Kroo Bank review – ethical digital banking

Kroo¹ is one of the UK’s newest banks. Having gained its banking licence in July 2022, it launched its first proper bank account in December 2022.

In true Money Saving Answers style, we signed up to be a guinea pig so we can tell you all about the account in this Kroo bank review.

Kroo Bank review at a glance

Kroo is a new digital bank account that gets most things right. It’s quick and easy to open, offers in credit interest and fee free foreign spending. It’s clean uncluttered app, and focus on sustainability, and transparency is welcome. It’s still fleshing out its proposition but is already highly useable as is. In the future we’d like to see 7 day switching, and budgeting options to match rivals in this space.

What is Kroo?

Kroo bills itself as a bank with a conscience and aims to be the ethical choice when it comes to digital banking in the UK. It was founded in 2016 as ‘B Social’ and offered an e-money account until 2022 when it was granted a full UK banking licence.

This ethical stance is at the core of its proposition and in 2023 it aims to plant two trees for every new customer that joins.

How much does Kroo cost?

Kroo is completely free to join and use. There are fees when withdrawing more than £200 a month via an ATM, and for sending some specialist payment types (such as CHAPS) but otherwise it’s completely free.

Of course, it’s still early days, and many banks which started out offering free accounts later introduced paid subscriptions and reserved certain features solely for those subscribers. Monzo is prime example of this, but there is no evidence of this at Kroo yet, and if anything changes we’ll let you know about it.

Opening a Kroo bank account

As an all-digital affair, opening an account with Kroo is as straightforward as it comes. It shouldn’t take more than 5 mins from your phone. Note: If you use our link here to open a Kroo bank account we’ll receive a small commission that helps keep the site running.

You must be resident in the UK and provide official photo ID such as a Passport, driving licence or EU/EEA ID card.

You will then need to take a short video (via the app) repeating the words on screen when prompted. This is used to biometrically match your ID.

Once you’re done, Kroo will validate the information. They say this can take several days, but in reality, it takes anything from 30 mins to an hour or two depending on how busy things are.

If your details can’t be validated you’ll be emailed and asked to provide more information, such as a bill showing your current address, a letter from HMRC, or a bank statement from a highstreet bank.

There is a soft credit search, but this isn’t something that can affect your ability to gain credit in the future in any way.

Once verified, your new Kroo Visa card will to be sent to your registered address. Typically, this would be with you in 5 days but with watch out for strikes at Royal Mail.

Card activation is handled via the app and is as simple as confirming a code, and the pin is set within the app during the onboarding process. This is a nice update from the older Kroo account (before it became a bank) where the pin was previously posted out to you.

What are the benefits of a Kroo account?

The main benefits of the Kroo account are:

• High interest rate on credit balances
• Fee free foreign spending
• Budgeting and saving pots
• Full financial services (FSCS) protection up to £85,000

Customers joining Kroo will enjoy a full UK bank account with visa debit card that is compatible with android and Apple Pay. In addition to regular banking activities such as direct debits, standing orders, faster payments, and debit card spending, the Kroo account also offers the following benefits:

4.35% AER interest on in credit balances

Rather than launch a separate savings account (as Starling has recently done) Kroo instead is offering 4.10% AER interest on in-credit current account balances. The interest is paid monthly, and a deposit of £1,000 you would earn £41 over a 12 month period. This offer is unbeatable on a current account at the moment, especially considering that interest is paid on balance up to £500,000.

It is an interesting approach which could lead to some customers earning more interest than they otherwise might, as it will be paid on their total balance rather than the money squirrelled away in a savings account.

The flip side however is that many like to physically separate their savings and expenditure which for now isn’t something Kroo caters for.

If you’re interested in savings, also see our article on the best digital savings accounts.

Tip: Higher rater tax payers should bear in mind that at these rates deposits of £13,500 would stand to earn close to £500 in interest, which is the limit of the tax free interest allowance. Any interest earned over this in any account baring an ISA will be taxed at 40%. Basic rate tax payers can earn up to £1,000 tax free interest, which at Kroo’s current rate would mean you save over £27,000 before you’d start paying tax on the interest. 

A note on Kroo interest rates – October 2023 update

Throughout 2023 Kroo has been the leading interest paying current account. In fact its rates rivalled the very best digital savings accounts. It was almost as if it was locked in a battle with Chip, to see who could raise rates the fastest and highest in the wake of Bank of England rises.

Now both seem to have stopped that war of attrition, and Kroo has gone another route entirely and by opting to pay a ‘tracker’ rate. From 15 October 2023 the interest you’ll earn on your Kroo current account will be 0.9% below the Bank of England base rate.

