Best Online Banks in the UK

Which Are The Best Online Banks in the UK?
Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui
Are You Considering an Online Bank in the UK? Learn Which Online Bank Is Best, the Products Offered & If It’s Safe. Here’s the Truth.

The banking industry has traditionally been dominated by large, well-established institutions, but these top online banks in the UK are shaking things up.

Times have changed, and if you’re sick of red tape, you could be in luck.

As experts in our field, we discuss the following in this article:

    Our journalists at EveryInvestor have studied the latest developments in the UK banking market so that we can bring you all the latest information on the best digital banks out there.

    Read on to learn more!

    What’s an Online Bank or Mobile Bank?

    An online or mobile bank is a digital bank. It mainly operates via an app, since physical branches or on-the-ground presence.

    Online banks in the UK have disrupted the market and are quickly growing and attracting new customers; they’ve expanded to almost 3.6 billion users worldwide at this stage.

    You can do any form of banking via a digitised app-based platform when you bank with an online bank.

    Industry growth is likely attributed to ease-of-access.

    Top 5 Digital Banks in the UK

    Let’s take you through the top 5 digital1 banks in the UK. 

    Starling Bank: Best Overall Online Bank & Best for Overdrafts & Loans

    Starling Bank was voted as the Best British Bank and won the Best Current Account Award in 2021.

    Currently, it has over 2 million customers and offers a wide variety of services, which include the following:

    • Personal, joint and business accounts.
    • Money spent abroad is free of fees.
    • Overdraft facilities.
    • Loan Facilities

    Monzo: Best for Budgeting / Business Banking

    Monzo is a prominent digital bank in the UK; it was voted the UK’s most recommended brand in 2019.

    It has a customer base of over 5.5 million people and has a registered banking licence.

    Monzo offers the following services:

    • Personal, joint and business accounts.
    • Savings-pots and other money-saving and budgeting features.
    • Real-time spending notifications.
    • Free spending when you travel overseas.
    • Personal loan options.
    • Direct debit options.
    • Overdraft facilities
    • Salary advance options.

    Revolut: Best for Holidays & International Payments

    Revolut is a privately funded digital bank and is growing in popularity, with an additional 15.5 million users signing up in the first quarter of 2021 alone.

    This makes it the most extensive online bank in the UK.

    It offers a free multi-currency account that allows you to have 30 different currencies.

    With Revolut, you can buy and exchange cryptocurrencies2.

    The following services are offered by Revolut:

    • Personal, joint and business accounts.
    • Trade-in cryptocurrencies, commodities and stocks.
    • Real-time spending notifications.
    • Splitting and settling bills.
    • Fee-free spending when you travel overseas.
    • Transfer and hold money in 30 currencies without any hidden fees.
    • A free debit card which you can freeze and unfreeze in your app.

    Atom Bank: Best for Loans, Mortgages & Savings

    Atom Bank is one of the first UK-based digital banks that has been issued a full UK-based banking licence.

    Its speciality lies in savings accounts and mortgages, and it was named the Best Online Lender at the What Mortgage Awards for 4 successive years.

    Here are the services Atom Bank Offers:

    • Savings account interest rates of 0.15% – 1.4% AER3.
    • Fixed-rate savings accounts.
    • Instant savers.
    • Mortgages.
    • The best biometric security.

    Monese: Best for Non-UK Residents & Overseas Students

    Monese is one of the best banks for students because you don’t have to have proof of address or credit history.

    For immigrants and students, you’ll be able to open a current account immediately.

    It also offers its classic account for free for the first 12 months, with a monthly fee thereafter.

    The following services are offered by Monese:

    • Current accounts are provided in GBP and EUR at no additional cost.
    • You can make cash deposits via a PayPoint or at the Post Office.
    • You get free overseas spending.
    • Transfer money in 30 different currencies overseas at very competitive rates.
    • It has a travel partnership with Paypal and Avios.
    • It offers real-time spending notifications.

    App-Only Banks vs Traditional High Street Banks

    App-only banks are starting to be a key feature of the UK banking industry; however, the sector is still dominated by the top 4 high street banks.

    With new and innovative ways of providing financial services to its clients, app-only banks are beginning to be recognised in the industry.

    Advantages & Disadvantages of App-Only / Mobile Banks

    The advantages and disadvantages of app-only / mobile banks include that support is available 24/7 support; however, there are no branches to visit in person.

    Let’s have a look at the advantages and disadvantages of app-only banks in more detail here.

    Pros of an App-Only Bank

    The pros of app-only banking are that bill splitting is allowed, and spending reports are available.

    Here’s more detail:

    • Bill splitting is allowed.
    • Spending reports are available.
    • There are no withdrawal fees payable when overseas.
    • You can lock and unlock your cards in real-time on the app.
    • Support is offered 24/7.
    • Digital security and verification are excellent.
    • There are limits available to prevent problematic online spending.
    • Traditions and old systems do not bog down online banks.

    Cons of an App-Only Bank

    The cons of an app-only bank include that only a few offer overdrafts and cash/cheque deposits are difficult.

    Here’s more information:

    • Only a handful of online banks offer loans and overdrafts.
    • You need a smartphone or a tablet to use them, and you need to be tech-savvy.
    • If you don’t have an internet connection, you can’t bank.
    • Cash and cheque deposits are hard.

    Common Questions

    Should I Switch to an App-Only Bank?

    Are Online Banks Safe?

    What Do I Need to Open a UK Digital Bank Account?

    In Conclusion

    Online banks are the future of banking, but if you should use one right now is entirely up to you.

    The processes used by app-only banks are streamlined and efficient.

    What’s more, services offered by online banks are often cheaper than traditional banks, and the features are innovative and forward-thinking.

    Most importantly, you don’t need to leave the house!

    Your financial advisor can help you pick the best online bank in the UK for your needs.

    Editorial Note: This content has been independently collected by the EveryInvestor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.