Tide vs Monzo: Comparing business bank accounts

Tide vs Monzo: Comparing business bank accounts

The banking revolution

Before the global financial crash of 2008, the business banking industry had been dominated by the ‘big four’ High Street banks of HSBC, Barclays, NatWest, and Lloyds Banking Group for decades. 2008’s credit crunch turned out to be the catalyst for change in more ways than one.

After spending £500 billion on a rescue package to help shore up the UK banking system and restore both market and consumer confidence, both regulators and the government were keen to implement measures to ensure that such a crisis could never arise again. A cornerstone of this strategy was to encourage more competition in the banking sector with the aim of reducing the dominance of the big banks in the market. Alongside this, entrepreneurs were able to open up opportunities to bring a digital revolution to the banking space. Not only did this bring growth in new technology, but also a move away from the traditional High Street banking model. It also gave rise to the Challenger Banks.

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Challenger banks defined

The challengers are new, smaller banks created to transform the banking space and ‘challenge’ the main High Street banks. They differ from the traditional banks by bringing new digital, financial practices. Many of them have rejected the traditional high street branch model, preferring instead to operate through online-only banking or a mobile app. Although not regulated as a bank, Tide is regulated by the FCA. Our ClearBank-provided bank accounts all have FSCS protection. We are also one of the leading providers of digital business banking services in the UK.

In this article, we will feature and explain the various products and services on offer from both Tide and Monzo.

Table of contents

Tide vs Monzo: the similarities

Feature Tide Monzo
Cash deposits ✔️ ✔️
Mobile and online banking ✔️ ✔️
Freeze/unfreeze card in the app ✔️ ✔️
Instant payment notifications ✔️ ✔️
Accountancy software integration ✔️ ✔️
Scheduled payments ✔️ ✔️
Apple Pay ✔️ ✔️
information correct as of September 2021

When it comes to small business accounts, there’s now a wide choice among the traditional banks, as well as with the challengers. If you’re a sole trader, freelancer, or have set up your own limited company, both Tide and Monzo cater for you. Established in 2015, Tide is one of the first digital-only finance platforms to provide bank accounts for small businesses. Monzo added a business-focused product to their portfolio in early 2020.

Both Tide and Monzo offer business bank accounts that can be opened and accessed using a smartphone app. With all accounts, you receive a payment card and there are no charges for payments made by debit card between Tide or Monzo accounts. They also both offer easy integration with a host of popular accounting software. With Monzo, this is specifically QuickBooks, Xero, or Freeagent, whereas Tide accounts will integrate with a wider range of accounting software, including Sage. Another similarity is that neither Monzo nor Tide has a branch network, preferring instead to use an online banking model. However, there are also significant differences between the two, and throughout this article, we will explore the features that set them apart.

Tide vs Monzo: how much do accounts cost?

Feature Tide Monzo
Monthly account charge Free Free
Transfer costs Free between Tide accounts Free between Monzo accounts
Fee for cash deposits £2.50 for deposits up to £500
or 0.5% of cash amount for deposits over £500
(at Post Offices)
3% (at PayPoints)
£1 (at PayPoints) (max payment of £300 in one go and up to £1000 every 6 months)

Fee for payments in or out 20p Free (UK only)
Fee for Direct Debits 20p each Free
Fee for replacement cards Free 2 free per year, then £5 each thereafter
information correct as of September 2021

Firstly, it’s free to open a Tide account and there’s no monthly fee for the entry-level business account. Secondly, there are also no transaction fees to transfer money between Tide accounts. Transfers in or out of your account cost 20p. International transfers will be coming soon for Tide accounts.

As with Tide, it’s also free to open a Monzo account and there are no monthly charges if you open a Monzo Lite account. Monzo allows you to move money easily with instant, free bank transfers in the UK. For those travelling abroad, neither Tide nor Monzo makes any charge for overseas spending.

Tide vs Monzo: Account tiers and paid plans

Monzo Business Pro

Both Tide and Monzo offer paid accounts that give access to extra features to enhance your account. For £5 per month, Monzo offers its Business Pro account. This provides a host of features within the Monzo banking app, including the facility to choose a percentage of any payments to be automatically set aside to use for tax payments, known as ‘Tax Pots’. The Business Pro account also provides a business debit card, multi-user access for limited companies, and integrated accounting with Xero, FreeAgent, or QuickBooks. You are also offered six months free use of accountancy software Xero. Other features include the ability to automatically label your expenses and add receipts to your payments. All Monzo accounts are FSCS-protected up to £85,000.

Tide Invoice Assistant

Within the Tide free account, the feature to automatically label your transactions comes for free. There’s also no charge to upload receipts and create and send invoices electronically. For owners of limited companies or sole traders, however, for £10 + VAT per month, you can choose to upgrade to Tide’s Invoice Assistant bundle. This will give you automated matching and payment of invoices, as well as automatic chasing of invoices. You’ll also benefit from two free Direct Debits per month too.

Tide Plus and Cashback

As well as the free standard account, which is ideal for those just starting out, Tide also offers upgrade options to support you as your business grows. For £9.99 per month + VAT, Tide Plus provides telephone support, a 24/7 legal helpline as well as up to 20 free transfers in and out. You also get a free company expense card, which you can use to manage your business purchases. At £49.99 per month + VAT, Tide Cashback is just the ticket for those scaling their businesses or running larger companies. As well as a dedicated account manager, you will also receive 150 free transfers per month, 0.5% cashback on all spend on your Tide card, as well as 3 company expense cards for you and your team.