For example, with a Bank of England base rate of 5.5%, Kroo would pay 4.6% AER. Consequently, if the base rate fell to 4%, Kroo would pay 3.1% AER. As rates are expected to fluctuate, this change to a tracker means that in the future, you’ll know exactly where you stand.

When does Kroo pay interest?

Interest on credit balances in your Kroo account accrues daily, and is paid into your account on the 1st of every month. If you have notifications enabled you will get an alert when your interest is paid and how much it is.

Fee-free foreign spending

Fee-free foreign spending has been a recurring theme of challengers since the early days of digital banking. Kroo doesn’t disappoint here, and even dedicates a page on its website to foreign travel.

It promises zero fees on all foreign purchases, with zero mark up, and uses the Visa exchange rate on card purchases. In that regard it matches Chase, Monzo, and Starling.

Where it falls down a little is in the ATM withdrawal limits. Currently customers can only take out up to £200 equivalent every month without incurring a fee. Any withdrawals over this are charged at 3%. That falls someway behind Starling’s £300 daily limit. It would cost you £9 it you withdrew an additional £300 during your holiday.

If you don’t already have a top debit or credit card for foreign spending, then Kroo can fill that role for the most part, and you’ll get the visa exchange rate, but for large cash withdrawals, there may be better options.

Kroo account limits (deposits, spending, and withdrawals)

Those wishing to deposit large amounts, to take advantage of Kroo’s generous interest rate, will be happy to know there’s effectively no limit on deposits. This could be particularly useful for those thinking of buying a house soon, and wanting fast access to their cash, but with the benefit of earning a return on it while waiting to make their purchase.

Most limits are as you’d expect for a standard current account, with a maximum daily transfer out of £250,000, and daily card spending limit of £10,000. The more interesting part for us, is that while international transfers are not yet available, they are listed a being coming soon.

In-app budgeting and spending control

Kroo offers instant payment notifications, categorised spending, and the ability to split bills with friends. These features will be familiar to anyone with a digital bank account, but still aren’t very common with traditional banks.

Kroo savings pots

Kroo now also offers saving pots similar to Monzo or Starling’s spaces. This something its users had calling for in order to separate spending money, and bills, from savings. Currently,

Kroos pots feature allows you to set money aside from your main balance, for whatever purpose you want. Regardless of whether your money is in a pot or your main balance, you’ll still earn the same high interest rate.

Ethical banking

“For over a century, big banks have been reaping financial benefits, even at the expense of customer losses and harm to the planet.
We built Kroo to address this imbalance. We want to improve the relationship people have with their banks and money and, ultimately, give them more financial independence and control. Our goal is to be a bank people truly trust and love.”

Kroo is trying to appeal to socially conscious customers. It has teamed up with charity One Tree Planted, to plant two trees for every new customer it gains in 2023. Some time after our sign up, we were presented with a menu allowing us to chose which project our trees would be planted in. It felt a little gimmicky, if we’re honest.

It’s worth mentioning that Starling already has a partnership with Trillion Trees and has planted over 85,000 trees based on customer referrals. Of course, this isn’t a competition, but if a company is emphasising its environmentally friendly stance, then we expect more. Especially given the competition from Triodos, which recently won Best Ethical Financial Provider at last year’s British Bank Awards. Of course, the more customers that join Kroo, the more it can help.

Kroo loans

In August 2023 Kroo launched its loans product, offering customers loans of up to £5,000 with a representative APR of 8%. At that rate repayments would be around £156 a month over a three year period.

We don’t know how tough their election criteria is, but Kroo does promise and (almost) instant decision. Bear in mind that any application for a loan will be fully credit checked.

The drawbacks

Kroo is a completely digital account, but unlike its more established competition there’s no ability at all to deposit ‘analogue’ money. That means you can’t pay in cheques, or deposit cash. That might change in the future but it’s worth bearing in mind that Chase has been active for three years in the UK, and still has no way to pay in physical cash. Digital banks Starling and Monzo only added these features once they became more established.

Those looking to completely switch their banking to Kroo will also notice that Kroo isn’t a member of the CASS, and as such there is no 7-day switching service available. For now though, that is probably for the best while the bank focuses on developing its core services, and again is something that will likely come with time.

There are also no international payment options. You cannot send or receive any payments abroad into your Kroo account. If that is something you need, we’d suggest opening an account with Starling (see our long term Starling current account review) and then transferring money from there, to your Kroo account. Atlantic Money is another option for ad hoc foreign payments over £1,200. See our Atlantic Money review for more.

