App-based banking

Top digital & app-based bank accounts
How good is your bank’s app?

Digital and app-based banks lack the physical branch networks found in traditional banking, yet they often provide a more seamless digital experience. In this guide, we’ll highlight our favorite app-based accounts, along with those highly rated by users. Be sure to also check out our Best Bank Accounts guide, which features top choices for initial bonuses, ongoing rewards, and interest on savings.

Best banking apps

Top app-based bank accounts

• Starling: Budgeting help + top overseas
• Chase: 1% cashback on purchases
• Monzo: Spending notifications + budgeting help
• Revolut: Good option for frequent travellers

Top traditional banking apps

• NatWest/Lloyds: Highly rated for features & usability

What is an app-based bank?

Engaging in digital banking typically means managing your finances through an app, handling most or all of your banking needs in one place. This guide will spotlight digital and app-based banks—also referred to as online banks, mobile banks, or challenger banks—that offer advanced technology and features designed to track your spending and help you save towards your financial goals, all within a single app and account.

While many traditional high-street banks also offer popular apps and are making strides to compete with app-only banks, we’ll highlight the best options among these as well.

Although app-based banks lack physical branches, most provide in-app customer support with dedicated teams ready to assist you with any questions or concerns.

All the apps discussed in this guide are available for free download. However, there may be associated costs, which we outline in our recommendations below. An updated smartphone running iOS or Android is also required.

What can you do on a mobile banking app?

Mobile banking apps have become so advanced that it might be more appropriate to ask, ‘What is it that you can’t accomplish with a mobile banking app?’ Virtually every service provided by conventional banks and building societies on their websites has been seamlessly integrated into these apps. This includes functionalities such as:

• View your account balance and recent transactions
• Transfer money between accounts
• Send money to friends and family
• Set up Direct Debits and regular payments
• Pay bills
• Update your personal information
• Apply for new accounts, loans and credit cards
• Save money in separate ‘savings pots’
• Check your credit score
• Immediately ‘freeze’ a card if it’s lost or stolen
• Chat with a customer adviser

Some digital banks offer superior exchange rates compared to traditional bank accounts and provide fee-free international spending and withdrawals, making them a preferable choice for travelers abroad.

Furthermore, mobile banking apps enhance the management of contactless payments. Most apps allow users to adjust or disable their contactless spending limits and streamline the process of linking cards to digital wallets like Google Pay or Apple Pay.

For business account holders, there are additional advantages such as accepting contactless payments directly through their smartphones and automating business expenses.

Although mobile banking apps have yet to widely introduce the capability to withdraw cash from ATMs by simply tapping a phone, the recent rollout of cardless ATMs by several high-street banks suggests this feature might soon become available with app-based banks as well.

How do I open an app-only bank account?

To establish a bank account that operates exclusively through an app, you typically require a smartphone (although some banks permit the use of a computer if you prefer). Frequently, the process involves a few straightforward steps to open a new account.

1. Ensure you meet the eligibility criteria before you start. Usually you need to be over 16, live in the UK, and have valid photo ID, such as a passport or driving licence.
2. Download the bank’s app by searching in the relevant app store or scanning a QR code.
3. Provide some personal details. This will include your full name, address, email address and telephone number. You may also be asked to give details of your salary, citizenship and what you plan to use the account for. Some banks might text or email a code for you to enter at this point too.
4. Verify your identity. Do this by uploading a document such as your passport or driving licence. You may also need to upload a selfie or make a short video so the bank can double-check you are who you say you are.
5. Activate your card. If you’ve applied for a current account, the bank will send you a debit card that’s linked to your new account once you’ve finished signing up. Follow the instructions that the bank gives you to get your card up and running.

Some banks offer different account types – savings-only accounts, packaged accounts and business accounts, for example – so be sure to check you’re signing up for the one that suits your needs best. For more information and to compare options, see top app-based bank accounts below and also check out our various banking guides.

The five app-based banking need-to-knows

1 – The apps really help you know where your money’s going – many rely on them to stick to a budget

While these apps are not exclusively designed for budgeting, the primary ones highlighted in this guide can be highly effective for managing your finances.

They provide instant notifications whenever you make a purchase or save money. For instance, if you spend £5 at Boots, you’ll receive an immediate alert on your phone detailing the transaction.

