How To Save Money With A Mobile Bank
More and more professional investors, small businesses and even individuals publicly speak about classic old-school banks being a terrible way to keep money, let alone save and build wealth.
Today, the high-street banks barely offer any interest for savings accounts or deposits, the current accounts fees are high, pricing is opaque, the exchange rates are often ridiculous.
But not all banks are like that anymore.
The range of modern European online banks seems to combine the best of both worlds: transparency, speed and low cost of the e-commerce and online Saas companies, with safety and regulation of the classic banking world.
When comparing mobile banks vs. traditional banks, in top mobile banks, the monthly payments are eliminated completely or low, they charge nominal if any transaction fees, and use official mid-market exchange rate. And naturally, they have savings accounts and dedicated features, including interest rate in some cases, and much better than the old-school bank could possibly offer.
Another crucial undervalued step to saving money is budgeting and control over the finances, to avoid overspending in the first place. Since mobile banks operate through mobile apps, the control is especially easy, with handy budgeting features, such as goals, categorization, alerts and pop-up reports.
We’ve created a list of the top things to consider and an easy way to save money with a mobile bank.
Saving is first and foremost is about planning and prioritizing, meaning you should think through your expenses and targets, and allocate the budget or budgets in order to fulfill them.
With challenger banks, like Monese mobile bank, you get to have 24/7 full insight and control over your account and personal finances with the “Instabalance” feature that won’t allow you to overspend.
N26 mobile app enables users to look through all of their transactions to visually see where and when the money was spent. You get an instant breakdown of your spending. N26 uses artificial intelligence to automatically categorize your spendings or you can create your own personal hashtags, such as #weekend, #friends, #gift to organize your transactions.
A similar feature is available at Monzo, another mobile banking app: users get to set budgets and spending goals, as well as get a breakdown of the spending into 12 categories including groceries, shopping, etc.
Savings Accounts & Sub-Accounts:
Everyone knows it is a good idea to start saving, but not everyone knows how to start. Starting is actually the most difficult, and important thing to succeed in saving money, so mobile banks offer a lot of features designed to help you with that. Their main purpose is to automate the process in order for you to never forget again, and at the same time avoid overspending and keep on track.
Monese offers a dedicated saving feature called Pots which enables you to create a designated place to hold the money until you need it. These work as sub-accounts, and don’t generate interest, but help you separate from your day-to-day spending, enabling you to save more, faster. N26 Pots are great for saving as the money can’t be used for spending.
At N26, a similar feature is called Spaces and it allows you to create sub-accounts for different goals (e.g. savings, mortgage payments, holidays, etc.) You can add, remove or move money between your spaces. Spaces offer users to set a goal and transfer money into it regularly. You can do it manually every month, or set an automatic recurring payment and forget about it till the moment the goal is achieved. This way, you have a clear overview of your progress and can consistently put aside money for your holiday.
Most experts agree that the number 1 rule in saving is “Pay yourself first”, meaning set in advance an amount for recurrent saving, and set it apart from the rest of the income at the beginning of the month, before all other bills, credits, and responsibilities.
However, with the modern bank apps, you get another option: to keep doing that bit by bit on a daily basis
Revolut “Vaults” feature is also a way to work towards your financial goals.
You simply set up a goal and turn on the spare change feature. Every payment will round up to the nearest whole amount and the difference will be stored in your vault. Or you can set up a standard recurring payment straight into your vault.
Low Fees & Rates
In many cases, classic banks make huge markups on our transactions, take fees for literally any operation, and exchange currencies at enormous rates, making money on every our penny.
Thanks to very frugal operations costs, mobile banks often manage to waive a lot of fees completely or make them as cheap as possible for the users.
With Monese free debit card, for example, you can benefit from fee-free currency exchanges and interbank exchange rate, wherever you go abroad.
N26 also utilizes free payments in any currency, both online and at points of sale.
Monzo charges no FX fee for card spend in any currency, & you get the official Mastercard rate).
Top mobile banks offer lots of fee-free features and transactions, like ATM withdrawals and top-ups, free card payments abroad, no markup on exchange rate.
- Free cash withdrawals in EUR (limited for starter accounts, and unlimited for premium plans)
- Free debit card
- Free payments abroad, in any currency
- Unlimited travel insurance by Allianz (for premium accounts)
- Free contactless debit card
- Free ATM withdrawals ((limited for starter accounts, and unlimited for premium plans)
- Free local payments
If you like traveling, you know that air tickets and other travel expenses are costly, and build up quickly. However, if you have the right tool, the air miles and cashback from those purchases will build up as well, helping you to get back a worthy part of the amounts spent.
Monese has a special offer for its UK-resident clients. Their “Avios” Integration, allows you to collect Avios for retail and travel purchases and use them on flights, hotel bookings, activities.
On the other hand, N26 promises direct reinvestment with 0,1% cashback on all purchases made with your N26 Mastercard.
On top of saving by moving your funds from a classic old-school bank to a mobile bank in the long run, sometimes, you can even benefit and get money bonusу upon registration, or for engaging your friends to join.
Currently, Monese offers €15 back on your 1st card transaction and pays £10 bonuses for referring friends.
Today, the top Mobile Banks in Europe/UK are:
Monese, founded and based in the UK, is available for European Economic Area residents, offering a current account in EUR and GBP, money transfer services, contactless Mastercard, 100% deposit guarantee and more through a mobile app.
Read more about Monese in our Monese Review.
Berlin-based N26 offers transparent, flexible banking via its mobile and web apps. There’s no limit to the amount of money you can add to your N26 account and the first €100,000 of your balance is protected by the German Deposit Protection Scheme.
Monzo offers young UK customers a current bank account (including sort code, banking license, and deposit security) without a credit check. Currently, Monzo is available exclusively for UK residents aged 16 or above.
Revolut is a UK-based fintech company offering mobile-only banking services, including a prepaid debit card, currency and cryptocurrency exchange as well as peer-to-peer payments. The mobile app supports spending and ATM withdrawals in 120 currencies and money transfers in 29 currencies.
Read more about Revolut in our Revolut Review.
Saving money might be tricky if you pay your bank monthly fees, markups and high rates for every transaction, and barely get any interest for storing your money there.
European mobile banks like N26 and Monese offer handy dedicated features for savings, as well as charge the users much lower fees and rates.
Those are the main features you want to look at when trying to save money with a mobile bank:
- Budgeting Control
- Saving accounts and sub-accounts
- Change round-up
- Low fees & rates
- Free features
- Sign-up bonuses
Compare the best mobile banks to see the leading digital banking apps.