Challenger banks have shaken up the UK financial industry with modern apps, low fees, and user-first design. As of 2025, three names stand out: Monzo, Starling, and Revolut. Each offers a unique mix of features, but which one is right for your everyday banking needs?
In this comparison guide, we break down the pros, cons, and differences between the top challenger banks in the UK to help you make an informed decision.
What Are Challenger Banks?
Challenger banks are digital-first banks that aim to compete with traditional high street institutions by offering better user experience, low-cost services, and tech-forward features. Most operate via mobile apps and are known for:
- No physical branches
- Fast account setup
- Fee-free international spending
- Smart budgeting tools
- Real-time spending notifications
Challenger Bank Comparison: Monzo vs Starling vs Revolut
| Feature | Monzo | Starling Bank | Revolut |
|---|---|---|---|
| Founded | 2015 | 2014 | 2015 |
| Bank Licence | Full UK Bank | Full UK Bank | eMoney Licence (UK bank licence in progress) |
| Overdrafts & Loans | Yes | Yes | Limited (Premium only) |
| Fee-Free Spending Abroad | Yes | Yes | Yes (with limits on free usage) |
| Savings Interest | Up to 4.60% AER (Flex) | Up to 5.00% AER (Spaces) | Up to 4.75% AER (Plans) |
| Crypto & Stocks | No | No | Yes (Fees apply) |
| Customer Support | In-app chat, 24/7 | In-app + phone support | In-app, 24/7 (mixed reviews) |
Monzo – Best for Everyday Spending
Pros:
- Instant notifications & budgeting tools
- Flexible savings “pots” and salary sorter
- Strong overdraft and loan options
- “Flex” feature allows 0% instalments
Cons:
- No investment options
- Savings rates can require partner banks
Ideal for: Everyday banking, young professionals, budgeting
Starling Bank – Best All-Rounder
Pros:
- Strong interest on savings
- No fees for overseas spending or ATM withdrawals
- Business accounts available
- Supports cheque deposits by app
Cons:
- Slightly less modern interface than competitors
- Fewer premium features
Ideal for: Savers, frequent travellers, business users
Revolut – Best for Travel & Extras
Pros:
- Multi-currency accounts & cheap FX rates
- Built-in crypto and stock investing
- Travel insurance with premium accounts
- Instant card freezing, disposable cards
Cons:
- No full UK banking licence yet
- Fee structure can be confusing
- Customer service has mixed reviews
Ideal for: Travellers, digital nomads, tech-savvy users
Which One Should You Choose in 2025?
- Monzo is perfect if you want to control spending, track your finances, and occasionally borrow.
- Starling suits savers, small businesses, and those who value simplicity and strong fundamentals.
- Revolut is great for those who travel a lot, trade crypto, or want an all-in-one financial app — but be cautious about fees and limits.
Are Challenger Banks Safe?
Yes. Both Monzo and Starling are FCA-regulated and protected by the FSCS up to £85,000. Revolut, while FCA-registered, is still working toward a UK banking licence — which means FSCS protection is not yet guaranteed.
Final Verdict
Challenger banks have changed how we bank in the UK. With smart tools, competitive rates, and innovative features, they offer compelling alternatives to legacy banks. Whether you value saving interest, app design, or crypto access, there’s a challenger bank that suits your lifestyle in 2025.