This functionality is also useful for detecting fraudulent activity. If you receive a notification about a charge at Nando’s while you’re at home watching TV, you can quickly freeze your card through the app to prevent further unauthorized transactions, then contact your bank to report the fraud and request a replacement card.

Additionally, these apps offer insights into your spending patterns. You can easily track how much you spend at specific stores each month (coffee enthusiasts, take note!), or monitor your expenditure in broader categories like entertainment or travel.

These features simplify budgeting and money management, helping you make adjustments as needed.

For more information on the specific budgeting tools these apps provide, check out our detailed section on their features.

2 – Like with any other bank, your money’s protected up to £85,000 in an app-based bank

When managing your finances, ensuring the safety of your money is crucial. Understanding how your funds are protected can help. In the UK, banks regulated by the Financial Services Compensation Scheme (FSCS) offer protection for up to £85,000 of your money in the rare event that a bank fails (for more details, refer to our Savings Safety guide).

Among the apps listed below—Starling, Chase, and Monzo—are fully regulated UK banks, and thus benefit from FSCS protection (although Chase’s coverage is linked with JPMorgan). This means your money enjoys the same level of security as it would in traditional large banks like Barclays, HSBC, Lloyds, or NatWest.

Revolut, on the other hand, operates under an e-money licence. This means that while your funds are held in a safeguarding account—making it impossible for Revolut to lend them out—you should be able to recover your money (less any potential admin fees) in the event of a collapse. Additionally, money saved in a Revolut ‘Savings Vault’ is held with a third-party bank and is protected by the FSCS.

3 – App-based accounts are cool and high-tech BUT often you can get better rewards elsewhere

The financial technology companies, commonly known as fintechs, provide a robust alternative to traditional high-street banks. These fintech firms offer a range of services similar to those of conventional banks, including debit cards, overdrafts, Direct Debits, and standing orders. They distinguish themselves with advanced, user-friendly technology, though it’s still beneficial to consider the traditional banks.

High-street banks sometimes provide attractive incentives, such as bonuses of £100 or more for switching accounts. They may also offer ongoing benefits like in-credit interest or cashback on bills, which is less common among challenger banks. For details on the current offers, check out our Best Bank Accounts guide.

Remember, switching banks isn’t necessary to open an app-only account; you can simply add it as a supplementary account. For instance, many people maintain their primary bank accounts for their salary and bills while using an app-based bank to manage their monthly spending, allowing for better control over their finances.

This approach can be a useful way to explore app banking without fully committing, especially if you’re curious about its advantages but not yet convinced.

4 – Want one of these accounts? You’ll still need to pass a credit check

The accounts listed below perform ‘soft searches’ on your credit report when you apply (except when applying for an overdraft, in which case a hard search is typically conducted). A soft search is less intrusive, as it is not visible to other lenders, unlike a hard search, which can be seen by other lenders and might negatively impact your credit score.

Soft searches are used for three main purposes:

• To verify your identity and ensure you are not attempting to commit fraud by using someone else’s details.
• To review your credit history and determine if you would be a desirable customer for the bank.
• To evaluate how well you manage your existing credit, which helps the bank decide whether to approve an overdraft request.

When applying for an overdraft, the soft search often becomes a hard search. This informs other lenders that you have sought credit from this specific bank.

See our Credit scores guide for more information on the different types of searches, plus information on how you can check your credit report.

5 – Digital banking is secure – but it’s still worth being careful

Banks implement robust security measures to prevent fraudsters from accessing your accounts, whether you’re using online or mobile banking. Nonetheless, exercise caution by never disclosing your online or mobile banking details to anyone.

When using any of the mobile apps highlighted in this guide, ensure you download the legitimate version from your app store and regularly update the app to take advantage of the latest security enhancements. Additionally, safeguard your phone with a password, PIN, or another form of screen lock, such as a pattern or fingerprint recognition.

It’s also a good practice to keep your computer protected with free antivirus software to guard against viruses and spyware.

What sort of budgeting tools do app-based banks offer?

