Monzo business account – what’s on offer?
Monzo, who has become a current account favorite over the past five years, has launched a new business offering with built-in accounting and free overseas spending.
There are two products to choose from: Business Lite, which comes with no monthly fees, or Business Pro which is one of the cheapest business bank accounts currently available, at Â£ 5 per month. Both are served by Mastercard.
The business account is designed for small businesses, although it is not currently available for charities or âhigh riskâ industries, including construction and civil engineering.
Challenger bank Monzo has launched two new accounts for small businesses
It is fully regulated by the Financial Conduct Authority and can only be opened through the Monzo app.
So what does it do, is the premium version worth it and could it be the perfect bank account for your small business?
What does the free account offer?
Customers opting for the Business Lite account, which has no monthly fees like rival challenger names Tide and Starling, will receive a debit card and will be able to use all standard account features, including the mobile app, web access and free instant UK bank transfers.
Money can also be saved in “jars” – the feature that has made the Monzo personal account so popular. Businesses can put money aside for costs like bills, without worrying about spending it on anything else.
Expenses can be broken down into categories and monthly budgets can be implemented to track payments.
Although this is an app-based account, it is also possible to pay by checks by posting them to Monzo, while cash deposits can be made at a PayPoint for an amount of Â£ 1.
Another favorite feature of the personal account is the free overseas spending, which is also available to business account users.
There is no charge for spending in stores all over the world, but there are some limits when it comes to withdrawing money.
ATM withdrawals are free in the European Economic Area. For countries outside the European Economic Area, withdrawals of up to Â£ 200 can be made for free every 30 days. Beyond that, there is a 3 percent charge.
The Monzo business card is available in a pebble gray or slate gray finish
What else do I get for Â£ 5 a month?
The Pro Business account costs Â£ 5 per month and gives customers all the features available from the Lite model along with a few extras to make it easier to manage their business finances.
An extension of the popular functionality of pots, and which is currently unique to Monzo, is the use of tax pots. Customers can set a percentage that will automatically be set aside for taxes each time they receive a payment.
There is a built-in accounting feature that allows customers to sync their business account with platforms like Xero, FreeAgent, and QuickBooks, greatly simplifying tax and accounting.
The Pro account also lets you add up to two other people to the app, which is handy for limited liability company accounts and helps manage finances with everyone able to keep track of what’s going on.
With the Monzo Pro Business account, which costs Â£ 5 per month, customers get all the features listed under the Lite model, as well as other unique features
Monzo is currently working on implementing different authorization levels for users with multiple cardholders, including read-only access and payment approvals.
And it’s no good that Monzo is already developing other features for its business customers following feedback from early adopters, including the ability to run more than one business, make bulk payments, and send. and receive money abroad.
Is this the right account for my business?
The Monzo business account is not yet available to everyone and may never be an option for some businesses.
People who can apply for an account include independent traders and those who operate a public limited company and who are based in the UK.
Public limited companies must also meet the following criteria to be eligible:
- Have an active status, an active corporate director and at least one significant controlling person listed on Companies House
- Not have legal persons exercising significant control or directors of companies. (This means that you will not be eligible if a company, business or organization is appointed a director of your company)
- Earn money primarily by selling goods and / or providing services, rather than with interest or investment income
- Be tax resident in the UK and no other country
However, whether or not customers meet the above criteria, there are some areas that are not supported by the Monzo business account as they are considered âhigher riskâ and would require additional checks and controls.
This includes foreign exchange businesses, including virtual currencies, and money-saving businesses, construction and civil engineering, mining and quarrying, defense and weapons and Following.
Meanwhile, some types of businesses also cannot apply for a Monzo business account at this time. This includes partnerships (including limited liability companies), companies limited by guarantee, charities, community benefit companies and trusts and funds, among others.
Monzo has said he may offer accounts to some of these industries or groups in the future, but that is not in his plans at this time.
Businesses that handle a lot of money should also take this into account before applying for this account as there are cash payment limits of Â£ 300 at one time and up to Â£ 1000 every six months.
Bank transfers are unlimited and free of charge.
What are my other options?
Options similar to the Monzo Business Lite account include accounts from Starling, Tide, and NatWest’s latest business, Mettle. Like Monzo Business Lite, all three accounts are free but vary in what customers can get.
For example, Tide and Mettle don’t allow check deposits while Starling only offers check deposits up to Â£ 500 when using mobile check imaging.
Larger amounts can be deposited by mailing them free of charge although there is a limit of ten checks per week.
There is no Financial Services Compensation Scheme deposit protection with Tide and Mettle while Starling and Monzo are both covered.
|Santander||HSBC||NatWest||Barclays||Bank of Yorkshire/Clydesdale Bank||Metro Bank||* Bank of the Starling||*Tide||Cooperative||Courage|
|Monthly account fees||Â£ 7.50 – Â£ 40 depending on monthly cash deposit withdrawal limits||Â£ 5.50||Â£ 5 minimum||Â£ 6 for the “Mixed payments” plan and Â£ 6.50 for the “Electronic payments” plan||Â£ 5||Â£ 0 for balance> Â£ 5,000 Â£ 5 for balances less than Â£ 5,000.||Â£ 0||Â£ 0||Â£ 5||Â£ 0|
|Cash and check deposits||Yes||Yes||Yes||Yes||Yes||Yes||Yes||Yes cash, no checks||Yes||Yes cash, no checks|
|Discovered available||Yes||Yes||Yes||Yes||Yes||Yes||Yes||N / A||Yes||N / A|
|FSCS Deposit protection||Yes||Yes||Yes||Yes||Yes||Yes||Yes||No||Yes||No|
|UK ATM fees||Included in the monthly fee||Separate charge||Separate charge||Included in the monthly fee||Included in the monthly fee||Yes||N / A||N / A||No||No|
|* The account is available on the company’s website and mobile app.|
The merchant banking offerings of traditional banks like Santander, HSBC and Barclays all charge a monthly fee like the Monzo Business Pro account, although Monzo is the cheapest at Â£ 5 per month.
It should be noted that these banks offer overdraft facilities, which Monzo does not – yet.
Customers can also benefit from going to a branch or calling someone for help rather than just having access to help through the app or website, as is the case. with Monzo.
However, Monzo’s support team is available 24/7 through their live chat service.
Essential for small businesses
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