As a student, managing your finances is like starting a new journey. Thankfully, with several online banks in the UK, establishing your financial independence has become hassle-free. These banks offer a modern solution to transfer money in multiple currencies, open accounts without ever visiting a branch, and even withdraw money from ATMs. The best online banks in the UK add the perfect mix of convenience and flexibility. To help you understand how online-only banking can help, we share the advantages and a comprehensive list of digital banks in the UK.
What is an Online Bank in the UK?
Online-only or digital banks in UK let you open your account in minutes instead of visiting branches. They allow customers to transfer funds, pay bills, and handle banking services at home. The entire process is at your fingertips; all you need is access to the websites or mobile apps.
The appeal of these online banks mainly includes low fees and affordable international money transfers. HSBC and Barclays are two of the best student banks in the UK when it comes to traditional banking, and they heavily rely on branches. On the contrary, online banks depend on digital channels: apps and websites. The best online banks in UK undercut major banking fees and allow fee-free ATM withdrawals.
Advantages of Using Digital Banks in the UK
86% of adults use online banks in UK now, whereas 53% of UK adults have moved to mobile banking. Especially for international students, the ease of sending money in different currencies is a boon. Below, we share the many advantages of opening an online bank account in the UK to ease your journey!
8 Best Online Banks in the UK
Features, tools, and monthly fees are the factors to consider when looking for an online bank in the UK. Many like banking apps that let you personalise your money-related stuff and offer spending categories. Others focus more on privacy, digital cheque deposits, and convenience. Keeping these aspects in mind, we share a list of digital banks in UK below:
1. Monzo
Types of Accounts: Monzo, Monzo Plus, Monzo Premium
Potential fees: 3% of every withdrawal if you withdraw over £250 per month
Best Features: Expense tracking, joint accounts, salary sorter, custom savings goals
With competitive rates, Monzo is one of the best online banks in UK for many reasons. It is easy and free to use, but you will not receive debit cards or card top-ups. You can have joint accounts, manage your bills, and use Monzo's smart features for budgeting. For international students, Monzo has become one of their favourite digital banks in UK. The multi-currency accounts let them manage money in different currencies. It's a hassle-free feature, especially when making payments back home or travelling abroad.
2. Monese
Types of Accounts: Simple Account, Classic Account, Premium Account
Potential Fees: £4.95 for every debit card delivery and £1.95 for every cash machine withdrawal
Best Features: Global banking, PayPal integration, savings pots, contactless Mastercard and debit card
Monese is a convenient option for newly arriving students in the UK. In fact, it is one of the best banks in UK, with no monthly fees and free ATM withdrawals. Through its app, you can easily manage your finances in different currencies. You can share accounts with your flatmates and use the budgeting tools. Monese tracks your spending and keeps an eye on your money habits. Monese is one of the popular digital banks in UK and is compatible with Apple Pay. You can get virtual debit cards and transfer money to over 30 countries. However, conversion fees for non-GBP, SEK, RON, and EUR are high.
3. Revolut
Types of Accounts: Standard, Plus, Premium
Potential Fees: 2% of cashpoint withdrawal fee only if you make more than five withdrawals or exceed £200 per month
Best Features: Multi-currency balances, EU account details
You might be surprised to know that we have added a non-UK-based bank to our compilation of the best online banks in UK! Why? Revolut has the license of the Bank of Lithuania but is UK’s most popular fintech. If you are looking for a UK online banking app, you have probably heard of it — especially for its innovative platform. The platform offers several financial services: easy money transfers between Revolut users and fee-free spending abroad. You can hold and exchange money through the app, too. As it’s not one of the UK digital banks, it's mostly used as an effective spending tool along with your bank account.
4. Kroo
Types of Accounts: Kroo Account, Kroo Plus
Potential Fees: 3% of cashpoint withdrawal fee in foreign currency outside the UK, if the amount exceeds £200 in a month
Best Features: Real-time information, overdrafts, shared expenses
Kroo is 100% online through its mobile app and has quickly become one of the best online banks in UK. It recurs no monthly account fees; you do not have to pay foreign transaction fees either. Through Kroo accounts, you can manage your money across different currencies, too. The app features an automatic rounding-up and savings pots to help users build up their savings balance. Besides, its option to temporarily freeze/unfreeze debit cards via the app is one of the reasons for Kroo to become one of the best online banks in UK. With Kroo Plus, you can get interest on credit balances.