Not everyone finds budgeting to be a natural skill, but fortunately, many mobile banking apps now come equipped with budgeting tools to assist you. These features enable you to monitor your expenses directly within the app, eliminating the need for separate budgeting software or manual spreadsheet updates. Below are some of the budgeting tools available through app-based banks:

• Savings pots. Think of a ‘pot’ as a digital piggybank within your account. It’s a designated spot where you can set aside a portion of your funds from your main account, keeping it distinct from your primary balance. Some banks offer features to conceal or lock these pots, helping you resist the urge to access the funds.
• Round-ups. This budgeting tool provides a convenient method for saving small amounts on a regular basis with minimal effort. It works by rounding up your card transactions to the nearest pound and then automatically depositing the extra change into your chosen savings account.
• Spending alerts. These alerts provide immediate notifications whenever you make a purchase, which can be useful for those who might impulsively spend. This feature is particularly effective if the account is shared with others, as they will also receive the notification and could help deter unnecessary expenses.
• Spending insights. This feature highlights your overall spending patterns. It allows you to track how much money you allocate to specific stores each month or to identify which spending category consumes the largest portion of your funds.
• Spending caps. After exploring the spending insights feature, you may find it beneficial to establish a spending limit to control how much you allocate to specific categories.

If your primary focus is finding a budgeting app that specializes in savings automation, explore our guide on automatic savings apps. These apps automatically transfer funds from your bank account into a virtual savings account for you.

Remember, although these budgeting tools are excellent for promoting thoughtful spending and saving habits, they shouldn’t replace a thorough review of your financial situation and the creation of a comprehensive budget. If you’re facing difficulties with debt, be sure to check out our Debt Help Guide for support.

Top app-based bank accounts

To open a current account with any of the challenger banks listed below, you simply need to use their apps. The application process is straightforward and usually only takes a few minutes if you’re approved.

Keep in mind that these accounts might not offer incentives like £150+ for switching or monthly cashback. However, if you’re interested in a cutting-edge banking experience, these are our top recommendations.

Top app-based bank accounts

Starling: Useful spending notifications, great for budgeting + top for overseas use. Starling Bank gives real-time notifications when you use your debit card, plus spending insights, and lets you set up savings goals. You earn 3.25% in-credit interest on up to £5,000 – a decent rate, but it can be beaten. Starling offers a ’round-up’ feature, which rounds all purchases up to the nearest £1 and autosaves the difference. It’s also a top-pick debit card to use abroad, as it’s fee-free for overseas spending and cash withdrawals.
Starling Bank   Service rating: 95% ‘great’	Starling: Budgeting help + top overseas Overseas fees: None In-credit interest (AER variable): 3.25% up to £5,000 How to pay in? Cash at any post office, cheques via app/post Arranged overdraft cost (EAR variable): 15%, 25% or 35% Unarranged overdraft cost: None Get the app: iOS (rated 4.9/5) or Android (rated 4.8/5) App rating: 83% ‘great’ for usability, 85% ‘great’ for features
Chase: 1% cashback for at least a year on most purchases, plus no fees to spend/withdraw cash abroad. The app-only Chase current account* gives a top rate of cashback on most spending (max £15/month), though there are some exclusions. There’s no minimum pay-in required in the first year, but you’ll have to pay in £1,500+/month after that to continue getting cashback. To use Chase, you’ll need a device with at least iOS 14.1 or Android 8.1. You can also set up its ’round-up’ feature, which rounds all purchases up to the nearest £1, with the difference autosaved into a separate account paying 5% (for example, spend £1.45 and 55p is transferred). You can create up to 20 extra accounts, and there’s also a monthly spending overview – great for helping to manage your money.
Chase*. Service rating: 95% ‘great’	Chase: 1% cashback on purchases Overseas fees: None In-credit interest (AER variable): 4.1% on £1m via its linked savings account, 1% on the main current account (no max), 5% on small amounts saved in the round-up account How to pay in? Cannot pay in cash Arranged overdraft cost (EAR variable): Not available Unarranged overdraft cost: Not available Get the app: iOS (rated 4.9/5) or Android (rated 4.1/5)
Monzo: Helps you budget & also offers savings accounts with partner banks. Monzo* has similar features to Starling – real-time spending notifications and insights into where you’re spending. It’s also good for overseas use, particularly if you won’t withdraw cash or will only get small amounts. The difference comes with savings – Monzo has its own instant-access savings ‘pot’, but also lets you set up ‘pots’ with its partner banks too, which often pay higher interest rates – though top-pick savings usually pay even more. Monzo also has a ’round-up’ feature, which rounds all purchases up to the nearest £1 and autosaves the difference in a ‘pot’ of your choice. Monzo also offers three tiers of paid accounts: Extra (£3/mth), Perks (£7/mth) and Max (£17/mth). Each tier comes with additional benefits including connecting your accounts via open banking (Extra), free Greggs coffee (Perks) and travel insurance (Max). Full details of each package can be found on Monzo’s website.
Monzo* Service rating: 88% ‘great’	Monzo: Spending notifications + budgeting help Overseas fees: None on spending, ATM withdrawals are only fee-free in the UK and in European Economic Area (EEA) countries up to £400 per 30-day period, 3% fee after (i) In-credit interest (AER variable): 4.1% via its linked instant-access savings account How to pay in? Cash at any PayPoint (£1 fee), cheques via post Arranged overdraft cost (EAR variable): 19%, 29% or 39% Unarranged overdraft cost: As above if applicable, or 39% (max £15.50/month) Get the app: iOS (rated 4.9/5) or Android (rated 4.7/5) App rating: 82% ‘great’ for usability, 86% ‘great’ for features
Revolut: Good for anyone who travels a lot. In addition to common banking app features such as real-time spending notifications and insights, the Revolut* standard plan has advantages for those who regularly spend overseas. Revolut customers can hold up to 30 currencies at a time, with no exchange fees on weekdays. Account holders can also send money in over 70 currencies to more than 160 countries.
Revolut*	Revolut: Good option for frequent travellers Overseas fees: None Monday to Friday, 1% fee on weekends and/or for Thai baht. 1% fee if exchanging £1,000+/month In-credit interest (AER variable): 2.29% How to pay in? Cash at any participating retailer Arranged overdraft cost (EAR variable): Not available Unarranged overdraft cost: Not available Get the app: iOS (rated 4.9/5) or Android (rated 4.5/5) App rating: N/A

