Monzo customers can now earn interest on their savings – but there's a catch

Everything you need to know about challenger banks

Digital lenders offer services such as current accounts and savings accounts, but instead of having a branch to pop into, you deal with them either through a website or an app on your phone.

Some apps will let you track your spending so you can keep an eye on your monthly budget.

What are their rates like

As they don’t have some of the overheads traditional banks do — and because they are trying to attract new business all the time — many app-only banks have been able to offer some great savings rates to tempt new customers. Make sure you compare the rates to those offered through more traditional banks, using a comparison site.

Are they safe to use? Check whether your chosen bank is regulated by the Financial Conduct Authority and whether it comes under the protection of the Financial Services Compensation Scheme.

The latter protects savings up to £85,000 if your bank goes bust.

 

Earlier this year, Monzo launched current accounts for 16-18 year olds.

They're not the only challenger bank out there though, here's our guide to all the different options.

If you bank with Atom, you can even get a mortgage with the challenger bank.


We pay for your stories! Do you have a story for The Sun Online Money team? Email us at [email protected] or call 0207 78 24516. Don't forget to join the Sun Money's Facebook group for the latest bargains and money-saving advice.


Source: Read Full Article