The challenger banking space is hotting up in the UK – with a number of new-age institutions now allowing you to access everyday banking services via your mobile phone.
One such provider is that of Starling Bank. The mobile-only bank allows you to open a UK current account in minutes, and then send and receive funds at the click of a button.
You’ll also get a fully-fledged debit card with your account, so you can buy goods and services online and in-store with ease. You can also use your Starling Bank debit card to withdraw cash from an ATM – both in the UK and abroad.
With that said, it’s important to assess whether or not a mobile-only bank account is going to be sufficient for your needs, so be sure to read our Starling Bank review prior to taking the plunge.
We cover the ins and outs of how the app works, what banking services it allows you to facilitate, and crucially – whether or not your money is safe.
What is Starling Bank?
- 1 What is Starling Bank?
- 2 Starling Bank Main Features
- 3 Starling Bank Debit Card
- 4 Funding Your Starling Bank Account
- 5 How Much Does Starling Cost?
- 6 Is my Money Safe at Starling Bank?
- 7 Earning Interest at Starling Bank
- 8 How to get Started at Starling Bank
- 9 Starling Bank Review: The Verdict?
- 10 Starling Bank
- 11 Pros
- 12 Cons
Launched in 2014, Starling Bank is a challenger banking app that aims to revolutionize the UK current account space. The overarching concept is that there is no longer a need to visit a physical branch to facilitate your everyday banking needs. Instead, everything can be completed at the click of a button.
Although Starling Bank falls short in certain areas, it does allow you to do most things. For example, you’ll be given a unique UK current account, meaning that you can send and send money with ease.
This also means that you can get your employer to pay your salary into your Starling Bank account. Much like a traditional current account, you will also be given a debit card. This allows you to withdraw cash from ATMs in the UK and abroad, as well as buy goods and services online and in-store.
In a similar nature to other challenger banking apps in the space. Starling makes it super easy to track your spending. At the forefront of this is the provider’s instant notification feature. This will send a notification to your phone every time you use your debit card.
Most importantly, Starling Banking is partnered with the Financial Services Compensation Scheme (FSCS). This means that were the bank to go under, your money would be protected up to the first £85,000. Finally, as of late 2019 Starling Bank claims to have over 1 million customers using its app.
Starling Bank Main Features
It is important for us to discuss the many features offered by Starling Bank in more detail so that you can make an informed decision on whether or not the app is right for you.
UK Current Account
As we noted above, all Starling Bank customers will be offered a unique current account. We say “unique”, as challenger banking apps from the past were known to use a single set of account details for all customers.
When funds were paid in, the provider would then need to manually forward them to your specific account – much like pre-paid card companies do. Nevertheless, this isn’t the case with Starling, so you will get your own current account number and sort code.
Naturally, this means that people can pay money into your account – including your employer.
Sending Money in the UK
When it comes to sending money, Starling Bank allows you to do this with ease via the mobile app. Much like any other UK-to-UK transfer, you will first need to set up the payee. This requires their full name, account number, and sort code.
Once you’ve done that, you simply need to enter the amount that you wish to send. As is a minimum expectation in 2020, Starling Bank transfers go through the Faster Payments Network, meaning the payment should be near-instant.
Sending Money Abroad
Starling Bank also allows you to send money abroad with ease. In fact, the process is significantly less cumbersome than using a traditional high street bank. For example, even to this day a number of well-known institutions require you to visit a physical branch to initiate an international transfer – and you’ll need to sign a bunch of forms too.
On the contrary, Starling Bank permits overseas transfers at the click of a button. Much like a domestic transfer, you’ll first need to enter the payment details of the person you are sending the funds to. After that, you’ll then get to choose from a local partner transfer or SWIFT.
Interestingly, Starling notes that SWIFT – which averages 1-3 working days, is the fastest option, so it remains to be seen how long a transfer takes when opting for a local partner. We cover the exchange rates and applicable fees a bit later on.
You’ll be pleased to know that Starling Bank now has the capacity to facilitate direct debits. The process works largely the same as setting this up with a traditional bank. For example, let’s say that you wish to set up a direct debit with your local gym.
Upon filling out the form, you simply need to provide your unique Starling Bank account details. Once the request is sent to Starling, they will take care of the rest.
Starling Bank Debit Card
As soon as you open your Starling Bank account, the provider will post a debit card to your registered address. The card is issued by MasterCard, so it operates much the same as any other debit card in the market.
For example, you’ll be able to:
- Withdraw cash from any ATM that supports MasterCard both in the UK and abroad
- Buy goods and services online
- Pay for things in-store
- Pay for things over the phone
Spending and Budgeting Tools
On top of the core banking services discussed above, Starling Bank also offers a number of innovative features that help you keep tabs on where your money is going.
