Challenger banks, also known as digital or neobanks, continue to disrupt the UK’s banking market.
Targeting younger and tech-savvy customers, they’re rewriting the finance industry with a focus on convenience, innovation, customer service and branding.
So which is the best challenger bank to choose for your business?
We will look at key features such as fees, interest rates, account options, and customer service, as well as the overall financial performance of each bank.
NB: we have not included Monese in this list, as they’re not currently offering new business accounts. We have also not included any of the e-money accounts we cover elsewhere on Business Expert, as these are distinct offerings.
Find the Top Challenger, Fintech & Digital banks in the UK
| Feature | Monzo | Cashplus | Starling | Revolut | Tide |
|---|---|---|---|---|---|
| Monthly Fee | £5 | £0 | £0 | £0 | £0 |
| 24/7 customer support | ✔ | X | ✔ | ✔ | ✔ |
| Review Rating (TrustPilot) | 4.4 | 4.0 | 4.3 | 4.3 | 4.3 |
| Savings accounts | ✔ | X | ✔ | X | X |
| Credit cards | X | ✔ | X | X | X |
| No Foreign transaction fees | ✔ | 2.99% | ✔ | ✔ | ✔ |
| Virtual and physical debit card | ✔ | ✔ | ✔ | ✔ | ✔ |
| Instant account set up | ✔ | X | ✔ | ✔ | ✔ |
| Multi-currency accounts | X | X | ✔ | ✔ | X |
| Free ATM withdrawals | ✔ | X | ✔ | 2% | £1 |
| Overdraft | X | ✔ | X | X | X |
| Instant notifications | ✔ | ✔ | ✔ | ✔ | ✔ |
| Mobile check deposit | ✔ | X | ✔ | X | X |
| Apple Pay and Google Pay integration | ✔ | X | ✔ | ✔ | ✔ |
| See Deal | See Deal | See Deal | See Deal | See Deal |
What is a Challenger Bank?
A challenger bank is a financial institution that aims to compete with established traditional banks by offering innovative products and services, often through digital technology. These banks typically focus on specific market segments or niches and may offer mobile banking, digital-only accounts, and peer-to-peer lending services.
A challenger bank is an institution with (or who intends to apply for) a banking licence. For this reason, we haven’t included e-money accounts in this list. We also don’t consider subsidiaries of established parent banks, such as Mettle, as challengers.
They are called a ‘challenger’ because they are challenging the dominance of the existing leaders, which, in the UK, are the big four: Barclays, Lloyds Banking Group (Halifax, Lloyds Bank and Bank of Scotland), HSBC and the NatWest Group.
Why Choose a Challenger Bank?
There are several reasons why you may choose a challenger bank over a traditional high street bank:
- Innovation: Challenger banks often use technology to offer a more seamless and convenient banking experience, such as mobile-only banking apps and digital-only accounts.
- Faster Sign Up – Many challenger banks focus on the fastest onboarding process possible, even issuing virtual cards that can be used to make payments before the real one arrives.
- Fees – Challenger banks may have lower fees than traditional banks.
- Customer service: Challenger banks often have a more direct and personal approach to customer service, and many offer extended hours of support through digital channels.
- Niche services: Some challenger banks focus on specific market segments or niches, such as poor credit or small businesses, and may offer specialized products and services tailored to those groups.
- Online banking experience: Challenger banks focus more on the online banking experience, making it easier and more efficient for customers.
Challenger Bank Reviews
Compare the pros and cons of each challenger bank and our verdict as to which you should choose.
You can also click through our more in-depth review pages if you want a deeper dive into the individual business accounts. We will endeavour to keep this information up to date with what the banks currently offer, but you should always make sure you do your own research and read any fine print before signing up for an account.
Tide
Tide partners with Clearbank to offer bank accounts, allowing existing high-street bank account holders to connect their accounts to its APP.
Currently serving 400k SMEs, about 7% of the market, Tide’s outstanding reviews, class-leading APP, and solid customer service make it a great choice.
