With interest of 3.25% AER paid on credit balances up to £5,000, no fees for spending abroad, and clever digital pots to organise your spending, this current account from Starling Bank is one to consider if you’re looking to switch.
Representative example
The representative APR example gives you an estimate of how much it might cost if you borrowed a certain amount of money. This helps you compare products and provides a guide on how much carrying a balance could cost. Your personal offer may vary from the representative APR example.
If you use an arranged overdraft of £1,200, you’ll be charged a representative rate of 15% APR (variable).
Pros
- 3.25% AER on balances up to £5,000
- No monthly fee
- No minimum monthly deposit
Cons
- Interest of 15% to 35% EAR (variable) on arranged overdrafts
- No cash switching offer
- No cashback, perks or discounts
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What is Starling Bank?
Starling is an app-based digital bank. It was set up in 2014 and got its banking licence two years later in 2016. It was established as a ‘challenger’ bank to disrupt the traditional high street bank model, and focuses on being at the forefront of banking innovation.
Starling was one of the first digital banks to join the Current Account Switching Service (CASS), and also one of the first to offer Apple Pay within its mobile banking app.
How does Starling Bank work?
To open a Starling current account, you’ll first need to download the bank’s app onto your smartphone or other device.
You’ll need proof of your ID (photo ID such as a passport or driving licence) and your home address (a recent bank statement, council tax or utility bill, for example). You’ll have to take a photo and upload your documents in the app, plus you’ll also have to take a video selfie to confirm your identity.
Starling then carries out a ‘soft’ credit check on you, which involves a request for information (on your credit file) from the main credit reference agencies. You might see this check on your credit file, but it won’t be visible to other financial services companies or affect your credit score.
Once you’ve applied for the bank account by following the steps, Starling will let you know that your account is up and running. You’ll receive a contactless Mastercard debit card in the post (and separate PIN), but you can use your account immediately to receive payments.
You can also connect to Apple Pay or Google Pay for online and contactless payments, even before your physical card arrives.
Key Features
- 3.25% interest on in-credit balances up to £5,000
- No monthly fee
- Arranged overdraft facility charged at 15%, 25% or 35% (subject to credit status)
- Fee-free purchases and withdrawals abroad
- Online and in-app banking
- Recycled plastic debit card (90% recycled plastic).
Will I be eligible?
To qualify for a Starling current account, you need to be aged over 16, and live at a UK address. You do not need to be a UK tax resident. This means there is no requirement for you to spend at least 183 days in the UK out of the tax year. Applications from people of all nationalities are considered.
What more should I know?
Overdrafts are available with the account, but you will need to apply and must be aged over 18. You will be charged at either 15%, 25% or 35% EAR (variable) based on your financial situation, including your credit history.
Overdraft interest charges amounting to less than 10p for the month are waived. If you go over your arranged overdraft limit, there are no additional charges, although the bank may block payments.
For account holders with children aged six to 16, it offers the Starling Kite feature. This allows you to allocate a ‘Space’ to your child that you can top up virtually with money. Your child can access the ‘Space’ using a debit card.
You can adjust the daily spending limit on your child’s ‘Space’, choose whether they can withdraw cash or make online purchases, and receive notifications when they spend.
If you need someone else, such as a relative, friend, neighbour or childminder to make purchases for you, Starling can provide them with a ‘Connected card’. This will give them access to a designated ‘Space’, separate to your main account. It will be capped at a maximum balance of £200.
It’s also possible to open a joint account with Starling.
Is a Starling current account right for me?
First, you will need to be comfortable opening and operating your bank account entirely digitally. If this is the case, and you tend to carry a credit balance, the 3.25% AER interest (up to £5,000) could also be appealing.
If you thrive on organisation and budgeting, Starling’s virtual ‘Spaces’ where you can compartmentalise money away from your main account, could also be useful.
If you tend to be overdrawn, it’s reassuring to know there is one set rate of interest to pay and no additional charges applied. However, if you are choosing an account based on its overdraft facility alone, there may be better alternatives.
What are my alternatives?
If you’re looking for an innovative app-based bank account there are a number of other options to consider before taking the plunge and switching.
Competitors to Starling Bank that offer similar features on their current account include Monzo and Chase, for example. Both accounts also come with their own pros and cons though, so compare each thoroughly find the one that best suits your needs.
While Starling Bank isn’t offering a cash incentive for customers to switch to its bank account, many providers do have current account switch offers, including HSBC, NatWest and First Direct.
Some accounts may not suit your needs however, while some may charge a monthly or annual fee, so be wary about switching just for the cash incentive. Some switch incentive deals will also require you to stay with the account for a minimum time to receive the cash reward.
Frequently Asked Questions
Can I use my Starling Bank debit card abroad?
Making purchases with your Starling Bank card when you’re overseas is free of foreign exchange and ATM withdrawal fees.
However, some cash machines impose their own charges that are not associated with Starling Bank.
Could Starling Bank replace my existing bank account?
Starling Bank offers a full current account with a Mastercard debit card, overdraft and all the functionality of a standard bank account.
You can deposit funds (in Post Office branches), receive payments into the account (such as your salary), make cash withdrawals and set up automated payments such as direct debits and standing orders.
It means you can switch from your existing bank account and use Starling Bank as your main current account. Starling is part of the Current Account Switching Service (CASS) so switching your account should be quick and straightforward.
The only difference to other banks might be that Starling Bank doesn’t have any branches or high street presence. It is important to bear this in mind if you are considering switching your account to Starling.
Is Starling Bank safe to use?
Starling is fully authorised and regulated as a bank by the Financial Conduct Authority (FCA).
Customers have full protection for cash held with Starling (for example, in their current account and in savings) up to a total of £85,000 per person under the Financial Service Compensation Scheme (FSCS). This protection is provided in the event Starling Bank goes bust.
In terms of security when using Starling, the bank has a number of measures in place to protect customer accounts from fraud.
It uses biometric identification (face ID for example), card controls in the app, including freezing an account and setting personalised spending limits, and it also sends real-time notifications for transactions, such as payments out of an account.
What is the minimum age requirement to open a Starling Bank account?
You can apply for a Starling Bank current account from the age of 16. But you’ll need to be 18 or over to apply for an overdraft facility.
How long does it take to open a Starling Bank account?
The account opening process should be quick based on the statement on Starling Bank’s website: “We work applications as quickly as possible and in most cases this is less than 24 hours”.
