Overnight, all that we need for our spending, saving, and budgeting is quite literally in our pocket.
As people continue to migrate to online banking, the availability of Fintech online banks are growing rapidly, to give users a ton of great tools and capabilities that are transforming how we go about banking.
Ready to get travelling and mobile? Just download your app, some unify all accounts in one place—in this guide, we cover the top online banks & apps.
Table of Contents:
- Our Top Pick of Best Online Banks & Apps
- 1. 💷 Starling — Best Overall
- 2. 💷 Monzo — Great Budgeting
- 3. 💷 Revolut — Best for Travellers
- 4. 💷 Lumio — Unify all Accounts & Spend
- 5. 💷 Money Dashboard — Unify to Budget
- 6. 💷 YNAB — Unify for Goals
- Budgeting Explained
- Difference Between Budgeting & Saving
- “Seven Baby Steps”
- Why Open Banking is Useful
Our Top Pick of Best Online Banks & Apps in 2023 (UK) 🇬🇧
Did you know: 16% of the UK adults indebted? This debt issue is 28% for single mothers and fathers.
To avoid this, budgeting is key. Which means balancing earnings against spending. If you don’t end up in the clear, then there’s a budgeting problem. Some people do not know if their expenses are leaking faster than their revenue, and so they slowly creep more into debt.
So to ensure you don’t go into debt, head to the Seven Baby Steps section 👶
1. Starling Bank Review – Britain’s Most Award-Winning Online Bank & App
The first half of this review is for pure banking apps, while the second half gives you a way to unify all of your financial data, so it doesn’t get overwhelming.
First on the list is the Bills Manager, which I would personally say is an essential budgeting feature for 2023.
This lets you segment a portion of your money into a Saving Space. But where it gets interesting is that you can assign specific direct debits, such as a gym membership, to be paid directly from that part. Which makes it very clear exactly what you have remaining for actual day-to-day spending.
While the Card Controls the contingency feature for security in the event that your cardio is lost or stolen. You can instantly freeze it from the app, which disables any chip and pin, contactless, ATM withdrawals, mobile wallet, or online payments. Block and unblock at the tap. You can even block any gambling transactions.
One unusual feature is that Starling lets you do Check Deposits directly from the app, which is processed faster than through post (By the end of the next working day). No need to visit your bank branch. Review any previous cheques from the app. And get an instant alert for the moment that the cheque has been cleared. To use this, you pick a picture of the selfie at a 90° angle, checks have to be £500 or less.
But the list of unusually innovative features continues…with the Connected Card feature, which is a special card you can order and hand to friends or family, so that they can make payments on your behalf. How it works is that you designate a specific Saving Space to this person, so that there is no need for handling bank details or cash.
And a few other cool features to mention include Split the Bill; how it works is you first activate the Setting up ability, which has its own pay section giving you different options to split the bill, such as between different numbers of people. You pay the whole bill from your app and Starling spits out a bunch of IOUs to their email, with her secure webpage where they can pay you back. (They can also do this directly in the app if they are with Starling).
While you are probably earlier familiar with the Round Ups feature, which simply rounds your payment for transactions up to the nearest pound (for instance, McDonald’s does this whenever you buy a meal, offering you to give the rest to charity). This money fees into your Saving Space.
And finally, if you want a way to actually deposit into your Starling account, in a similar way to visiting your bank branch to deposit money, just visit your nearest Post Office. To make a deposit, put your debit card into one of the card machines on the counter, select the amount and money usually arrives within minutes. Although this is usually limited to £2000.
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2. Monzo Bank Review – Budget-Minded Top Online Bank and App
Monzo online banking reveals more and more capabilities the more you explore it – so much so that they’ve had to blog about it. For the most part, its features crossover with Starling.
To start with, Instant Balances lets you know what your new balance is, from the moment that you spend money.
This feature can keep you aware of what you're spending, in a similar way to actually paying in cash. Which means no need to wait a day or two for your account to update, you always have an accurate balance.
You can also instantly Freeze and Defrost your Monzo cards, so that payments can no longer be made. Once again, there’s a good number of use cases for this. Ranging from blocking an unauthorised direct debit attempt to bring the freeze on your account if your card happens to get lost. If you don’t find it, they’ll issue a replacement Monzo card.
Monzo takes an interesting approach to account security by not relying on passwords. Instead, Magic Links mean there’s no need to remember passwords to login to Monzo. (They don’t even use PINs, which Starling banking app does). Instead, everything is confirmed in your email. The app assumes most users don’t follow great password practices, sometimes reusing or choosing guessable ones.
One critical feature is the ability to pay anybody near you, simply by using Bluetooth Payment. This is what it sounds like. You don’t need this person’s phone number. They don’t need to have a Monzo account. As long as you both enable Bluetooth, you can send payments to their online banking app – this capability works using the Google Nearby API service, which is branded as Nearby Friends.
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3. Revolut Review – Budget-Minded Top E-Money Institution and App
Revolut doubles up as an international money transfer service. Which makes this ideal for travellers seeking ideal exchange rates and transfer fees.