Pros
- No Credit Check Needed
- 24/7 Support, including free legal advice
- Free limited company registration
- Dedicated Account Manager on paid accounts
- Well-designed App
- Quick Set Up
- Use the Tide Mastercard abroad with no commissions or fees deducted (other than Mastercard’s own exchange rate)
- Tide accounts can opt for invoice protection with Hokodo for 90% of the invoice amount
Cons
- £1 charge for ATM withdrawals
- Tide doesn’t accept cheques
- No overdraft facility
- International transfers are limited to EEA countries
- international transfers cost 0.50% of the total transaction amount
Our Verdict
Alongside Starling, Tide gets our vote for the top challenger bank account. Its wide array of useful features, smooth user experience, and excellent customer service make it hard to beat.
- One of the best Apps in the sector
- No Monthly or Annual Fees
- Easy Invoice Creation Functionality
- ATM withdrawals cost £1
- 20p charge for transfers between accounts
- 3% charge for cash deposits at Paypoints
Eligibility Criteria
- You must be at least 18 years old.
- You must have a UK residential address.
- You must be the director of an active company registered with UK Companies House or a sole trader/freelancer registered with HMRC.
- Charities/trusts and other high-risk industries are not eligible.
- Businesses operating from outside the UK are excluded.
FSCS Protection: Yes, Tide is FSCS protected.
Trustpilot Score: 19,375 Reviews with an average rating of 4.1/5
- One of the best Apps in the sector
- 2 FREE Expense Cards for your co-workers
- Member discounts
- Post Office Deposits Cost £1
- 20p charge for transfers between accounts
- 3% charge for cash deposits at Paypoints
Eligibility Criteria
You must be 18 years or over, a UK resident, and have a valid UK phone number.
Monzo
Monzo is a digital-only challenger bank founded in 2015. It offers personal and business bank accounts, additional services like budgeting tools, and fee-free foreign transactions. In 2022, it won Best Business Banking Provider at the British Bank Awards.
Pros:
- FSCS Protection and FCA Regulated
- Monzo has a switching service meaning they can migrate your old account for you
- 24/7 Customer Service
- Well designed APP
- Multi-user access
- Useful tools for categorizing transactions and setting savings goals.
- Fee-free foreign transactions, making it an excellent option for travellers.
Cons
- £1 cost to pay in cash via a Paypoint
- No physical branches
- Deposit a maximum of £1000 every six months
- You have to pay a Wise transfer fee for international payments
- No credit card or overdrafts
- Cash deposits are limited to £300 per day and £1,000 every 6 months
Our Verdict
Monzo is a solid option that deserves its place in the top ranks of challenger banks. It offers two business accounts, Monzo Lite and Monzo Pro, plus 24/7 support. Rated ‘excellent’ on Trustpilot, the Monzo Pro account offers better value for money, and the switching service is very handy.
It has slightly fewer accountancy software integrations than Tide, and you can only get two team cards instead of 35 for Tide. It also chose not to sign up for the voluntary Authorised Push Payment Scam Code.
Cashplus
Cashplus is a fully licensed and regulated UK-based digital bank that offers personal and business bank accounts, credit-building services, and, shortly, a business credit card that enables direct bank-to-bank faster payments.
Pros
- Credit builder feature allows businesses to improve a credit score over time
- 4-minute application process
- No credit check needed
- Potential £2000 overdraft upon approval
Cons
- Can’t pay in Cheques
- 0.5% fee for depositing cash at Post Office
- 2.99% FX fees
- £2 ATM fees
Our Verdict
Cashplus is a good option for businesses looking for an alternative to traditional banking and would benefit from credit-building services. In particular, its offer of an overdraft sets it apart from any other challenger account on the market, although not all account holders will qualify for this.
It has a slightly higher ATM fee of £2, as opposed to £1 for Tide, and you’ll pay a higher fee of 2.99% for spending abroad.
Read our Full Cashplus Business Review
Starling Bank
- Free card issuing
- Affordable monthly fee
- Business credit builder add-On
- 0.5% cash deposit fee
- No physical branches
Eligibility Criteria
- You must be at least 18 years old.
- You must be a sole trader, director of a limited company, a charity or a partnership based in the UK.
- Sole traders cannot be registered at UK Companies House. Limited companies must have no more than 4 PSCs registered with Companies House.
- You must have a UK residential address.
