Are you considering Lloyds vs Monzo? Choosing the right bank for your business can have a profound effect on its day-to-day operations and long-term growth. In the UK, many businesses are increasingly torn between traditional banking giants like Lloyds and modern digital banks such as Monzo.
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This article delves into the features, pros, cons, fees, and standout features of both Lloyds and Monzo in order to provide a comprehensive comparison for your business banking decision.
Lloyds Bank vs Monzo
| Feature | Lloyds | Monzo |
|---|---|---|
| Online Banking | Comprehensive online banking portal for account management and payments. | Fully-digital platform, with every feature accessible via the app or web. |
| Mobile Banking | Full-featured mobile app with account management, payments, and more. | Mobile-first design with user-friendly app for all banking needs. |
| In-person Branch Access | Extensive branch network for in-person banking services. | Digital-only bank, no physical branches. |
| Overdraft Facility | Offers arranged and unarranged overdrafts subject to approval. | Provides overdraft facility with transparent pricing. |
| Instant Transactions Notifications | Not available, updates may delay. | Real-time notifications for all transactions. |
| Free International Payments | Charges apply for international payments. | Free international payments with competitive exchange rates. |
| Real-Time Spending Insights | Not available. | Provides detailed breakdown of expenses and budgeting tools. |
| Business Loans | Offers a range of business loans and credit options. | Does not currently offer business loans. |
| Fixed Term Deposits | Offers fixed-term deposits for businesses. | No fixed term deposits currently available. |
| Business Credit Cards | Variety of business credit cards available. | Does not currently offer business credit cards. |
| Multicurrency Accounts | Offers multicurrency accounts for international business. | Offers a multicurrency account feature via integration with Wise (formerly Transferwise). |
| 24/7 Customer Support | Provides 24/7 telephone banking and online support. | 24/7 support via in-app chat and email. |
| Direct Debits | Allows direct debit setup and management. | Provides direct debit setup and management. |
| Cash and Cheque Deposits | Allows deposits at branches and through Post Office. | Cash deposit via Post Office, cheque deposits via post. |
| Free Electronic Payments | Free electronic payments within the UK. | Free electronic payments within the UK. |
| Interest on Balance | No interest paid on business account balances. | Interest paid on certain account balances. |
| Budgeting Tools | Not available. | Advanced budgeting tools with real-time spending insights. |
| Savings Pots | Not available. | Allows creation of ‘Pots’ to set money aside for specific goals. |
| API Access | Not available. | Provides API access for custom integrations. |
| Accounting Software Integration | Not available. | Integrates with popular accounting software like Xero and FreeAgent. |
 | Wallester Business ✓ Virtual & Physical Cards ✓ No Setup Fees ✓ No Monthly Fee Pricing Trial period Contact | |
 | Revolut Business ✓ Business Current Account ✓ Award-Winning Mobile App ✓ Quick & Easy Application Process Pricing Trial period Contact | |
 | Tide Business Bank Accounts ✓ Free, Plus, or Pro Account ✓ iOS & Android Mobile App ✓ Upload & Auto-Match Receipts Pricing Trial period Contact | |
 | Card One Money ✓ No Credit Checks ✓ Simple Fees ✓ Up To 3.5% Cashback Pricing Trial period Contact | |
 | ANNA Money ✓ Apply In 10 Minutes ✓ Bookkeeping & Payroll Tools ✓ User-Friendly Mobile App Pricing Trial period Contact | |
 | HSBC Business Banking ✓ Business Current Account ✓ In-Branch, Online & App Banking ✓ FSCS Protected Pricing Trial period Contact | |
 | Metro Business Banking ✓ Business Current Account ✓ High Street Presence ✓ FSCS Protected Pricing Trial period Contact | |
 | Mettle Business Banking ✓ Business Bank Account ✓ Online & App ✓ Quick & Easy Application Process Pricing Trial period Contact | |
 | Monzo Business Banking ✓ Business Current Account ✓ Dedicated mobile app experience ✓ FSCS Protected Pricing Trial period Contact | |
 | Virgin Money ✓ Business M Account ✓ In-Store, Online & App Banking ✓ Insights & Forecasting Platform Pricing Trial period Contact |
Lloyds
Lloyds Bank, founded in 1765, is one of the largest retail banks in the UK. Its vast experience and extensive branch network, coupled with a broad array of financial services, make it a reliable choice for businesses of all sizes.
