Lloyds vs. Starling Bank - How do they compare: fees, rates and features

Tired of your bank and looking to make a change? You’ll have a huge number of different banks, accounts and also digital services to choose from. So many in fact that it can be difficult to know which is the best option for your needs.

We’re here to help. In this guide, we’re pitting one of the UK’s oldest banks with one of its newest. It’s Lloyds Bank vs. Starling Bank, looking at everything from accounts, features and fees to security, cards and more It’s all so that you can make an informed choice

We’ll also take a look at how much each bank charges for international transactions, whether it’s sending money abroad or spending on holiday. This can be a real deal breaker, especially if you travel a lot or have family in other countries.

We’ll even show you an alternative which could save you money - the Wise multi-currency account.

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But first, let’s get some background on both Lloyds and Starling Bank.

Before looking at accounts, fees and other details, it can be useful to know a little about each bank.

Lloyds Bank is one of the oldest banks in the UK, with a history dating all the way back to 1765. It’s part of the Lloyds Banking Group, a leading financial services company. The bank itself is a retail bank, offering its services to both personal and business customers. Lloyds also offers private banking and international banking services.

While it offers online and mobile banking like pretty much every major bank these days, Lloyds also has a network of over 1,000 high street branches¹ throughout the UK. Along with accounts, it also offers mortgages, loans, credit cards and wealth management services.

Now, onto Starling Bank. It’s quite different to Lloyds, as it’s a digital bank with no physical high street branches. It’s also quite new, having only launched in 2014 as one of Britain’s first digital banks.² However, Starling is fully licensed and regulated in the UK, just like a traditional retail bank.

Starling Bank prides itself on offering “fast technology, fair service and honest values.”_² It has over three million account holders,² serving both personal and business customers. Unlike Lloyds, it only offers accounts and cards to personal customers - so you can’t use Starling to take out a loan or a mortgage.

Lloyds vs. Starling Bank - Accounts

Lloyds Account Options

Lloyds Bank offers a wide choice of current accounts, including:³

• Classic Account - a current account for free everyday banking, with an overdraft facility available if needed.
• Club Lloyds - an account with a monthly fee and extra rewards, including credit interest and an annual lifestyle benefit
• Silver - a perk-packed current account with a monthly fee, with benefits including European travel insurance, mobile insurance and breakdown cover.
• Club Lloyds Silver - an account package with a monthly fee, which combines all the best features of Club Lloyds and Silver
• Platinum - a step up from the Silver account, including benefits such as worldwide travel insurance, mobile insurance and breakdown cover, all for a monthly fee.
• Club Lloyds Platinum - with the highest monthly fee, this account includes all the best features of the Club Lloyds and Platinum accounts.

There are also dedicated accounts for young people and students. All accounts come with online and mobile banking, and a debit card as standard.

Starling Bank Options

Starling Bank, on the other hand, only has one main current account. However, you can get a joint account or teen account, as well as the Starling Kite debit card package for children. If you want to manage your money in euros, you can open a Starling Euro Account.

The Starling Bank Personal Account is app-based, and comes with no monthly fees. Features include:⁴

• Instant notifications for payments
• Categorised spending insights
• Spaces, so you can round up transactions and put money aside in virtual change jars
• Access to other financial products through Marketplace
• Bill splitting and easy money transfer features
• Earn 0.05% interest on your balance
• Access to a Fixed Saver account
• Debit card, managed through the app.

Lloyds vs. Starling Bank - Fees

Now we come to the important part - how much does it cost to have an account with Lloyds Bank or Starling Bank? Here, we’ll look at fees for opening and managing each account, along with charges for everyday services, such as using your card.

Monthly fees

Neither Lloyds or Starling charges a fee to open or switch to an account. Starling Bank doesn’t charge any monthly fees for any of its accounts, but some of Lloyds premium accounts do come with a charge. Let’s take a look:³

Lloyds Bank account	Monthly fee
Classic	Free
Club Lloyds	£3 - waived if you pay in £2,000+ a month
Silver Account	£10
Platinum	£21
Club Lloyds Silver	£10 + £3 Club Lloyds fee (waived if you pay in £2,000+ a month)
Club Lloyds Platinum	£21 + £3 Club Lloyds fee (waived if you pay in £2,000+ a month)

Pricing and Fees Correct as of 01-May-2023

Everyday fees

Here’s what you can expect to pay for everyday banking with both providers:

Transaction	Lloyds Bank (Classic)⁵	Starling Bank (Personal Account)⁶
Faster Payments within UK	No fee	No fee
CHAPS payment	£30	£20
ATM cash withdrawal (UK)	No fee (although some ATM operators may charge their own fee)	No fee (although some ATM operators may charge their own fee)
Debit card payments (UK)	No fee	No fee
Deposit cash	N/A	No fee for depositing up to £1000 a year via Post Office Counter Service 0.7% fee afterwards
Replacement debit card	No fee	£5

Pricing and Fees Correct as of 01-May-2023

Lloyds vs. Starling Bank - International money transfer

Want to use your new bank account to send money overseas? Perhaps you have a second home in another country, and need to pay the bills. Or perhaps you want to send money to a family member overseas.

The first thing to know is that a bank is not usually the cheapest or quickest way to do it. But let’s see how much it’ll cost with both Lloyds and Starling, taking transfer fees and exchange rates into account.