How easy is it to pay in cash?

If you need to deposit cash, then Tide offers the option of doing this at Post Offices for a nominal charge of £2.50 of deposits up to £500 or 0.5% of the cash amount for deposits over £500. Monzo doesn’t offer this service with Post Offices, however, you can deposit cash at PayPoints for a fee of £1 per deposit. You can also use PayPoints with a Tide account with a fee of 3%.

How easy is it to open a business bank account with Tide vs Monzo?

When it comes to deciding to open a bank account for your business, both Tide and Monzo have made the process pretty seamless with no long forms to fill in.

Feature Tide Monzo
Apply through the app ✔️ ✔️
Quick application ✔️ ✔️
Credit check
Card delivery fee Free Free
Card delivery timescale 2-5 working days 2-5 working days
Replacement card fee Free 2 free, then £5 each
information correct as of September 2021

Tide account sign-up

Before you apply to open a business bank account with Tide, you’ll first need to download the Tide app from either the App Store or Google Play Store. You will then need to provide a form of ID: either a driving licence, passport, or European National ID card. You may also be asked to provide evidence that your business is already up and running, such as HMRC registration, evidence of your qualifications, or signed contracts. The Tide pledge is that 53% of new business customers open their accounts in under 10 minutes, 70% in under 60 minutes, and 81% within 48 hours. There will be no hard credit check and your accompanying bank card will be supplied for free. If you lose your card, there’s no fee to order a replacement.

Monzo account sign-up

As with Tide, the application process for a Monzo business account is very straightforward. You can apply directly from your phone, as soon as you’ve downloaded the Monzo app from Google Play Store or App Store. To open a Monzo account, you need to be at least 16 years old and a UK resident. In terms of ID, a valid passport, driving licence, National ID card, or biometric residence permit are all acceptable. You will need a smartphone with a camera so you can photograph your ID. Monzo maintains that the account sign-up process can take just 10 minutes. As with Tide, no hard credit is conducted and you’ll receive a free bank card within 2 to 5 working days by post once your application is accepted.

Tide vs Monzo: Using your card in the UK and abroad

Feature Tide Monzo
Free foreign transactions Unlimited Unlimited
Foreign ATM withdrawals £1 each Free in European Economic Area
In other countries – withdraw £200 for free every 30 days. After this 3% charge applies
information correct as of September 2021

Both Tide and Monzo offer free card transactions when spending in the UK. The contactless card limit is £45 with Tide and £100 with Monzo.  You can also make cash withdrawals from ATMs for free with Monzo in the UK with a limit of £400 per day.

If you travel abroad, then you can use your Tide card to spend at any retailer or outlet where Mastercard is accepted. You’ll also receive the Mastercard exchange rate with no additional mark-up or fees. Unlike many other digital or High Street banks, there is also no limit to how much you can withdraw for free. However, you will still be charged £1 to withdraw cash at an ATM (the same charge as applies in the UK).

You can also enjoy free international spending with no limits with Monzo. Like Tide, the Mastercard exchange rate will also apply with no extra fees. If you use a foreign ATM to take out cash, then there is no withdrawal fee within the European Economic Area. In other countries, you can withdraw £200 for free every 30 days, but, beyond this limit, a 3% charge will apply.

Tide vs Monzo: Customer support

Feature Tide Monzo
Customer service via the app ✔️ ✔️
Customer service by phone ✔️ ✔️
information correct as of September 2021

Account-holders with a free Tide account can contact Tide Member Support through the app. In addition, you can also send Tide an email with your contact number and request a call back from the Member Support team during working hours. There is also an automated telephone service to report a lost or stolen card. For members on the Tide Plus or Cashback plans, you have access to telephone support, as well as a 24/7 legal helpline to assist with any tax or contractual issues. Tide Cashback members also benefit from their own dedicated account manager.

Monzo provides 24/7 support to business customers, through the in-app chat, as well as email and telephone assistance.

Tide vs Monzo in conclusion: similar yet different

In summary, the business bank accounts on offer from both Tide and Monzo have many similarities. Firstly, they are both digital accounts, which you can manage from the convenience of a mobile app. Secondly, you can apply for a free business bank account with no monthly charges with both Tide and Monzo. Thirdly, their apps are packed full of smart and you can upgrade to paid accounts or bundles to suit your business needs. However, while Monzo offers both personal and business bank accounts, Tide’s mission is solely to help start-ups and entrepreneurs with its mission of saving small businesses time and money. From company registration, VAT registration, setting up a virtual office address, to invoicing, expense management and managing your cash flow, Tide supports small business owners at every step of their journey.

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350,000 fellow business owners, just like you, already love our features:

✔️ Register your business for free

✔️ Open a business bank account with no monthly fees

✔️ Create and send free customised invoices

✔️ Predict your cash flow and improve your credit score

✔️ Unlock exclusive member perks and discounts

✔️ Get 24/7 legal support with Tide Plus and Cashback

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Souces used for this article

  1. Wikipedia – Monzo Bank
  2. Wikipedia – Challenger Banks
  3. Wikipedia – Financial Crash 2008
  4. Tide blog – e-money vs bank accounts: how Tide keeps your money safe
  5. Monzo website – https://monzo.com/i/business/help/

All sources checked as of 3rd August 2021

Caroline Wire

Caroline Wire

Senior Small Business Copywriter

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