Another day, another paid-for Monzo account. Whilst the Monzo standard account might be one of the best out there its paid accounts have so far been underwhelming.
With auditors Ernst & Young previously voicing their doubts about the bank as a going concern, it’s clear that Monzo is keen to generate additional revenue streams to offset its huge losses. The Monzo Premium account appears to be a response to that. At £15 a month it’s packed with features, and in true Monzo style, there’s a fancy new card to go with it; but is it any good?
The ill-fated ‘Plus’ account cost £5 a month, Premium raises this to a hefty £15 a month, and includes a six month minimum term. That’s £180 a year, or £90 if you only keep the account the minimum term.
Whilst that might seem pretty steep, Monzo claims that the account benefits are worth up to £256 a year. Is it good value? That remains to be seen.
Before we get started, it’s worth mentioning that Monzo is currently offering a £5 sign up bonus to new customers. To get the bonus, sign up for a Monzo account via our link, and make one card purchase within 30 days. It doesn’t matter which Monzo account you sign up for so you might as well start with the free one.
Who can open a Monzo Premium account?
Before discussing the Premium account benefits in detail, it is first worth addressing the eligibility criteria for the account. As it comes bundled with insurance this imposes an 18-69 year old age limit on the account. It’s only available as a sole/single account, so not possible to upgrade a joint or business account to Premium
What do you get?
The Premium account includes all of the Plus benefits i.e. Virtual cards, increased forgien ATM withdrawal limits, interest on savings, and advanced round-ups.
In addition, it also includes:
Metal cards are in vogue at the moment. First Revolut, then Apple, now Monzo. The Monzo Premium metal card is a 16g sheet of white steel with engraved logo. The card costs £50 to make, hence the six-month minimum term on the account to recoup some of the cost.
The card looks fantastic, and carries the holders name and account details on the back, allowing it to be shown off without fear someone feverishly noting down your card number. Given Monzo’s current crisis, one has to wonder why the bank has opted for such an extravagant card, the cost of which while past on to the customer will still eat into the company’s margin.
Mobile phone insurance
Monzo claims its bundled mobile phone insurance is worth £97 a year. That’s moot as far was we’re concerned, as that price can be beaten if you are prepared to shop around, though we’ll admit it does depend on your model of phone.
It offers £2,000 cover against theft, loss and accidental damage including cracked screens, but crucially, only covers the account holder’s phone. The underwriters will repair or replaced lost, damaged or stolen phones, but these will be from refurbished stock, an exact match and colour isn’t guaranteed.
Mobile accessories, including chargers, headphones, cases etc… are also covered if they are lost/damaged with the phone.
Unauthorised use is covered up to £1000, so there is some piece of mind should your phone be lost/stolen and large bills run up.
It is also worth noting that the excess is £75 for each claim, and only two claims are permitted in a 12 month period.
Worldwide travel insurance
It’s a strange time to be promoting travel insurance given the restrictions around travel as a result of the COVID19 pandemic in 2020 and 2021.
The policy is estimated to be worth £159 a year, and covers the holder and family including children up to 19 years old, or 21 years old if in full-time education.
There is a maximum trip duration of 45 days, and £50 excess per claim. Compare that to Revolut’s 90 day maximum trip duration and it doesn’t look so good, but it is longer than Nationwide’s 31 days. In reality few of us travel for that long in a single trip anyway.
This is one where you would really comb through the policy in its entirety to ensure it covers everything you need, especially when it comes to sports and activities.
As ever it’s worth comparing this against stand alone and annual cover from the usual sources and comparison sites, as insurance is rarely a one size fits all affair. Especially as some important items such as valuables are excluded.
Increased interest on savings
Monzo Plus offers 1% on up to £2000 of savings (£20), Monzo Premium raises this to 1.5% (£30). Savings interest is paid on the accounts main balance and pots, but not on ‘savings’ pots. Bear in mind that this is below the rate of inflation so you are actually losing money in real terms.
With the Bank of England increasing the base rate now to 3% (November 2022), the 1.5% offered by Monzo Premium (which hasn’t changed since its launch) isn’t particularly competitive. Chase UK for example offers a 2.1% easy access savings account, and traditional banks such as Santander up to 2.75%.
Higher overseas withdrawal limits
Regular Monzo account holders can withdraw a maximum of £200 a month from foreign ATMs before Monzo charges a fee. The Plus account bumps this up to £400. The new Premium account increases this again to £600.
Unfortunately these limits aren’t even remotely competitive when one considers that Starling offers practically unlimited fee free foreign withdrawals (capped at £300 per day, meaning you could withdraw £9k over the course of a month). Monzo itself started as prepay travel card offering the same, but over time has slowly grown worse as a travel companion. For this reason it is doesn’t make it near the top of our list of the ‘best cards for foreign spending’
Free cash deposits
Another perk of the Monzo Premium account is the ability to make five cash deposits a month completely free. The free Monzo account charges £1 per deposit.
Whilst useful for those that do need to deposit cash, Monzo loses out here as cash deposits are free with Starling, and have always been free with the traditional branch based banks.
Discounted airport lounge access
Pretty much every bonus and incentive scheme throws airport lounges access out there as a benefit. If it was free perhaps it would be. Unfortunately that is seldom the case, and access is instead offered at a ‘discount’. Monzo Premium is no exception. Your £15 a month subscription gets you access to the LoungeKey programme for £24 per person per visit.
Is Monzo Premium worth it?
There is a lot to like about Premium, its value however really depends on whether or not you are able to make use of its benefits. At £15 a month it’s not cheap, and spending that when so much of the Monzo account is about saving, is something of an oxymoron. Added to that, there are potentially better solutions out there. Nationwide’s FlexPlus for example offers similar insurance coverage for £13 a month, and includes UK and European breakdown cover.
Additionally, with travel restricted, and the pandemic not quite behind us it would be difficult to take advantage of many of the Monzo Premium account benefits. And with that in mind, our verdict is that the Premium account swings big, but misses on more occasions than it wins.
Currently the large high street banks are battling for customers and offering up to £150 for switchers, plus other incentives, some of which overlap with Monzo’s Premium offering. If considering opening a new account, see our post on the best bribes and incentives for current bank account switchers.
Monzo going forward
Monzo is the UK’s largest digital only bank with its 5 million plus registered users accounting for 39% of the digital banking market. Despite its growth the bank sits behind Starling in terms of deposit amounts per user, as more customers see use it as a second account. Monzo claims that 2.7% of its customers have sign up for a paid account. It will surely be looking to grow this figure in 2022, so it might well be worth keeping on eye on as the incentives change.
Monzo leads the way in customer satisfaction
Whilst digital banking means we need less contact with our bank, for many, customer service is still an important consideration. For many years traditional banks have performed poorly in this area, with only HSBC’s First Direct brand standing out for top level customer service.
Research commissioned by the Financial Conduct Authority, shows that digital banks have their traditional counterparts beaten on customer satisfaction. Monzo leads the way with a record score of 86% for overall service. Starling is second scoring 84%, and the ever present First Direct at 83%. This is one to keep an eye on, as traditional banks up their game in the wake of eroding market share, and new entrants such as Chase Bank vie for customers.