Monzo Business Account Review

By Olivia Johnson - Trusted UK Business Expert

4th of October 2024

5 minute read

Monzo is a popular online bank offering affordable business accounts in the UK. 

Features 

  • Company: Monzo Bank Limited 
  • Account Type: Business current account 
  • Intended For: Limited companies and sole traders 
  • Overdrafts: Available 
  • Loans: Available 
  • Monthly Fee: £0-£5 
  • Debit Card: Included (Debit Mastercard) 
  • Credit Card: Not available 
  • IBAN: Included 

To open a Monzo Business account, follow the link below and download the Monzo app on your phone to start the sign-up process. 

Opening A Monzo Business Account

CREATE ACCOUNT 

What is a Monzo Business Account? 

Monzo was one of the first online banks based in the UK. Without physical branches, it operates entirely through a frequently updated mobile app. Monzo offers both personal and business current accounts in GBP, with two tiers for business accounts: 

  • Lite: £0/month 
  • Pro: £5/month 

Both plans are available for companies and sole traders, with Pro offering enhanced features suited for limited companies. Every account includes a Debit Mastercard. 

A personal account must be created before a Monzo Business account, resulting in ownership of both account types. Monzo is a fully-fledged bank authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA). Up to £85,000 is protected by the Financial Services Compensation Scheme (FSCS) if eligible, similar to high street banks. 

Our Experience and Opinion 

Monzo is one of the better challenger banks in the UK, based on personal testing and feedback from long-term customers. 

Many appreciate the money pots, which help organise savings and auto-deduct taxes from incoming payments. Monzo excels at managing budgets, savings, and payments, though limited companies miss out on the loan and overdraft options available to sole traders. 

Many previous shortcomings, such as overdraft, loan, savings account, and payment acceptance, have been addressed in recent years. However, customer service still struggles to resolve issues promptly. 

The fast sign-up process and lack of monthly fees for the Lite account are attractive, considering the value of a real business bank account. The Pro account benefits from invoicing, accounting integration, and multi-user access for a modest £5 monthly fee. 

Pros 

  • Fast sign-up with no monthly fee (Lite plan) 
  • Fully licensed and regulated bank 
  • Debit card included 
  • Handy budgeting features 
  • Money pots for saving for different purposes 
  • 24/7 customer support 
  • Payment links and Tap to Pay options 

Cons 

  • No credit card option 
  • Loan and overdraft only for sole traders 
  • Low cash deposit limit 
  • International payments require a Wise account 
  • Complaints about service 

Who Can Open a Monzo Business Account? 

To open a Monzo Business account, you must be a limited company or sole trader based, registered, and a tax resident in the UK. Companies must have an active status on Companies House, an active director, and at least one person of significant control listed on Companies House. Corporate directors or persons of significant control are not permitted. 

Monzo does not accept partnerships, limited liability partnerships (LLP), limited companies by guarantee, public limited companies (PLC), charities, community interest companies (CIC), trusts, clubs, or other non-registered organisations. Businesses in high-risk industries, such as legally dubious or illegal trades, sales of precious jewellery, and financial services, are also not accepted. 

Costs and Fees 

It is free to open a Monzo Business account, and there is no minimum contract. 

Business Account Charges 

  • Account Creation: Free 
  • Monthly Fee: Lite plan – £0, Pro plan – £5 
  • Card Payments in GBP (anywhere): Free 
  • Card Payments in Other Currency (anywhere): Uses Mastercard’s wholesale rate with no added fees 
  • Bank Transfers (UK): Free 
  • ATM Withdrawals: In UK and EEA – Free, All other countries – First £200 during a 30-day period is free, above that costs 3% of the withdrawal amount 
  • Cash Deposits: £1 each 
  • Cheque Deposits: Free (via Freepost) 
  • Receiving Transfers from a Different Currency: 1% currency conversion fee 
  • Sending International Payments: Variable Wise transfer fees 

UK bank transfers are free, debit card payments worldwide incur no fees, and ATM withdrawals are free within the UK and EEA. Outside these areas, the first £200 withdrawn during a 30-day period is free, with a 3% fee for amounts above that. Cash deposits cost £1 each, deducted from the deposited amount. Cheques are free to process via Freepost, though some users prefer tracked postage for reassurance. 

International Payments 

Monzo’s current accounts include a bank account number, sort code, and IBAN for international transfers. Only GBP is stored, with foreign currency conversions subject to a 1% fee. International transfers are facilitated through Wise, a platform integrated into the Monzo app, offering low fees and reliable currency exchanges. 

Card, Cash, and Cheques 

Every Monzo Business account comes with a Debit Mastercard featuring chip, contactless, and swipe facilities. The card can be added to Apple Pay or Google Pay wallets. It is accepted wherever Mastercard is recognised, though occasional issues may arise in countries like Bulgaria, Portugal, and Cuba. 

Cash Withdrawal Limits 

  • Daily: £400 
  • Over 30 Days: £5,500 
  • Fee-free Outside EEA Over 30 Days: £200 

Cash deposits up to £300 can be made at any PayPoint in the UK for £1. Deposits take up to 10 minutes to appear in the account. The maximum deposit limit is £1,000 every six months, which may be inadequate for cash-heavy businesses. Cheques can be deposited via Freepost, with a processing time of 2-3 weeks. 

No Credit Card, But Overdraft and Loan Possible 

Monzo does not offer credit cards but provides loan and overdraft options for business accounts. Only eligible sole traders can apply for loans and overdrafts, with a maximum overdraft of £2,000. 

Monzo App 

The Monzo app, available for iPhone and Android, provides a smooth banking experience. Users can switch between personal and business accounts and utilise various features such as: 

  • Payments: Transfer money, set up standing orders or Direct Debits, and send money internationally via Wise. 
  • Saving Pots: Save money into labelled pots, separate from the main account balance. 
  • Budgeting: Set spending limits and track expenses. 
  • Manage Cards: Freeze and unfreeze cards, view PINs, and more. 
  • Information Access: Check account limits, fees, statements, and search for help. 

The Pro plan allows multiple users to manage the account and includes a Tax Pot for automatic tax deductions. 

Getting Paid Through Links, Invoices, and Contactless 

Monzo Business offers several ways to accept card payments: 

  • Payment Links: Send links via text, email, or social apps. 
  • QR Codes: Share or display QR codes for customers to scan and pay. 
  • Invoicing: Send email invoices with payment due dates. 
  • Tap to Pay: Accept contactless payments via NFC-enabled phones. 

Stripe handles card processing, with transaction fees ranging from 1.5%-3.25% + 20p. 

Accounting Integrations 

The Lite account does not support external app integrations. The Pro account syncs with FreeAgent, QuickBooks, and Xero, and allows auto-export of transactions and statements to Google Sheets. Pro users also receive special deals from select software partners. 

Customer Service and Reviews 

Monzo offers 24/7 support via in-app messaging, email, and phone. Email and chat support are slower, so calling is recommended. The Monzo community forum provides peer support. Reviews on TrustPilot are generally positive, but issues like frozen accounts and slow customer service responses are common complaints. 

Signing Up 

Sign up through the Monzo app, available on the App Store or Google Play. The process includes submitting personal and financial details, verifying your identity with a photo ID and video, and performing a soft credit check. Approval typically takes 5-60 minutes. After creating a personal account, you can add a Business account from the app menu. 

If switching from another bank, the Current Account Switch Service in the app simplifies the process by closing the old account, transferring funds, and redirecting payments to Monzo.