Are Digital Banks Safe? FSCS Cover for Monzo, Starling, Chase

Are digital banks safe? For Monzo, Starling and Chase the short answer is yes, and in the way that counts: each holds a full UK banking licence, and your money sits behind the same statutory compensation scheme that backs any high street bank. A bank with no branches is not a bank with less protection. What actually varies between money apps is not how modern they look, it is whether the firm holding your cash is a licensed bank at all, and that distinction is worth two minutes of your time.

There is also a number worth correcting straight away. Most pages you will find on this question still quote £85,000. That figure is out of date.

The protection limit is £120,000, not £85,000

On 1 December 2025 the deposit protection limit rose to £120,000 per eligible person, per banking licence, up from the £85,000 that had stood since January 2017. The Financial Services Compensation Scheme confirms the new figure, and the increase was set by the Prudential Regulation Authority to keep the cap in step with inflation.

Two details make the FSCS more useful than people expect:

• You do not claim. If a UK-authorised bank fails, the FSCS pays eligible depositors automatically. There is no form and no queue to join.
• Temporary high balances are covered far higher. If you are briefly holding a large sum after a life event such as a house sale or an inheritance, up to £1.4 million is protected for six months.

Monzo, Starling and Chase all hold full banking licences

This is the core of it. All three are UK-authorised banks regulated by the FCA and the PRA, so eligible deposits are FSCS protected to £120,000:

• Monzo is Monzo Bank Limited, Financial Services Register number 730427.
• Starling is Starling Bank Limited, Financial Services Register number 730166.
• Chase is the one that surprises people. Chase UK is a trading name of J.P. Morgan Europe Limited, register number 124579. Your deposit protection sits with that entity, not with a separate “Chase” licence.

Because these are three different licences, the limits stack. Hold money at all three and you have £360,000 of cover, which is the simplest way for a larger saver to stay protected without touching a high street brand.

Revolut became a full UK bank in March 2026, but check your own account

Revolut is the live case worth knowing about, because its answer changed recently and the change is not finished.

Revolut spent years operating in the UK as an e-money institution, then held a restricted licence during a phase regulators call mobilisation. On 11 March 2026 the PRA lifted those restrictions and Revolut Bank UK Ltd launched as a fully licensed UK bank, bringing FSCS protection of £120,000 to its UK customers.

The catch is the migration. Revolut is moving existing customers across in stages, a process it expects to take a few months, and your money only becomes FSCS protected once your account has actually been moved. New customers are set up on the bank entity from the start. So “is Revolut FSCS protected” currently depends on whether your specific account has migrated yet, and the app will tell you. Until it does, your balance is safeguarded rather than FSCS covered, which brings us to the difference between those two words.

Safeguarding is not the same as FSCS cover

Plenty of popular money apps are not banks. They are e-money institutions, and they protect your money by safeguarding it: the firm must keep customer funds ring-fenced in a separate account at a bank, apart from its own money, under the Electronic Money Regulations 2011.

That is genuine protection, and it is not a reason to avoid these apps. But it is weaker than the FSCS in two specific ways. There is no government-backed compensation figure standing behind it, and if the firm became insolvent you would be waiting for the ring-fenced pool to be distributed rather than getting an automatic payout. Money in a licensed bank comes back to you quickly and by default. Money that is safeguarded comes back through an administration process.

The practical rule: keep your working balance wherever it is convenient, and keep serious savings somewhere FSCS protected.

The licence trap that catches savers

The £120,000 is per licence, not per brand or per account, and several familiar names share one licence. The FSCS gives HSBC as the clearest example: HSBC and first direct sit on the same banking licence, so £120,000 covers your total across both, not £120,000 each. Nationwide similarly trades under several former building society names on a single licence.

Savings apps add a second layer of this, and it is the trap most people miss. Apps like Plum, Chip and Moneybox are not banks, so the cash you save through them is placed with partner banks, and those partner banks are the ones your FSCS cover depends on. Moneybox uses HSBC, Lloyds and Bank of Scotland as operational banks. Plum spreads deposits across partners including Citibank and Lloyds, and caps any single bank at 65% of your money. If you already hold savings directly with a bank your app happens to use, both balances count towards the same £120,000.

To check any of this properly, look the firm up on the FCA’s Financial Services Register and compare the reference number. Same number means same licence means one shared limit.

So, are digital banks safe?

Yes, provided you check the one thing that matters, which is whether the firm holding your money is a licensed UK bank. Monzo, Starling and Chase all clear that bar, and their deposits are protected to £120,000 exactly as a high street bank’s would be. Revolut now clears it too, once your account has migrated. The apps that sit a step away from a banking licence are still worth using, they just deserve to hold your spending money rather than your savings.

If you are weighing up which to make your main account, our Monzo vs Starling comparison and Chase vs Monzo comparison go into rates and features, and is Plum safe covers how protection works inside a savings app.

Frequently asked questions

Are digital banks safe to use as your main account? Yes. Monzo, Starling and Chase hold full UK banking licences and are regulated by the FCA and PRA, so eligible deposits are FSCS protected up to £120,000 per person, per licence, exactly as with a high street bank.

Is my money protected up to £85,000 or £120,000? £120,000. The limit rose from £85,000 on 1 December 2025 and applies per eligible person, per banking licence. Any guide still quoting £85,000 has not been updated.

Is Revolut FSCS protected? It depends on your account. Revolut Bank UK Ltd exited mobilisation and launched as a fully licensed UK bank on 11 March 2026 with £120,000 of FSCS cover, but existing customers are being migrated in stages over several months. Your money is FSCS protected once your account has moved across, and safeguarded until then.

Does Chase have its own banking licence? No. Chase UK is a trading name of J.P. Morgan Europe Limited, Financial Services Register number 124579, and that is the entity your FSCS protection sits with.

Do I get £120,000 protection at each digital bank? Yes, if they are on separate banking licences. Monzo, Starling and Chase each hold their own, so money across all three is covered up to £120,000 at each. The limit is shared only where brands sit on the same licence, as HSBC and first direct do.

What happens if a digital bank goes bust? The FSCS compensates eligible depositors automatically, with no claim to submit. You do not need to contact anyone or fill in a form for a failed UK-authorised bank.