5. Zopa
Types of Accounts: Zopa Money Full Account, Zopa Money Basic Account
Potential Fees: £1 fee for every withdrawal from ATMs outside the UK
Best Features: Split bills with UK users, 24/7 support, no monthly account fees
Though relatively new in the finance system, Zopa has quickly become one of the best online banks in UK. It started as a peer-to-peer lending company and soon gained a full banking license. Zopa offers savings accounts and credit cards with a cash ISA (Individual Savings Account). Zopa is easy and quick to start with; all you need to invest is £1 for cash ISAs. For fixed-rate accounts, you need a minimum investment of £1,000. Plus, you can get competitive rates on the Zopa Money Full account and see your deposits grow faster.
6. Anna
Types of Accounts: Anna Money, Anna Business Account
Potential Fees: £3 fee for international transfers, £35 for forced debit card cancellation
Best Features: Automated tax calculations, multi-currency wallets, unlimited invoicing
If you have recently started finding freelancing gigs, you need a business current account first. For freelancers, Anna is the best online in UK for its automatic invoicing and invoice management. This digital bank also offers 1% cashback on business transactions. You can access a variety of employee cards, too. You can create pots in your account to save for expenses and connect other accounts through Open Banking. As it’s one of the best online banks in UK for businesses, you can choose a pay-as-you-go plan or pay a fee every month.
7. Virgin Money
Types of Accounts: M Plus Account, M Account
Potential Fees: £1.25 fee per month for agreed overdraft usage and £5 for cancelling a Direct Debit
Best Features: Easy savings, fixed rate cash ISAs, self-invested personal pensions
Virgin Money, a British online bank, allows students to open an account online or through the mobile app with only a few basic details. The accounts have no monthly maintenance fees and let you withdraw money when making purchases abroad. You can also get budgeting insights and track spending. Virgin Money is also the best UK online bank, as you can get free debit cards if yours is lost or stolen. Once you sign up, you will receive interest or gift cards. It also offers financial planning and investment advice services.
8. Starling Bank
Types of Accounts: Starling Personal Account, Starling Business Account
Potential Fees: £20 for every CHAPS transfer in the UK, £5 for a replacement debit card
Best Features: Pension scheme, overdraft, youth card, saving spaces
Anne Boden, a Welsh tech entrepreneur, introduced Starling Bank in 2014 to stir up the financial sector. This neo-bank got its license in 2016 and rolled out its mobile-only current account in 2017. With its innovative features, Starling Bank became one of the best online banks in UK. Plus, you do not have to pay monthly account fees and can make fee-free ATM withdrawals. Another reason for Starling Bank to become one of the top UK digital banks is its compatibility with Samsung Pay, Garmin Pay, Google Pay, and Fitbit Pay. Plus, you can see spending insights to understand how to budget.
Tips for Using Online Banking in the UK
With the rapid development of digital banks in UK, you should keep a few tips in mind. Knowing how to open a bank in the UK is not the sole way to have full control over your finances. If you know these tips, you can make the most of a UK virtual bank account.
1. Privacy is the Key
Create a strong password and never share login details. If two-factor authentication is available, always go for it. Also, check whether the website URL has "https://" and a lock icon. Even if you have the best UK online bank account, do not use public WiFi. Hackers can steal your data!
2. Check before Sending Money
The best online banks in UK have peer-to-peer payment networks so that you can send money to other account holders immediately. Always double-check the recipient's information! A British online bank is not liable to reverse the transaction if you send money to the wrong recipient.
3. Use the Budgeting Features
Spending insights and savings pots are common for the best online banks in UK. Monthly reports help you understand where your money is going. Are you spending too much on travel or groceries? Also, turn on the notifications whenever you use your card to spot fraud right away.
Now that you have gone through this list, you should have an idea of the best online bank in UK for your needs. Convenience, low costs, and financial control are the main factors in choosing your e-bank. However, no matter how impressive the digital banks in UK sound, watch out for the hidden banking charges. So, review the features and document requirements before signing up.