Are Digital Banks Worth It for International Students?
If you’re an international student, you might be wondering whether digital banks are a good choice. The answer? It depends! Mobile and app-based banks like Monzo, Ally Bank, and Starling offer great features, but there are important things to consider before signing up.
This guide breaks down everything you need to know—from how they work to what makes them different from traditional banks.
What Are Digital Banks?
Digital banks (also called online or app-based banks) work just like regular banks—but with no physical branches. Instead of visiting a bank in person, you do everything online or through an app.
You can:
✔ Open an account in minutes
✔ Check your balance anytime
✔ Transfer money instantly
✔ Get customer support via chat or phone
Why Are They Useful for Students?
Digital banks come with built-in tools that make managing money easier, especially for students. Some helpful features include:
🔹 Spending Notifications – Get alerts when you spend money.
🔹 Savings Goals – Set aside money for rent, books, or travel.
🔹 Split Bills – Easily divide costs with roommates.
🔹 Low Foreign Fees – Many offer cheap or free international transfers.
These tools are great for keeping track of your budget—but international students should check a few extra things before choosing one.
Digital Banks vs. Online Banking – What’s the Difference?
A lot of people get confused between:
🔸 Digital Banks – These are banks that only exist online (like Monzo or Revolut).
🔸 Online Banking – This is just a service regular banks offer (like checking your balance on an app).
So, while all digital banks offer online banking, not all online banking comes from digital banks!
What Should International Students Look For?
1. Is the Bank Available in My Study Country?
Most digital banks work best in one country or region. For example:
- Monzo & Starling are popular in the UK.
- Ally Bank works best in the US.
- Tangerine is a top choice in Canada.
Before signing up, check if the bank operates in your study destination.
2. Can I Open an Account Before Arriving?
You might think: “Since there’s no branch, I can open an account from home!” But it’s not always that simple.
Some banks require:
📌 A local address (like your student housing)
📌 A visa or residence permit
📌 Proof of address (like a utility bill)
This means you might have to wait until you arrive before opening an account.
💡 Smart Tip: Many students open a traditional bank account first, then switch to a digital one later.
3. Can I Send Money Abroad?
Sending money home? Check:
✅ Exchange rates (Are they fair?)
✅ Transfer fees (Some charge high costs)
✅ Supported countries (Not all banks send money everywhere)
Banks like Wise and Revolut are great for international transfers.
4. Are There Hidden Fees?
Some things to watch for:
💸 ATM Fees – Many banks charge if you withdraw too much cash.
💸 Foreign Spending Fees – Some add extra costs when you spend in another currency.
💸 Monthly Limits – A few banks restrict free transactions after a certain amount.
Always read the fine print!
5. Is My Money Safe?
Even though digital banks are new, most are regulated and secure. Look for:
🔒 FCA Protection (UK) – Covers up to £85,000.
🔒 FDIC Insurance (US) – Protects up to $250,000.
🔒 CDIC Coverage (Canada) – Insures up to $100,000.
Never put money in an unregulated bank!
6. What If I Need Help?
Since there are no branches, support is only online or by phone. Some banks offer:
📞 24/7 live chat
📞 Phone support in multiple languages
📞 Fast response times
Others might take days to reply—so check reviews before choosing!
Do I Still Need a Traditional Bank?
Maybe! Some digital banks require a local bank account first. Others ask for documents (like a Social Security Number) that you might not have yet.
A good strategy is:
1️⃣ Open a student account at a traditional bank when you arrive.
2️⃣ Later, switch to a digital bank for better features.
This way, you get the best of both worlds!
Which Digital Bank Is Best?
Here’s a quick comparison of popular options:
| Bank | Best For | International Transfers? | ATM Fees? | Spending Abroad? | Perks |
|---|---|---|---|---|---|
| Monzo (UK) | UK students | Yes (via Wise) | Free up to £400/month | No extra fees | Budgeting tools |
| Starling (UK/EU) | Euro accounts | Yes (0.4% fee) | Free up to £300/day | No extra fees | Marketplace deals |
| Revolut | Frequent travelers | Yes (70+ currencies) | Free up to £200/month | Free up to £1,000/month | Stock trading |
| Ally Bank (US) | US students | No | $500-$1,000 daily limit | 1% fee | 24/7 support |
| Tangerine (CA) | Canadian students | No | Free at 3,500+ ATMs | 2% fee | No monthly fees |
💡 Other good options:
- US: Chime, Varo, Discover
- Canada: EQ Bank, Motusbank
- Australia: Up Bank
Final Advice
Digital banks can be super helpful for students—but always:
🔎 Research fees and limits
🔎 Check if your country is supported
🔎 Make sure your money is protected
If in doubt, start with a traditional bank and switch later.