Digital banks safety and reliability

Smvthephotoman

Hi. 

I have a tendency to overthink and worry too much and this has been happening again recently with regards to digital banks. 

I’ve had a NatWest account for decades but due to interest rates being so low I looked elsewhere and a friend of mine suggested Chase UK. I’ve had that account for a while with no issues but decided to open a Monzo account as well. It had several features that I really like and a decent savings rate.  However, I often read horror stories about random account closures and an inability to get money back for months if this happens and now I’m worried about it possibly happening to me. There’s even dedicated groups on Facebook about staying away from Monzo. Having said that, Monzo consistently comes out on top in independent polls so am I being overly worried? I guess I am because this sort of thing can happen with any bank. I mainly use it for daily spending but I also have my savings there and I use their flex card for splitting payments interest free. Something neither of the other banks I use currently offers. 

Thanks. 

Steve.   

wiseonesomeofthetime

I have been with Monzo since 2017. Perfectly happy with them.

Use it for personal banking. Don't use it for buying or selling. Don't keep paying random people. All should be fine.

I use mine as a hub, so generally income in, then disseminated between lots of accounts in my own name. All fine.

Remember though, ANY bank can freeze your account if you breach terms and conditions or have irregular movements of funds, not just a digital bank.

Rob5342

I've been with Monzo for four years and they've been very good and I've never had any problems. Their app is vastly better than anything that any of the old fashioned banks have been able to muster. 

The old adage about keeping all your eggs in one basket applies. Have a couple of current accounts as a minimum, spread your money between several accounts, carry a credit card and you should minimise the risk of any problems. 

Smvthephotoman

Thanks for your replies. I’m similar in that I have my wages paid into chase and then it automatically gets split up and sent over to my other accounts to top them up. So i do spread it about and not have all my eggs in one basket. At the moment I’ve been using Monzo as my main spending account so for using Apple Pay in shops, buy fuel etc. anything properly bit like thousands I would more than likely use NatWest. 

mta999

I have one 'main bank' account into which my salary gets paid and all my direct debits get paid out eg council tax, Gas electricity etc

I use that for absolutely nothing else other than to send the surplus money from my salary to another account with a different bank which I use for "spending'

The chances of my main account being suspended are therefore very low

From my spending account I send a little bit over to a third account which is really a slush account where for example the odd eBay sale money gets put or if anybody wants to pay me money that also goes there - in other words that is a slightly more 'dangerous' account. I also use that account if I want to pay anybody including people I know as you never know the status of their bank account. If that gets frozen the fallout is less problematic

[Deleted User]

Digital banks often rely on one of the big four. As with smaller banks on the high street. Metro Bank for example uses Barclays at various stages of payment processing etc. TSB uses HSBC for some parts etc etc. 

friolento

[Deleted User] said:

Digital banks often rely on one of the big four. As with smaller banks on the high street. Metro Bank for example uses Barclays at various stages of payment processing etc. TSB uses HSBC for some parts etc etc. 

relying on the big four isn’t a guarantee for uninterrupted service, as those who remember the 2012 Natwest debacle will attest.

Outages happen all the time, at all banks, including the big four. Data gathered by the Treasury Committee in March this year revealed that nine major UK banks and building societies experienced 803 hours of technology outages - equivalent to 33 days - between 2023 and early 2025. NatWest still figures prominently in those statistics. 

As always, don‘t put all your eggs into one basket. Have alternatives for emergencies- accounts at different banks, credit cards, even cash etc. Don’t keep money with providers which don’t have FSCS cover, and don’t go over the FSCS limit.

Smvthephotoman

wiseonesomeofthetime said:

I have been with Monzo since 2017. Perfectly happy with them.

Use it for personal banking. Don't use it for buying or selling. Don't keep paying random people. All should be fine.

I use mine as a hub, so generally income in, then disseminated between lots of accounts in my own name. All fine.

Remember though, ANY bank can freeze your account if you breach terms and conditions or have irregular movements of funds, not just a digital bank.

Out of interest, when you say buying and selling do you mean like eBay and things like that? I’m intending to use Monzo as a man spending account so contactless at tills etc. all my bills and important stuff is still wi the NatWest as it has been for or over two decades.