Instant Transaction Notifications
Every time you use your Starling Bank debit card, you will receive a notification on your phone in real-time. For example, if you pay for a £2.80 cup of coffee in Starbucks, a breakdown of the transaction will pop-up on your mobile in seconds.
This is useful for a number of reasons. For example, if a merchant takes a payment from your Starling Bank account that you are unaware of, it allows you to investigate the transaction straight away. If an issue does arise, you can then contact the bank via your mobile app.
Similarly, if somebody used your debit card without your consent, you would again be made aware of this the moment the transaction is processed. This in itself acts as an extra layer of security.
Much like its industry counterparts, Starling Bank will automatically categorize your transactions. For example, buying a train ticket would likely sit within the remit of ‘travel’, and your Netflix subscription in the category of ‘entertainment’.
This is useful because it allows you to see exactly where your money is going each month. Crucially, if you find that you are spending too much cash on a specific category, this would allow you to act accordingly. If Starling Bank does not recognize a transaction – or it wants clarity, you can input the category at the click of a button.
Starling Bank is also useful if you are looking to create specific savings goals. For example, the app allows you to specify the purpose of the goal (such as an upcoming holiday), when the event is happening, and how much you need to put to one side.
Once you’ve inserted the fundamentals, the app will give you ongoing reports on whether or not you are on track. For example, the app might determine that you need to keep your spending down to £15 per day. If you go over this target, Starling will then let you know what you need to do to get back on track.
‘Settle Up’ Feature
Starling Bank offers an innovative feature called “settle up” that allows you to request money from friends and family. The way it works will depend on whether or not the person that owes you money has an account with Starling. If they do, the user will receive a notification. This will display the name of the person sending the request (you), and the amount being asked for.
If the user doesn’t have an account with Starling, then a link will be sent to their mobile phone via a text message. Upon clicking the link, the user will be prompted to enter their debit card details to settle the transaction!
Funding Your Starling Bank Account
One of the biggest concerns that users have with challenger banking apps is the process of actually getting money into the account. After all, Starling does not have any physical banking branches, as everything is facilitated via your mobile app.
With that said, the easiest way to get money into your current account is via a simple bank transfer. As long as the cash is coming from a UK bank account, the funds should be credited instantly.
If you still find yourself paying in physical cash, Starling has partnered with the Post Office. All you need to do is visit your nearest Post Office, and let the cashier know that you want to add funds to a Starling Bank account. You will then need to fill out a quick form which outlines the Starling account number. Once you hand over the cash, the Post Office will take care of the rest.
We should also note that Starling Bank even allows you to deposit funds with a cheque. In fact, you can do this electronically. You’ll first need to open your app and select ‘Add Money’, followed by ‘Cheque Deposit’. After that, you’ll simply need to take a clear photo of the cheque.
There are a couple of further points to note about cheque payments via Starling Account. Firstly, the maximum amount that you can deposit electronically is £500. Anything after that and you will need to post the cheque to Starling.
Secondly, it takes around two working days for the funds to clear, and Starling recommends keeping hold of the cheque until you receive a confirmation via the app. Thirdly, Starling limits you to four cheque payments per week.
How Much Does Starling Cost?
As great as all of the aforementioned features and benefits are, what we really like about Starling Bank is its fee structure.
Free Current Account
First and foremost, it will cost you nothing to open an account, nor will you be charged a monthly fee of any sort
Free ATM Withdrawals in the UK and Abroad
Moreover, you can withdraw cash from UK ATMs for free. In fact, you can make up to 6 withdrawals per day with your Starling debit card, as long as you do not surpass your daily limit of £300. Although this is industry standard in the UK banking space, it is the provider’s international ATM policy that stands out from the crowd.
This is because you can use your Starling Bank debit card to withdraw cash from ATMs abroad without paying any fees. Ordinarily, high street banks typically charge a variable fee, flat fee, or a combination of the two. This makes it extremely expensive to access cash when you’re on holiday.
On the contrary, Starling Bank charges you nothing at all. When it comes to the exchange rate, you will get the same MasterCard FX rate that Starling gets. Once again, high street banks are known to add 2-3% on top of the wholesale rate that they get, so it’s notable that Starling does not do this.
Note: In order to benefit from the MasterCard exchange rate when using your Starling Bank debit card abroad, make sure that you always pay in the local currency. If you select GBP when promoted, you will get charged more.
We should also note that although the likes of Revolut and Monzo also allow you to withdraw cash abroad for free, the providers limit you to around £200-£600 per month (depending on your account type). Starling Bank does not place any limits at all, which is great.
