
Only through third-party lender
Business overdrafts
Team accessOnly with co-directorsYes, on Pro plan
Starling BankMonzo
Service
Current account with Debit MastercardCurrent account with Debit Mastercard
Monthly fee for business account
FreeLite plan: £0
Pro plan: £5
Eligibility
UK-registered/-based companies & sole tradersUK-registered/-based companies & sole traders
IBAN
Sign-up
Entirely through appEntirely through app
Account no. & sort code included?
IBAN included?
UK payments available
Bank transfers, Direct Debits, standing ordersBank transfers, Direct Debits, standing orders
International transfers
Only through TransferWise (in-app)
Euro account option
Business loans
Only through third-party lender
Business overdrafts
Team access
Only with co-directorsYes, on Pro plan
Starling BankMonzo

Main features of Monzo and Starling Bank

Both are popular UK-based banks for both personal and business users, but when it comes to business accounts, they are not equal. Let us look at the main characteristics of the Monzo and Starling Bank business account.

Current account managed online – A clear strength of the platforms is that they are both fully-fledged bank accounts managed online through a mobile app, or browser app with somewhat fewer features. That doesn’t mean there is no human support team behind it. The customer service team can be contacted 24/7 by telephone, chat or email in both cases.

To sign up with an account, you actually have to create a personal current account before adding a business account.

In Starling’s case, you then have a choice between setting up a ‘Business’ account for registered companies or ‘Sole trader’ account for the self-employed. You can even add a ‘Euro’ account containing EUR currency (the others are for GBP currency only). Only the Euro account has a monthly fee.

Monzo only has one ‘Business’ account for sole traders and registered companies alike, but there’s a choice between two account tiers: Business Lite (free) and Business Pro (£5 monthly) plans. They differ in the amount of features, i.e. Lite’s limited features are better suited for sole traders while Pro is better for companies with more to manage.

Payment cards – Both offer a Debit Mastercard for business account holders. This is better than most challenger banks in the UK that only have prepaid Mastercards, which are not as readily accepted as a full debit card. There is no option for a credit card from these banks.

IBAN and wire transfers – Only Starling’s business accounts come with their own IBAN for international transfers. Instead of a personal IBAN for Monzo users, you can send international transfers via the Monzo app through a TransferWise integration. In other words, only through TransferWise can you send money abroad from the Monzo account or receive money from abroad.

Loans and overdrafts – Only Starling offers loans and overdrafts for business directly. Monzo works with a third-party lender offering business loans for Monzo Business account holders. There is no overdraft facility with Monzo Business, only for Personal account holders.

Costs and fees

The following table summarises the costs of using Monzo and Starling Bank business accounts.

Starling BankMonzo
Account creationFreeFree
Monthly feeBusiness account: Free
Sole trader account: Free
Euro account: £2
Lite account: Free
Pro account: £5
Debit cardFreeFree
UK paymentsFreeFree
Transfers between same-bank accountsFreeFree
Cash withdrawalsFree in UK & abroadFree in UK
First £200/mo free abroad, then 3% of withdrawal amount
Cash deposits0.3% (min. £3) at Post Office£1 at PayPoint
Cheque depositsFree via app (2 working days’ processing)Free via Freepost (2-3 weeks’ processing)
Registration
Starling BankMonzo
Account creation
FreeFree
Monthly fee
Business account: Free
Sole trader account: Free
Euro account: £2
Lite account: Free
Pro account: £5
Debit card
FreeFree
UK payments
FreeFree
Transfers between same-bank accounts
FreeFree
Cash withdrawals
Free in UK & abroadFree in UK
First £200/mo free abroad, then 3% of withdrawal amount
Cash deposits
0.3% (min. £3) at Post Office£1 at PayPoint
Cheque deposits
Free via app (2 working days’ processing)Free via Freepost (2-3 weeks’ processing)
Registration

There is no setup fee og cost for the business debit card. Domestic payments in pounds sterling are free and so are cash withdrawals from within the UK.

It is possible to deposit cash into the business accounts, costing £1 per PayPoint deposit with Monzo and 0.3% of the deposit amount (min. £3) at the Post Office with Starling Bank. Cheques are free to deposit via the Starling app and they only take two days to clear. With Monzo, you send cheques to the company via Freepost, taking 2-3 weeks to clear.

International transfers and use abroad

Monzo is better suited for businesses with UK clients only because the account lacks the direct capacity for international transfers, except through TransferWise.

However, you can use the Monzo debit card abroad or for payments in any currency. The first £200 cash that’s withdrawn abroad every month is free, but Monzo charges 3% of the cash amount above this amount. Any card payment in a currency other than GBP uses Mastercard’s wholesale rate with nothing added on top.

Starling BankMonzo
Cash withdrawal in other currencyFreeFirst £200 during 30-day period is free, above costs 3% of withdrawal amount
Inbound international transfersEuros to GBP account: 2% on top of exchange rate
Other currencies to GBP account: free
Only through TransferWise
Outbound international transfers0.4% on top of exchange rate + £5.50 delivery fee + 30p (w/local partner)TransferWise fee
SEPA transfersFree (only with Euro account)Not possible
Card payments in foreign currencyFreeFree
Exchange rateRealMastercard
Starling BankMonzo
Cash withdrawals in other currency
FreeFirst £200 during 30-day period is free, above costs 3% of withdrawal amount
Inbound international transfers
Euros to GBP account: 2% on top of exchange rate
Other currencies to GBP account: free
Only through TransferWise
Outbound international transfers
0.4% on top of exchange rate + £5.50 delivery fee + 30p (w/local partner)TransferWise fee
SEPA transfers
Free (only with Euro account)Not possible
Card payments in foreign currency
FreeFree
Exchange rate
RealMastercard

Cash withdrawals abroad from a Starling Bank account are all free, using the real exchange rate rather than Mastercard’s. You can also send and receive international SWIFT transfers with a Starling business account.

