Are these 'Challenger banks' as safe as normal banks?
All 'challenger banks' are regulated but in different ways...
N26 - Your money is guaranteed by the German bank deposit protection scheme up to €100,000 (£89,000), rather than the UK’s Financial Services Compensation Scheme (FSCS), which protects up to £85,000.
Monzo - A fully regulated bank. Your money is protected by the FSCS up to £85,000.
Starling - A fully regulated bank. Your money is protected by the FSCS up to £85,000.
Monese - Guarantee the protection of 100% of customer funds. They do not re-invest customer funds and have to keep all customer money separate to their own company finances. This guarantees that even in the unlikely event that Monese is no longer in business, customers would receive 100% of their balance back.
Revolut - Client funds are safeguarded at Barclays/Lloyd's. As an authorised institution, Revolut safeguards your funds as per regulatory requirements. In the event of an insolvency of Revolut, you will be able to claim your funds from this segregated account and your claim will be paid above all other creditors.
What is the financial services compensation scheme (FSCS)?
This is a protection scheme offered to customers of official banks. This means customers' deposits are protected up to the sum of £85,000. This means if the bank goes bankrupt customers will definitely receive back their deposits up to this sum.