- High-risk organisations are not eligible.
- Businesses operating from outside the UK are excluded.
FSCS Protection: Yes, Cashplus is FSCS Protected
Trustpilot Score: 10,291 Reviews with an average rating of 3.6/5
- Business Credit Builder Add-On
- Overdrafts of up to 2k
- Pay in via any Post Office
- £9 monthly fee for Business Extra Account
- £2 ATM Use
Eligibility Criteria
Your business must based in the UK. You’ll need verified ID such as passport or driving licence, the registration number of your company at Companies House and proof of business address.
Most reviews agree that Starling offers a very competitive and well-run business account. It’s focused on simplicity and ease of use, and they claim someone signs up every 39 seconds. They received a banking license in 2016 and now boast over 2 million opened accounts.
Pros
- Excellent reviews
- Fully regulated and FSCS protected
- In-App cheque deposit
- Switching facility
- 24/7 support
Cons
- No physical branches
- 0.7% fee (£3 minimum fee) for cash deposit at Post Office
- Account access is limited to directors of the company
- Not the best for international transfers
Our Verdict
Starling has a lot to offer as a business account, although companies operating internationally may wish to seek an account more focused on a foreign exchange like Revolut. It won Best British Bank at the British Bank Awards from 2018 to 2021, meaning it’s undoubtedly one of the best accounts out there.
Revolut
Pros
- Send and receive money in 30+ currencies
- Crypto friendly
- No transfer approval is needed for paid accounts
- 24/7 Support
- Business API integrations
Pros
- Send and receive money in 30+ currencies
- Crypto friendly
- No transfer approval is needed for paid accounts
- 24/7 Support
- Business API integrations
- Easy integration with Ecommerce via Apps and Plugins
- Send and receive money from 200 countries
- Block cards or set accounting limits with a tap
- Available for Limited Companies Only
- Accounts do not support cash or cheque deposit
- No physical branches
Eligibility Criteria
- You must be at least 18 years old.
- Your business must have a physical presence in the EEA and Switzerland.
- You must be a sole trader, freelancer, limited company, partnership, LLP or PLC.
- Charities/trusts and other high-risk organisations are not eligible.
- Businesses operating from outside the supported countries are excluded.
FSCS Protection: No, Revolut is not protected by the FSCS.
Trustpilot Score: 151,826 reviews with an average rating of 4.2/5
- 100 free local transfers per month
- £10k of international transfers at the interbank rate each month
- complimentary metal card
- Limited number of free international transfers
- Limited to 10 free team member onboards
- No physical branches
Eligibility Criteria
- You must be at least 18 years old.
- Your business must have a physical presence in the EEA and Switzerland.
- You must be a sole trader, freelancer, limited company, partnership, LLP or PLC.
- Charities/trusts and other high-risk organisations are not eligible.
- Businesses operating from outside the supported countries are excluded.
FSCS Protection: No, Revolut is not protected by the FSCS.
Trustpilot Score: 151,826 reviews with an average rating of 4.2/5
What is the Best Challenger Bank in the UK?
Tide bank is our top pick as the best challenger bank for most freelancers and small businesses. If you’re working internationally and need currency exchange, Revolut gets our vote.
Challenger Bank FAQs
Are challenger banks safe?
All the banks are in this list are protected by the Financial Services Compensation Scheme (FSCS). meaning that if they go bust, account holders are covered for up to £85,000. That said, challenger banks are, by definition, considered less secure than some more traditional institutions. Areas of concern may include Customer risk assessments (CRA), Customer Due Diligence (CDD), Inadequate transaction monitoring alerts
What are the key benefits of using a challenger bank for my business?
Challenger banks often offer lower fees, higher interest rates and more flexibility compared to traditional banks. They also tend to have more modern digital platforms that make banking more convenient.
Can I deposit and withdraw cash with a challenger bank?
It depends on the specific challenger bank you choose. Some banks offer cash deposit and withdrawal options, while others do not. Be sure to check with the bank to find out what options are available.
Can I use a challenger bank to make international payments?
Many challenger banks, such as Revolut and Monzo, offer international money transfer services, but it is best to check with the bank to find out exactly what options are available and any fees that might be associated with them.