(i) In the UK and EEA countries, ATM withdrawals are fee-free up to £400 per 30-day period, 3% fee above. Though if you use Monzo as your main account (pay in £500+ per month and have one or more Direct Debits), then it’s always fee-free in these countries. Outside of these countries, it’s only fee-free up to £200 per 30-day period, 3% fee above.

Top-rated traditional banks’ apps

You might be looking for a high-tech app from a familiar banking brand. We conducted a survey on banking apps to determine which ones stand out. Starling and Monzo emerged as the top choices for their features and user-friendliness. However, among traditional banks, the following two apps received the highest ratings.

While these apps currently don’t provide the same level of budgeting assistance as newer competitors, they are solid options if you prefer to stay with a well-known name and engage frequently in mobile banking.

NatWest / Lloyds: Highly rated for features and usability

• NatWest – 71% rated it ‘great’ for usability; 66% ‘great’ for features. The NatWest app stands out as one of the top offerings among traditional banking apps. We particularly recommend the NatWest Rewards Account, which offers users £3 in monthly cashback (it’s £5 a month but costs £2 in fees), provided they use the mobile app regularly and set up at least two Direct Debits of £2 or more each. To qualify for this account, you’ll need to deposit a minimum of £1,250 into it each month.

The app allows you to view your balance, monitor transactions, and manage payees and recurring payments. Additionally, you can request money from friends using a QR code or link and easily split bills. Download the app for iOS (rated 4.6/5) or Android (rated 4.5/5).

• Lloyds – 68% rated it ‘great’ for usability; 60% ‘great’ for features. We recommend Club Lloyds as a top choice for your banking needs, offering an interest rate of up to 1.5% on balances of up to £5,000. To avoid a £3 monthly fee, you’ll need to deposit at least £1,500 each month. Additionally, account holders can enjoy various perks such as cinema tickets, movie rentals, or magazine subscriptions.

The Lloyds app gives you instant spending notifications, lets you see transactions on a map and helps you manage monthly subscriptions. Download it for iOS (rated 4.8/5) or Android (rated 4.6/5).

What can other traditional banks’ apps do?

Furthermore, we were interested in exploring the range of services provided by other banks, including budgeting assistance, card freezing options, and various app functionalities. The following table outlines their offerings.