Where will Funds be held for Current Accounts


When Monzo start to offer current accounts, funds paid into those current accounts. Where will they be held?

The reason I ask, I’ve been using another banking app which recently offered current accounts. Funds are held with Barclays and Lloyds Banks.

Thanks in Advance


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Unlike those other providers, Monzo will have a banking license so they’ll be able to hold the funds in their own accounts (& the Bank of England’s) - & they will.

Since they’ll also have FSCS protection, your funds will be just as safe when they’re being held by Monzo, as they would be with Barclays / Lloyds etc.


Arguably your funds are safer with Monzo, considering the exposure traditional banks have on their balance sheets. Monzo are currently only planning to lend out money for overdrafts, compared to mortgages, derivatives, etc. that traditional banks are up to their necks in.


very good point @tommy5dollar

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I find it a little bit difficult to judge exposure too but those are definitely important factors.

Obviously all deposits under the FSCS threshold (currently 85k) are equally safe, thanks to the deposit protection scheme.

But that is worth considering if you’re depositing more than that.


So I have a question on this - we keep hearing about the big four having banking licenses (Barclays, HSBC, RBS & Lloyds) and that Metro Bank was the first to get one in 100+ years. What then do other British banks like the Co-op or Halifax etc operate under?

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There’s a (perhaps) surprisingly long list of institutions that have banking licenses in the UK, on the Bank of England’s website -


The Co-op is listed & I expect Halifax’s license is covered by Lloyds, as they’re part of Lloyds Banking Group.

Wow that is a looong list! But then how does this make sense (granted its Wikipedia but at the time I recall hearing the same in the press):

Well spotted :slight_smile: according to the source for that citation

Metro Bank, which claims to be Britain’s first new high-street bank for more than 150 years

so I suspect that’s a combination of PR & slightly suspect reporting :wink:

You can see some of the other challenger banks on the list & it’s the Bank of England’s website of course so I reckon it’s pretty up to date.

I thought Bank of Scotland and Halifax and Lloyds were once license but despite NafWest being owned by RBS there are separate licenses for each part of that group.

There are implications from the licensing on FSCS claims. In the event you had say £80,000 in NatWest and £80,000 in RBS if the RBS group (i.e. NatWest and RBS) collapsed your full £160,000 would be protected as both parts of the group are covered by a separate licence.

If say there is one licence covering 2 or 3 banks in the HBOS group then if you had £75K in 3 of their banks you would only be covered to £75K and not the full £225K despite having below the £85K limit in each account.


I have just Googled for evidence of this and http://www.money.co.uk/guides/which-banks-count-as-one-under-the-financial-services-compensation-scheme-fscs.htm gives a simple summary of the main points of the FCSC cover…though FCSC’s own site is more definitive.

Lloyds and BOS are not in fact under one license but HSBC and First Direct are. Here is a list for those interested:

Institutions which covered under a single group licence:

Bank of Ireland UK and Post Office

Bank of Scotland, Aviva, Halifax, Intelligent Finance, Birmingham Midshires (BM Savings), AA, Saga, Capital Bank, St James’s Place Bank

Barclays, Standard Life Cash Savings, The Woolwich

Clydesdale Bank and Yorkshire Bank

The Co-operative Bank, Smile and Britannia

Coventry Building Society and Stroud & Swindon

HSBC and First Direct

Lloyds Bank and Lloyds Bank Private Banking

Nationwide, Cheshire Building Society, Derbyshire Building Society and Dunfermline Building Society

Santander and Cahoot

Skipton Building Society and Scarborough Investments Direct

Yorkshire Building Society, Barnsley Building Society, Chelsea Building Society and Norwich & Peterborough Building Society


Hmmm, okay so it’s utter tosh then - maybe as this Telegraph article says it’s the “first new high street bank in over 100 years”. Although I’m still struggling with that - I mean look at that list on the BoE website!

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@barrymckelvey - which provider(s) is holding funds with Barclays and Lloyds - may shed light on our licensing question.

High street being the key words here. :wink:

I’m not even sure if Monzo fits the definition of a high street or retail bank to be honest and I’m fairly sure that some of the weirder or more specific banks such as CAF Bank also don’t fall under this wording.

In the case of the Co-op bank mentioned earlier in this thread, a quick search suggests that it was formed in 1872!

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Okay fair point - and thanks for clearing up the Co-op question. I assume though that the Banking licence does not distinguish between High Street and not - in which case are we saying that it was just a bit of a tag line from a PR and press standpoint?

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yep PR spin and typical journalism


I don’t believe it does to any significant degree.

This is a hard call to make because Metro PR aren’t wrong, the question is just how much do we care about a new retail bank opening verses an online or telephone bank? Metro certainly deserve some credit for being the first new retail bank in a long time and that’s an impressive feat but if you don’t care about the branches, you could certainly argue that it is just PR.

It is just PR … ha ha


@aeroc I was referring to Revolut.


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