From inside of the mobile app, you can make global transfers to wherever, and even put some money into crypto, commodities and stocks.
To begin with, Global Payments lets you transfer money in over 30 currencies to different accounts, regardless of the location. Payment links or Flash QR codes can request / send payments, featuring funny gifs. As with crypto wallet addresses, a @Revtag lets your social media subs, or friends or family collect money through your shareable URL without bank details.
Many features the two previous online banking apps have, such as Split the Bill and Round Ups are available. Heather decent budgeting features, for instance letting you know when you’re closing in on your spending limit for the month or day. Some pretty small analytics there automatically figures out what categories of transactions are, such as restaurants, transport, shopping, someone – so that you can visually see your spending habits at-a-glance.
Nonetheless, we’ve ranked this less worthy due to lack of FSCS insurance, or the ability to deposit funds to your account in cash or cheques. Both of these are considerable weaknesses.
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4. Lumio review – Unify Your Top Online Bank & Apps
The free platform Lumio brands itself as a way to squirrel away extra money from right under your nose, while also giving you oversight into all of your bank accounts through one portal.
In short, this means that the Lumio online bank app can be used to connect all of your different savings, pensions, and investment accounts in one dashboard. This isn’t just to generate a single figure, or to show all of your balances in one place.
The app also focuses on categorising your differing cash flow so that you can see your different streams more clearly: income, expenditure, investments, without flitting between different accounts and logins.
As for the track record of this service, they have around 50,000 users – most of these will be using the app for detailed insights into their money streams. In order to get clarity on earnings to expenses ratios and assets to liabilities. It’s a way to budget intelligently without going through unwieldy spreadsheets.
Despite all of this power, there isn’t a long setup cell process. In fact, this takes only a few minutes. The most important thing, if you want as much insight as possible, is to enable open banking, which will allow the app to view all of your different online accounts. Which places more of a mixture of budgeting and savings, or even investment management.
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5. Money Dashboard – Best Online Bank & App for Anti-Delusion
Because nobody knows what’s happening to the world’s markets, or even if a major recession is underway, it is more important than ever to not be deluded about your cash-flow.
Sounds simple. And it is with this app.
Money Dashboard is extremely focused on budgeting by giving your portal where all of your different bank accounts can be clearly overviewed.
The Scottish created service has over 10x more users than the Lumio online banking app, which means one of the most used online banking apps in the UK aimed at budgeting. Unify your investments, savings, and day-to-day banking accounts, and more – in order to better evaluate what is actually happening. Because the app is so hyper-focused on budgeting, there’s a bunch of cool features to really get into the nitty-gritty.
For instance, the app does automatically apply labels by category, in order to batch different types of transactions. But you can also dip into specific transactions and manually change labels. And there is more flexibility synchronising your payment schedule, rather than having the app automatically assuming appeared at the end of the month.
Let’s give an example of using this practically. Let’s say you are using the Starling banking app, which lets you specifically allocate a Savings Space to a transaction or number of transactions, such as a recurring direct debit for council tax. Suppose your utilities are paid on the 25th of every month. You could use Money Dashboard to get a budget prediction that factors in all of your expected bills. Then program your full online banking app to pay from a specific saving space.
Which eliminates inaccurate budgeting that can actually happen from not knowing how much you have at the end of the month after all of the practicalities are taken care of.
For all of the above reasons, Money Dashboard is a terrific companion to a more complete online banking app, if your goal is to get extreme clarity on exactly how your money is moving. Rather than spending precious minutes on a frequent basis trying to (inaccurately) calculate mentally what’s happening, Money Dashboard gives you a permanent fix forever. Saving thousands of hours and thousands of pounds. You know exactly what’s happening at a glance once it’s downloaded and set up.
The main risk? With Boris Johnson getting hacked, make sure your device is anonymous.
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6. YNAB – Best Online Bank & App Companion for Goals
Short for “You Need a Budget,” these guys are a favourite budgeting companion to online banking apps for many people.
To begin with, you need to Connect Your Accounts which ends up loading onto the app once it clears with your various bank accounts.
The company actually recommends that you record your own spending immediately after you do it, into the app, so that you know you haven’t overlooked anything.
Once you are synchronised in real-time, you can use the Goal Tracking feature to treat your budgeting like a game. Open up the application and check on your progress towards your financial goals. These are bars of different colours according to specific budget categories, including what you have available for spending and how much activity you’ve made in that basket.
Rather than deciding at the supermarket counter whether you can afford that extra item, simply open up the app and check.
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Best Budget Apps – Buying Guide 📊
This section is here to give you an introduction into how online banking apps work today. There’s been lots of changes, so it should let you make a better decision on the best online banks and apps to use:
Does Your Online Banking App Auto-Save?
Pretty much all the top online banking apps double-up as saving apps. They understand the growing need for clarity as money becomes infinitely more complicated and unpredictable.
The auto saving feature attempts to gather money in small amounts without your notice. For example, Starling bank does rounding up for purchases.
