Monzo relaunches premium account – but is it worth it?

Monzo Plus customers pay £5 monthly fee for extra features including holographic card

Digital bank Monzo has relaunched its paid-for “Monzo Plus” account offering better savings rates and a new holographic bank card, but is it worth getting?

Monzo Plus was initially launched as a packaged account in May 2019 ,which offered travel insurance, but was pulled in September because the firm said it was not “the best it could be".

The revamped Monzo Plus account will initially be made available to existing customers over the next fortnight.

What does Monzo Plus offer?

Monzo Plus comes with a flat monthly fee of £5 and you have to sign up for a minimum of three months.

The account offers the following features:

1% interest on up to £2,000

Monzo Plus offers 1% interest up to £2,000 in your account. The interest is applied to your current account balance as well as any savings pots you may have. This means that you could earn up to £20 a year in interest if you hold £2,000 or more in your account.

Increased free ATM withdrawals abroad

Customers will get £400 fee-free cash overseas withdrawals every 30 days.

This is double the limit for regular current account holders, which is £200.

Withdrawals over these limits incur a 3% charge.

Up to five virtual cards

In addition to your physical Monzo card, you can set up a maximum of five virtual cards which can be used for online purchases.

The money you spend on the virtual cards comes from your Monzo balance.

Virtual cards can come in handy if you have to freeze or cancel your physical card if it gets lost or stolen.

Usually payments associated with that card will not be processed as the card is blocked.

The virtual cards can be cancelled at any time.

View other bank accounts in Monzo app

This Open Banking feature allows you to view bank account and credit card information from other providers in the Monzo app.

You will be able to see your balances, transactions and move money around with easy bank transfers.

Barclays, HSBC, Lloyds and Nationwide are among the many providers you can link to your app.

Advanced budgeting features

Monzo says that having more control over budgeting features was one of the most-requested features from existing customers.

Its premium account allows users to set up their own spending categories, as well as splitting single transactions into different categories.

For example, you could split your £80 shop at Sainsbury’s into £45 on groceries and £35 on wine.

Monzo Plus account holders can also export spending data into Google Sheets to analyse however they wish.

Offers and discounts

Account holders can access a variety of offers when spending on their Monzo plus card. This includes 15% off Patch plant orders over £50 and 25% of FiiT home workout membership.

A new blue holographic card

Monzo Plus customers will get a bright blue holographic card, very distinctive from the iconic hot coral used for its regular current account card.

Monthly credit score updates

Monzo Plus customers gives customers credit score updates from TransUnion.

How does Monzo Plus compare?

While Monzo Plus offers account interest of 1%, there are other options on the market which do not require customers to pay a fee.

The Virgin Money Current Account, for example, pays 2% on balances of up to £1,000, allowing customers to earn up to £20 a year in interest. It is fee-free and there are also no charges for using the card abroad.

Nationwide’s FlexDirect pays 2% on balances of up to £1,500 in the first year; meaning that you could earn £30 over 12 months. This interest falls to 0.25% after that and customers must pay at least £1,000 into the account each month.

Should you get Monzo Plus?

Monzo Plus does give customers more budgeting controls, virtual cards, offers and discounts.

But many of the financial benefits of the account can be found elsewhere for free.

If you are looking for maximum interest, there are other fee-free options on the market.

The NS&I Income Bonds easy access deal, for example, pays 1.16% on balances of up to £1 million while the NS&I Direct Saver pays 1% on balances of up to £2 million.

For more fee-free spending abroad, Starling Bank’s regular current account offers unlimited fee-free spending and withdrawals abroad.

You can also view your TransUnion credit score and credit report for free using Credit Karma and MoneySupermaket’s Credit Monitor.