Monzo changes its paid accounts - are the perks worth paying for?

Challenger bank Monzo has shaken up its paid accounts to include additional perks such as railcards and a weekly Greggs sausage roll. 

The new plans - Extra, Perks and Max - will replace the existing Plus and Premium upgrades and set you back between £3 and £17 a month depending on which one you pick. 

Here, we take a closer look at what the new paid-for accounts offer, what existing customers need to know and whether they’re worth it.

What do the new Monzo accounts offer?

Monzo has introduced three new upgrade options, replacing its existing Plus and Premium plans.

Here's a summary of what the new accounts offer, with further detail below. 

Extra - £3 per month

The Extra account is very similar to the existing Plus plan. 

It gives you advanced spending tools for money management, such as custom spending categories and an auto-spreadsheet feature which adds your transactions to a Google Sheet that's kept updated in real time.

You also get advanced roundups and virtual cards which you can create and delete for budgeting and security reasons.

Under the roundup system, when you pay for something Monzo will round up the payment to the nearest pound and save the money for you. Advanced roundups mean the spare change is multiple by two, five or 10 - meaning you save more.

Virtual cards can be linked with your pots on Monzo, so you could create one for a specific purpose - for example, holiday spending or meals out - then add it to your Apple or Google wallet and use it to pay for those things, while keeping your main current account separate (which also has security advantages).

The Extra account also gives you fee-free cash withdrawal allowances in the UK and the European Economic Area and up to £200 fee-free elsewhere, which renews every 30 days. 

You get an instant access savings rate of 4.10% (variable) AER, but this is not the best rate Monzo offers. 

• Find out more: best savings rates 2024

Perks - £7 per month

As well as getting all the Extra benefits, the main draw to this account is a free annual railcard from Trainline (worth £30) which allows you to save a third on train travel. 

However, it's worth checking whether you're eligible for one first on the Trainline website. If you're aged 18-30 or 60+ you can get an age category card. If you're between 31 and 59 you may be able to get an alternative one depending on where you live and who you travel with. For example, the Network Railcard offers a third off travel in the South East.  

Another perk is a weekly Greggs treat such as a sausage roll, hot drink, doughnut or muffin. 

You get a higher allowance of £600 on fee-free cash withdrawals which renews every 30 days. 

Perks gives you access to Monzo's best savings rate of 4.60% (variable) AER. 

• Find out more: how to save money on train fares 2024

Max - £17 per month

The Max account is most comparable to Monzo's existing Premium Plan, offering phone and travel insurance and breakdown cover, as well as all the benefits from Extra and Perks. 

The account has a three-month minimum term and is only available to those aged between 18 and 69. 

Worldwide phone insurance is provided by Assurance and covers you for loss, theft and accidental damage, including cracked screens up to £2,000 with a £75 excess. 

Worldwide travel insurance is provided by Zurich and includes multi-trip cover for cancellation of up to £5,000, medical bills of up to £10m, lost valuables up to £750, winter sports and a car hire waiver up to £3,000. It has an excess of £50. 

UK and European breakdown cover is provided by the RAC and covers you as an individual, which means you’re covered in any valid vehicle as a passenger or driver. It includes home assistance, onward travel and vehicle recovery. 

For an additional £5 per month, you can extend these benefits to your family, but exclusions do apply. 

• Find out more: best travel insurance 2024

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What’s happening to Plus and Premium plans?

If you currently pay extra for Plus or Premium, Monzo said you can either choose to upgrade to one of the new plans or keep your existing plan.

If you cancel or move to a new plan you won’t be able to sign back up to Plus or Premium. 

Monzo Premium is currently £15 a month (£2 cheaper than Max) and includes travel insurance which extends to your family members without you having to pay an additional £5. 

However the cover is more limited as family members are only covered if travelling together. With Max, if you decide to add family members for £5 they will be covered if they are travelling separately, and you can also extend the phone insurance and UK and European breakdown cover.

• Find out more: how to save money on breakdown cover

What to know before applying

With any packaged bank account it's crucial you read the terms and conditions before upgrading to make sure you understand what will happen if you can no longer afford the monthly payments. In fact, not doing so could have repercussions for your credit score. 

You’ll need money in your Monzo account to pay monthly for the plan you choose, which will be taken automatically each month. 

If you choose the Max plan and you don’t have enough money and you have credit through an arranged overdraft, Monzo will take the payment from there. You’ll be charged interest at the current rate in your overdraft agreement. 

If you don’t have an arranged overdraft, Monzo will attempt to take the payment again each day for seven days. After this point, the payment will take you into an unarranged overdraft which could impact your credit score. 

People with a Perks or Max plan who cancel within the cooling-off period will have to pay £23 towards the railcard if it's been ordered.

Cancelling outside the cooling-off period means paying a fee (which works out at £1.92 a month) to keep your railcard, based on how long is left until your next Perks or Max anniversary. 

If you sign up for the railcard from Trainline, it’s worth noting that you can’t claim your next railcard until your last one expires, so if you’ve recently bought one which is still in date it might be worth holding off before signing up. 

• Find out more: best packaged bank accounts 2024

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Is Monzo a good current account provider?

One of the main perks of Monzo is fee-free spending abroad and fee-free cash withdrawals in the EEA. Other fairly new additions include cashback and an investment platform, all of which you can access with the free version of Monzo. 

In our latest survey of the best bank accounts, Monzo did well with a customer score of 82% and was rated highly for its customer service, application process and the app. 

However, it missed out on becoming a Which? Recommended Provider (WRP) because we only endorse banks with strong consumer protections. Since 2019 we've insisted that WRPs be signed up to the authorised push payment scam code to protect victims of fraud. Unlike most current account providers, Monzo has not signed up.

As Monzo is a digital bank it does not have any branches, so this type of account won't suit you if you prefer banking in person.

• Find out more: best and worst banks and bank accounts 2024

Are packaged bank accounts worth it?

Packaged bank accounts aren't necessarily great bank accounts – they may not offer cheap overdrafts, high interest or cashback on bills.

If you only need some of the cover offered by a packaged bank account, it's worth getting quotes directly from insurers and comparing them with the account fee.

Take a look at our guides on getting cheap travel insurance, breakdown cover and mobile cover.

If you’re older, your travel insurance premium might be considerably higher than the average if you were to buy it separately, meaning that getting cover through a packaged account could work out cheaper.

If you are looking for a packaged bank account, there may be better ones available to suit your circumstances. We’ve analysed 13 different accounts in our guide to the best packaged bank accounts from the likes of NatWest, Nationwide, Lloyds and more.

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