Rather than saving money by taking away time doing complicated budgeting, these types of apps save both by trying to figure out how to strip away the efficiencies where possible – mainly by relying on machine learning and analysing your behavioural patterns. To cut out all of the flowery language, this saves you time and money.
Budget Compared to Save
Budgeting is about trying to figure out how the numbers in your accounts will move across a specific period of time – the top two metrics are ingoings & outgoings. It’s about seeing what’s moving into your account, what’s coming out. You can also draw insights from historical data.
A budget can be used to save cash monthly. And it can be applied to just one person, or a number of people, a household, organisation, government institution, even a country – anything that spends and makes things.
By comparison, savings is just one aspect of the budgeting, meaning whatever is leftover after you deduct expenses from whatever you’ve earned. This is your indispensable net worth.
Reasons for each
Whereas budgets are a financial pathway, savings are one key indicator that you are using this practice correctly. If your savings are not climbing over time, and this is unexpected, chances are you have some delusion with your budgeting plan.
How to boost both savings and budgeting
Debt is the enemy of saving and budgets, although some business-figures work on a higher-level abstract way of thinking of debt. Generally speaking, you should avoid debt. One you get accustomed to using overdrafts or credit, in order to keep afloat (one instance, many people are using the ‘Buy Now, Pay Later’ features offered by digital banks like PayPal), debt will inevitably grow and become compounded and so you’ll have to work much harder to save.
You’ll also miss out on opportunities for investing free cash. Or be much more vulnerable if the market moves into the wrong direction. Indeed, the world is currently seeing a global recession.
⭐ Keep in mind that digital banks like Starling and Monzo incorporate budgeting into their systems, but don’t have the ability to combine your financial accounts in the way of budgeting open banks like Lumio or Money Dashboard.
“Seven Baby Steps” 🐤
Whenever discussing online banks and savings, I like to discuss budgeting in a simple way.
So let’s review the basics of budgeting so that you can make the best of your online bank and/or apps. This section is dedicated to offering the most practical saving and budgeting tips as advised by one very popular financial budgeting expert Dave Ramsey – although his ‘EveryDollar app’ might not be the best online bank and app on the market, it’s worth considering how his Seven Baby Steps could give you a good grounding as your handle your savings and budgeting spaces...
- 🐤 Baby Step 1: We begin by saving a grand of cash in what’s called a Starter Emergency Fund - while some economists believe cash is a bad idea, you could consider investing this in the most secure way possible, but it should remain liquid (accessible). This will be your guardrail against unexpected life events that happen from time to time. These will always be around the corner. Give yourself insulation right from the beginning!
- 🐤 Baby Step 2: Free yourself of all debt (minus the house) using the ‘Debt Snowball’ - There is no saving if you’re in debt. So you should start with getting rid of those car, credit card, and student loan debt. Everything other than the mortgage. Weigh these according to size, ignoring interest rates. Start with the smallest debt, paying as much as you can. Do minimum payments for the others. To repeat: pay as much as possible for the smallest debt - once that’s cleared, repeat the newest smallest debt, until none remain. That’s why we call it the Debt Snowball. Ignore interest rates.
- 🐤 Baby Step 3: Now we move onto bigger savings, for between three and six months of expenses, which we call the Fully Funded Emergency Fund - now what we no longer have debt, it’s time to move that snowballing stream into a fully-funded emergency that will cover you for six months up to a year of expenses (Ray Dalio recommends the same amount). This will be your guardrail against bigger unexpected life events, such as losing a job, or something important breaking down. You don’t want to be forced back into debt!
- 🐤 Baby Step 4: Put 25% of your household’s total income towards retirement - Because debt is cleared and bigger financial life surprises are insulated against, you can look further ahead by investing 25% of your total income to retirement. This will let you have the option to work in later or to not work, according to your preferences. You want to avoid having to work in old age. You can go through a professional investor or index fund.
- 🐤 Baby Step 5: Consider saving for your children. This is where we’re starting to look at generational wealth. Start saving for your kid’s educational and university fund -although your house isn’t paid off, retirement savings are already in full effect. This is a major protection. So next is to save for your children.
- 🐤 Baby Step 6: Let’s clear out that mortgage early - This is the real clincher. You want to separate yourself from being a renter in your own home, Paying off the mortgage is the big move keeping you from a life that is completely free of debt. Just consider how it would be without any house payments. Clearing your mortgage early will additionally mean you can save, by avoiding wasting tons of money in interest fees.
- 🐤 Baby Step 7: Now that you’re a billionaire, do what many others are doing today -- start giving back. Write books, share advice, and mentor. Do what you can to help others who have less. Wealthy people have the freedom to use their time how they want. Seeing as your children are already looked after, there’s nothing more rewarding than sharing with your community.
FAQs
Why Open Banking is Useful
Open banking lets third party services see into your banking accounts, so that they can use this data to give you better and more efficient insight into what’s going on overall.
This includes things like amalgamating all of your balances into a single dashboard. But these apps also tweak cash-flow and make suggestions so you can save more, using savings algorithms.
These little gremlins hide away tiny amounts of your money, without you really noticing at first. But, over time, you certainly notice the savings.