Receiving a transfer from abroad is free, unless a payment sent in euros is going to your Starling Business or Sole trader account which is in GBP: this costs 2% on top of the real exchange rate. With a Starling Business Euro account, however, all SEPA transfers are free to send and receive. The Euro account costs £2 monthly. Sending a SWIFT payment costs 0.4% of the transfer amount on top of the real exchange rate + £5.50 delivery fee + 30p if using a local partner for the transfer method.

Image: Starling Bank

Starling Business Euro account

Starling Bank offers a Euro account to business users for £2 monthly.

Which has the best app features?

Since these are online banks, you should expect a decent range of app features to manage your business account entirely from the mobile app. Both offer desktop access too, but account features are more limited there.

The banks have the following app features in common.

Manage payments – Send money, set up Direct Debits, subscriptions and standing orders, view subscriptions, send money internationally (with Monzo, TransferWise is integrated in the app, while Starling allows SWIFT payments directly from the app).

Monitor spending – Categorise payments into colour-coded topics for e.g. office rent, utility bills and wages. Get push notifications every time money is spent so you know what’s going on with the account. Monzo also lets you set spending limits for different categories set for specific time periods, making it easier to stay on budget.

Image: Monzo

Monzo Business web vs mobile app

Monzo Business account viewed in the mobile and web app.

Put money aside for goals  – Starling calls it “spaces” and Monzo calls it “saving pots”, but they are basically the same thing: from within your account, allocate money into ring-fenced spaces to reserve it for a dedicated purpose such as HMRC taxes, a new computer, business trip etc. Money placed in these pots does not form part of the main account balance but can freely be transferred back to the main balance when needed.

Starling lets you auto-save money from the main balance to allocated spaces from rounding up transaction amounts automatically. Monzo, on the other hand, lets you schedule outgoing and ingoing transfers between pots and the main balance, or lock pot balances to a certain date to deter you from using it.

Card controls – Order, cancel, freeze and unfreeze your debit card, or block swipe and gambling payments from the app. Starling excels with more detailed controls such as prohibiting ATM withdrawals and card machine or online payments.

Invoices – Send invoices electronically from the app. This is available to all Starling business users, but requires a Pro subscription for Monzo users.

Multiple users – Co-directors can access the Starling Business account apart from the original account user. Monzo allows more than one person from the same company to use the same account on the Pro plan only. All authorised Monzo account users can access all information and perform all functions, i.e. there are no permissions settings.

Accounting integration – Export bank statements to a PDF file from the mobile or web app. All of Starling Bank’s business accounts can be integrated with external accounting programmes for a smooth bookkeeping system. In contrast, accounting integrations are only possible on the Monzo Pro plan, not the free Lite plan.

Image: Starling Bank

Starling Bank business app

The Starling Business app lets you organise payments and export statements.

The banks each have some unique business functions too.

Starling has a payment scheduling function and a way to record and submit VAT information for HMRC. Sole traders receive estimates of how much tax they should be saving alongside a report generated to help complete self-assessment.

Monzo Pro accounts can automatically deduct taxes into a special tax pot so you don’t have to sort that out manually.

What do customers say about the banks?

Monzo and Starling provide round-the-clock customer support through in-app messaging, email and over the phone.

There are, however, significant differences in the quality of service. Starling Bank has won awards for being the best British bank in 2020, which is in line with the majority of customer reviews online. Some users complain of certain support queries being lengthy or unnecessarily tedious, which seems to be the case for the application process for the Business Bounce Back Loan. Many other users praise the service and account features.

Monzo, on the other hand, has had consistent issues with account holds, where funds and transactions are held for a long time for no clear reason, causing a lot of stress and financial hardship for the account holder. BBC Watchdog has confirmed the amount of frozen account was greater than all other British banks in the past year. Furthermore, the quality of customer support is not as highly regarded as with Starling.

Image: Monzo

Monzo Business account differences

The paid Monzo Pro subscription is better for companies, while Lite can suit sole traders.

Monzo vs. Starling – which to choose?

In many ways, Starling and Monzo banks are similar, but after testing both, we consistently felt that Starling was more polished and complete than Monzo business accounts. The Starling app felt more professional and customer support very friendly, while the free Monzo business account was more basic in features and piggybacking on other platforms to provide international transfers and loans.

Starling Bank stands out with their own loans, business overdrafts, Euro account, SWIFT transfers, advanced debit card controls and access to all business features without a monthly cost. Several important Monzo features are only available on the pay-monthly Pro subscription, including accounting integration, invoicing and multi-user access.

That being said, a few of the Monzo-only features are genuinely useful for some businesses, such as the additional settings for savings pots and budgetting features. Monzo’s Personal account features are more comprehensive than the Business account, though. It seems as though the bank has prioritised personal users over business accounts, whereas Starling Bank has clearly honed their business features over a long time.