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Pros and cons
Pros
- Comprehensive Product Range: Offers an extensive array of financial products, including business loans and credit cards, that can cater to most business needs.
- Extensive Branch Network: Provides in-person banking and advice, especially useful for businesses that deal in cash and cheques.
- Established Reputation: Longstanding history and experience in the banking sector.
- Integrated Services: Facilitates access to wealth management and insurance services.
Cons
- Limited Tech Features: Lacks advanced features such as instant transactions notifications, real-time spending insights, and API access.
- Traditional Processes: Some banking processes may be slower and more bureaucratic.
- Limited Innovation: Less adaptive to new technologies and trends.
Table of fees and charges
| Service | Fees |
|---|---|
| Monthly Account Fee | £6.50 |
| Electronic Payments (In/Out) | Free |
| Cash Payments (In/Out) | 0.65% |
| Cheque Issued | 65p |
| Cheque Received | 27p |
| Overdraft Rate | 5.1% EAR |
Unique and standout features
Lloyds is well known for its Business Account for Start-ups, offering 18 months free day-to-day business banking.
Its relationship managers can provide valuable guidance and support for business development.
Also, its vast branch network allows more personalised in-person banking, which is crucial for some businesses.
Monzo
Monzo, established in 2015, is a digital-only challenger bank that provides an innovative approach to banking. Known for its user-friendly interface and advanced budgeting tools, it suits businesses that prefer digital operations.
Pros and cons
Pros
- Modern Features: Offers advanced features such as instant transaction notifications, real-time spending insights, and API access.
- Convenience: Allows 24/7 access to banking services from the app.
- Simple Fee Structure: Clear and transparent pricing.
- Innovative Tools: Provides budgeting and savings tools to manage your business finances.
Cons
- No Physical Branches: Lacks in-person services, making it less ideal for cash and cheque-heavy businesses.
- Limited Product Range: No options for business loans or credit cards.
- Younger Bank: Less established reputation and track record compared to traditional banks.
Table of fees and charges
| Service | Fees |
|---|---|
| Monthly Account Fee | £5.00 |
| Electronic Payments (In/Out) | Free |
| Cash Payments (In/Out) | £1 |
| Cheque Received | Free |
| Overdraft Rate | 19% EAR |
Unique and standout features
Monzo stands out with its instant notifications and real-time tracking of transactions.
Its business account seamlessly integrates with accounting tools like Xero and FreeAgent.
Also, Monzo provides “Pots” to segregate money for different business needs, adding a layer of organization to your finances.
Conclusion – Lloyds Bank vs Monzo
Your choice between Lloyds and Monzo largely depends on your business needs and preferences.
Lloyds offers comprehensive services and in-person banking, whereas Monzo excels in technology and simplicity.
Both have their strengths and drawbacks. It’s crucial to consider your business model, cash flow management, need for credit facilities, and preference for digital versus traditional banking services.
FAQ
Yes, both banks offer a business account switching service which makes the process easy and straightforward.
Yes, you can deposit cash into your Monzo account at any Post Office branch.
As of now, Lloyds does not offer direct integration with accounting software.
Monzo is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA). It is part of the Financial Services Compensation Scheme (FSCS), so any money you hold in a Monzo account is protected up to £85,000.
Currently, Monzo does not offer business loans. You may need to consider other banks or financial institutions for this service.
Lloyds does not currently offer interest on balances held in their business accounts.