Sending Money Overseas
When it comes to sending money overseas from your Starling app, you can choose from a local payment partner or SWIFT. If opting for the latter, you will pay a flat fee of £5.50 per transfer. For those unaware, SWIFT transfers typically take 1-3 working days before they reach their destination.
If opting for a local payment partner, prices start from just 30p per transfer. Although this is cheap, Starling notes that transfer times take longer than SWIFT. Regardless of which option you go with, you will be charged a 0.4% currency conversion fee, which is also very competitive.
With that being said, challenger banking app competitor Monzo is arguably better in the international payments department, as it has partnered with TransferWise. This often results in same-day or next-day transfers at industry-leading rates.
Is my Money Safe at Starling Bank?
In terms of the safety of your funds, you should have no concerns in the case of Starling Bank. This is because the provider is partnered with the UK’s FSCS.
As noted earlier, this means that were the bank to collapse, your money would be protected up to the first £85,000. As such, just make sure that your balance does not exceed this figure, as anything above it will not be covered by the scheme.
You will also benefit from a number of in-app security controls, which includes:
Pin / Biometric Security
Every time you attempt to log in to your Starling Bank app, you will be required to enter your pin. Alternatively, you also have the option of setting up biometric identification. This can either be through your fingerprint or facial recognition. As such, even if you were to lose your phone – it would be extremely difficult for somebody to gain access to your account.
You also have the safety net of real-time debit card notifications. As covered earlier, this means that you will be notified the second somebody uses your car without your say-so.
Freeze Card and Transactions
Much like other challenging banks, Starling allows you to block your debit card within the app. This is ideal if you misplace your card, as it will give you ample time to search for it before reporting it as lost or stolen.
If you do find it, you simply need to unlock it from within the app.
This isn’t something offered by traditional high street banks, meaning you need to cancel the card as soon as you lose it – even it turns up later in the day! Similarly, Starling Bank allows you to put a block on outgoing transactions from within the app.
Earning Interest at Starling Bank
Starling Bank allows you to earn interest on the funds stored within your account. This stands at 0.5% on the first £2,000, and then 0.25% after that. Anything above the £85,000 threshold does not earn interest, albeit, this is above the FSCS protection limit, so you wouldn’t want to store more than that anyway.
Nevertheless, even at the higher rate of 0.5%, this is a tiny amount of interest to be earning on your money. However, it is important to remember that the likes of Revolut pay no interest at all, so at least you get something.
How to get Started at Starling Bank
Like the sound of Starling Bank and want to get an account open today? If so, below you will find a simple step-by-step guide on what you need to do.
Step 1: Download and Install the Starling Bank app
To get the ball rolling, you will need to download and install the Starling Bank mobile app – Enter your phone number here and they will text the app download to you.
Step 2: Open an Account
You will now need to open an account. As is the case with any banking application, you’ll need to provide some personal information.
This includes the basics – such as your full name, home address, nationality, date of birth, and contact details.
You’ll also need to confirm your mobile number via a text message.
Step 3: Verify Identity
To ensure Starling complies with UK anti-money laundering laws, you will now be asked to verify your identity. Unlike a traditional high street bank, there is no requirement to fill out countless forms. Instead, you simply need to take a photo of your passport.
After that, you will be asked to perform a quick video verification. You’ll need to repeat an on-screen sentence while holding your passport next to your face. Within a couple of minutes, the Starling system should be able to validate your identity.
Step 4: Source of Funds
Also in-line with anti-money laundering regulations, you will need to specify where your Starling account funds will be coming from. For example, this includes a monthly salary, investment income, or rental income.
Step 5: Fund Your Account
Once you have completed the verification process, you will then be given your unique Starling Bank current account details. This then allows you to fund your account by transferring money from an external bank account.
Step 6: Activate Debit Card
The final part of the registration process requires you to activate your debit card. It normally takes a few days for the card to arrive at your home address. Once it does, follow the instructions enclosed within the letter to activate your card.
Starling Bank Review: The Verdict?
In summary, there’s often very little to separate challenging banking apps. For example, Starling Bank, Revolut, and Monzo – the three main players in the UK space, all offer unique current accounts, debit cards, real-time notifications, transaction categorization, and industry-leading foreign exchange rates.
With that said, Starling does stand out in a couple of departments. For example, unlike its competitors Starling Bank allows you to make an unlimited amount of ATM withdrawals (within daily limits) without paying a fee. This is the case both in the UK and abroad. Furthermore, the bank is protected by the FSCS, which Revolut isn’t.
All in all, if you are looking for a seamless way to access everyday banking services, Starling Bank is well worth considering.