Transfer fees

Lloyds Bank charges no fee for payments made in euros, but it’ll cost you a flat fee of £9.50 to make payments in any other currency. There may also be correspondent bank fees of between £12 and £20 depending where the transfer is heading to.⁵

To receive money from overseas, you’ll pay no fee if the payment comes from within the EEA and is in euros. For other currencies, it’s £2 to receive up to £100 from overseas, and £7 for amounts over £100.⁵

Starling Bank offers a much simpler fee structure for international transfers. It charges a flat delivery fee of £5.50 for SWIFT transfers, or you can send through a local network payment (which can be a little slower) for as little as £0.30 a transfer.⁷

Exchange rates

As well as the transfer fee, it’s also important to check out the exchange rate when setting up an international payment.

To check whether you’re getting a good deal, look up the mid-market exchange rate for your chosen currency pair. This is what banks use to trade currency with each other, and it’s known as one of the fairest rates you can get.

Both Lloyds Bank and Starling Bank add their own margin to the mid-market rate. This means you get a slightly worse rate for the currency conversion, and the transfer ends up costing you more.

Lloyds doesn’t publish its margin, although you can check rates via online banking or contacting the bank before sending an overseas transfer.

Starling Bank adds a flat 0.4% fee⁷ to the currency conversion, for all transfers.

A quick cost comparison

To help you get an idea of how fees and exchange rates contribute to the cost of your transfer, let’s do a quick example.

Imagine you want to send £500 from the UK to Australia, to put towards the deposit on a holiday home, for example. Here’s how much it’ll cost with Lloyds and Starling, plus an international transfer specialist like Wise:⁸

Provider	Transfer fee	Exchange rate	Recipient receives
Lloyds	£9.50	1.81534	890.42 AUD
Starling Bank	£0	1.88208	926.92 AUD
Wise	£4.39	1.88308 - mid-market rate	933.27 AUD

Exchange rate & fees correct as of 01-May-2023 - Markets are subject to change.

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So as you can see, that exchange rate makes all the difference. Even though Starling Bank has no transfer fee, it’s still beaten by Wise in this example because of the exchange rate. This means that less money is lost in currency conversion, and the recipient gets more at the other end.

Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information.

Wise: a cost-saving alternative for managing your money internationally

As we’ve seen from the example above, banks aren’t always the best option for sending money internationally. That’s even the case for digital banks such as Starling, which are making it easier and cheaper to manage money internationally.

If sending and receiving international payments is something you’ll really need, check out Wise. You can send money worldwide with Wise for low, transparent fees. Best of all, you’ll always get the mid-market exchange rate with no costly margins on top. And never any hidden fees.

Wise makes it fast, convenient and affordable to manage your money internationally. It’s ideal for travelling too, as there’s even a Wise card for spending just like a local would!

Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees.

Check out Wise today 😍

Lloyds vs. Starling Bank - Cards

All accounts with both Lloyds Bank and Starling Bank come with a contactless debit card as standard. Lloyds uses Visa cards, while Starling uses Mastercard - but both are accepted worldwide.

Lloyds Bank offers an extra perk with its debit cards, which is 15% cashback when you sign up with its Everyday Offers program and spend with selected retailers.⁹

Using your debit card overseas - withdrawal fees and limits

You can use your Lloyds Bank or Starling Bank to withdraw cash at ATMs both within the UK and abroad. It’s usually fee-free within the UK (including paying for goods with your debit card), although some ATM operators may charge their own fee for cash withdrawals.

However, using your card overseas does usually come with some fees and limits. Let’s take a look:

Provider	Overseas ATM fee	Withdrawal limit	Overseas card purchases fee
Lloyds Bank	£1.50 + 2.99% foreign currency transaction fee⁵	£500 per day¹⁰	£0.50 + 2.99% foreign currency transaction fee⁵
Starling Bank	No fee⁶	£300 per day, max. 6 withdrawals¹¹	No fee⁶

If you’d rather swerve the fees, and get a better exchange rate at the same time, consider taking the Wise card with you on your travels. It automatically converts your money to the local currency at the mid-market exchange rate, for just a small conversion fee. Or if you already have the currency in your Wise account, it’s free.

Open a Wise Account Today 🚀

Lloyds vs. Starling Bank - Security

Lastly, we come to security - how safe is your money with Lloyds Bank and Starling Bank? The first thing to know is that both are fully regulated and licensed UK banks, offering up to £85,000 protection under the Financial Services Compensation Scheme (FSCS).

Lloyds offers all the high-level security features you’d expect of one of the UK’s biggest banks. This includes built-in security in the Lloyds Bank mobile app, a solid Fraud Guarantee and secure biometric account access.

Starling Bank is also hot on security, offering the following features:

• Biometric identification
• 3D Secure
• Card controls in the app, including freezing and setting personalised spending limits
• Real-time notifications for payments.

So which is better - Lloyds or Starling Bank?

Ultimately, it’s up to you to decide which bank or account fits your needs, and the way you like to bank. Both Lloyds and Starling offer online and mobile banking, but Starling’s app has more features to appeal to customers wanting to bank on the move.

Starling is also better for spending and withdrawing cash abroad, although in the example above Wise did better on international transfers.

Both also offer robust security and protection for your money.

In terms of accounts, there’s a much wider choice at Lloyds Bank than Starling. Some come with monthly fees (while Starling’s account is free) but you do get an impressive package of benefits in return.

Hopefully after reading this guide, you’ll have all the info you need to compare the two - and other providers - and find the right bank for you.

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Sources used:

1. Lloyds Banking Group - Who We Are
2. Starling Bank - About
3. Lloyds Bank - Current Accounts
4. Starling Bank - Current Account
5. Lloyds Bank - Classic Account fee information document
6. Starling Bank - Rates, fees and charges
7. Starling Bank - Send money abroad
8. Wise - Send Money
9. Lloyds Bank - Classic Account
10. Lloyds Bank - Personal banking terms and conditions
11. Starling Bank - Help - What is the ATM withdrawal limit?

Sources last checked on date: 01-May-2023