For UK based transfers, it’s also worth pointing out there’s no confirmation of payee yet. This is again something Kroo hope to add at a later stage. In the meantime you’ll want to double and triple and check the details of the person you are sending money to, just for peace of mind.

Is Kroo safe?

Kroo is a fully licensed UK bank, regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) which ensures that it meets certain standards and requirements to operate. It is covered by the Financial Services Compensation Scheme (FSCS) which means that your deposits are protected up to £85,000.

The banking app itself uses secure 256-bit data encryption to keep your details safe, and like most accounts these days, you can turn off, or freeze the card when not using it, for added security.

Kroo customer service

Customer service is another area where digital banks tend to excel. In fact, app based banks have topped the FCA quality of service poll for the past two years, with only First Direct getting close. In our experience Kroo is no different. Having joined shortly after Kroo gained its full banking licence, we found customer service queries to be dealt with quickly and efficiently.

In January 2023 Martin Lewis mentioned Kroo in his Weekly television slot on ITV. This cause a massive spike in new sign ups to Kroo, overwhelming its customer service department at the time. This was a temporary anomaly, and since then Kroo has taken measures to ensure it can handle large surges in demand in the future.

Kroo offers in app customer support, as well as email support at help@kroo.com and telephone support on 0800 802 1323. Lines are open between 9am and 5.30pm.

Is Kroo a good bank?

As a fee-free account we’d have to say yes. Joining takes all of 5 mins of your time, costs you nothing, and does some good for the environment.

There’s fee-free foreign spending, but others have been offering this for longer and with cards that work in a wider range of countries. The ATM withdrawal limits are low too, which means it’s not as useful as some of the compeition, in more cash orientated countries such as Germany and Italy.

The in credit interest is a nice touch especially on a current account. For many it will be one of the main reasons to join. It’s the highest rate we’ve seen on a current account, and at present only dedicated savings accounts match it. Chip’s instant access saver pays 4.5% is the closest we’ve seen without locking your money away.

As Kroo becomes more established we are likely to see more features and innovation. For those that don’t currently have a digital bank account, Kroo could be a nice entryway into digital banking, whilst keeping your traditional account to cover services not yet offered by Kroo.

If you already have an account with one of the main UK digital banks such as Chase, Monzo, or Starling, then you’ll already be familiar with much of what Kroo has to offer, but if you’re still curious, it’s certainly worth a look. After all, it’s free.

Do you bank with Kroo? Tell us what you think in the comments.

Frequently asked questions about Kroo

Kroo vs. Monzo – Is Kroo better than Monzo?

Kroo Bank is still relatively new and doesn’t offer as complete a set of features as some of the more established digital banks like Monzo. However, Kroo has made a strong start in the market and offers some attractive features.

For example, Kroo Bank offers higher interest rates than Monzo, even Monzo’s instant access saver, and lower rates on current account overdrafts. It’s also close to matching Monzo on fee-free foreign spending and ATM withdrawals abroad. The fees and limits are also similar.

Where Monzo pulls ahead is on things like budgeting, joint accounts (not yet offered by Kroo), and paying in cash/cheques, and paid features such as virtual cards.

Kroo Bank promotes its social consciousness and transparency more than Monzo. The bank has partnered with One Tree Planted to plant two trees for every new customer that joins, and customers themselves get to choose the project where their trees are planted.

Is Kroo a bank?

Yes, Kroo was granted its banking licence in June 2022, making it a fully fledged UK bank along side the likes of Starling, and Monzo, and highstreet stalwarts such as Barclays, Halifax and Nat West.

Many larger trusted fintechs such as Revolut, Klarna, and Wise don’t currently have banking licences in the UK.

Who owns Kroo bank?

Kroo was founded in 2016 by Tim Brown and Nazim Valimahomed. Both have retained more than 25% ownership in the bank. The current CEO is Andrea De Gottardo.

Kroo Bank is a private limited company incorporated on 5 September 2016, and its registered address is Labs House, 15-19 Bloomsbury Way, London, England, WC1A 2TH. The latest filing history of the company shows that it has no single majority shareholder, and it is owned by various shareholders.

How much can withdraw from Kroo?

The current spending limits on Kroo accounts are £300 in the UK at an ATM, and £10,000 at the point of sale.

Is Kroo good to use abroad?

Yes, Kroo is an excellent option for spending abroad when travelling or when buying items on foreign websites. There are no fees at all on foreign spending, and 0% markup on currency exchange. There are also no ATM fees at all until April 2024, after which foreign ATM withdrawals are free up to £200.

How Many customers does Kroo have?

The number of customers with accounts at Kroo is around 200,00, with customer deposits close to £1bn. However, not all of these customers are using Kroo as their main account.