Ziyad verdict
Halal to spend from. Not to save in.
The current account pays no interest on any plan, so most scholars allow it for everyday banking. Nearly everything else Monzo sells pays or charges interest.
Use
- Current account
- Regular and bills pots
- Salary sorter
Avoid
- Savings pots and cash ISAs
- Overdraft and loans
- Flex, even the 0% plans
- Investments and Pension
Check
- Round-ups go to a regular pot
- No 1p Saving Challenge on a paid plan (it pays 5%)
- Max includes conventional insurance
Checked 15 October 2026 against Monzo's own pages. Our reading of mainstream scholarly views, not a fatwa.
Monzo, feature by feature
| Feature | Interest? | Verdict |
|---|---|---|
| Current account (main balance) | None paid, on any plan | Fine to use |
| Regular pots, bills pots, salary sorter | None paid | Fine to use |
| Round-ups | Depends which pot they land in | Fine if they go to a regular pot |
| Savings pots and cash ISAs (Instant, Select and Fixed) | Pays 2.75% to 4.70% AER | Avoid |
| 1p Saving Challenge | Pays 5% AER on Extra, Perks and Max | Avoid |
| Overdraft and personal loans | Charges interest (overdraft 19% to 39% EAR) | Avoid |
| Flex, pay in full or over 3 months | 0%, but interest applies if you fall behind | Avoid (see below) |
| Flex, 6 or 12 months | Charges 29% APR representative | Avoid |
| Investments and Monzo Pension | No Shariah-screened fund on offer | Avoid |
| Paid plans (Extra, Perks, Max) | The fee is fine, the savings boosts are interest | Fine, skip the interest perks |
Our verdict: keep Monzo for spending and budgeting, where it is excellent. Keep your savings, investments and pension somewhere built to be halal.
Why the current account is fine
Your main Monzo balance earns nothing. We checked the current account, the savings page and all four plans, and interest only appears inside savings products. That matters, because the main objection to a bank account is being paid riba.
Most scholars allow a conventional current account as a concession, because modern life needs one. A widely cited answer from Askimam, under Mufti Ebrahim Desai, sets three conditions: use it only as far as you need to, give away any interest it pays you, and use Shariah-compliant savings where you can.
Some people go further. A conventional bank still lends its deposits out at interest, so where an interest-free alternative is practical, many Muslims prefer to use it. That is a matter of conscience, not a requirement most scholars impose.
Is your money safe? Monzo Bank Limited is authorised by the PRA and regulated by the FCA and PRA (register number 730427). Deposits are covered by the FSCS up to £120,000 per person, the limit that has applied since 1 December 2025.
The parts that pay interest
Every Monzo savings product pays interest. On 15 October 2026 the rates were:
| Savings product | Free | Extra (£3) | Perks (£9) | Max (from £19) |
|---|---|---|---|---|
| Instant Access pot and cash ISA | 2.75% | 3.00% | 3.25% | 3.50% |
| Select Access pot and cash ISA | 3.15% | 3.15% | 3.65% | 3.65% |
| Fixed Rate pot and cash ISA, 1 year | 4.70% | 4.70% | 4.70% | 4.70% |
| 1p Saving Challenge | Not available | 5% | 5% | 5% |
All AER, variable unless marked fixed. Source: monzo.com, 15 October 2026.
Those are good rates for a conventional bank, and that is exactly the problem. The return is interest on a loan to the bank, which is riba whatever the number.
The easy one to miss is the 1p Saving Challenge. It feels like a savings game, but on Extra, Perks and Max the Challenge Pot pays 5% AER. If you have started one, that pot is earning interest.
The parts that charge interest
Overdraft. Monzo charges 19%, 29% or 39% EAR depending on your credit score. Monzo lets you switch the overdraft off, so do that if you have one.
Personal loans. Interest-bearing. Avoid.
Monzo Flex. This one needs more care than most articles give it.
- Paying in full next month, or over 3 months, is interest-free, and Monzo says it charges no late fees.
- Plans over 6 or 12 months charge 29% APR representative (variable).
- If you miss a payment and have not caught up within 7 days, Monzo's help page says it moves plans of 3, 6 or 12 months onto 24 monthly payments at 29% APR.
So even the 0% option sits inside a credit agreement that charges interest if things go wrong. Scholars differ on signing an agreement with an interest clause you never intend to trigger, and the cautious view is to leave Flex off. A debit card does the same job without the question.
Investments and the Monzo Pension
Monzo Investments offers 17 funds through a stocks and shares ISA or a general investment account. The fee is 0.25% a year, capped at £250. None of the funds is Shariah-screened.
- Two of the three ready-made funds hold bonds. "Careful" is about 80% bonds and "Balanced" about a third. Bonds pay interest.
- The geographic and themed funds track ordinary indices, which include banks, insurers and other businesses that fail Shariah screening.
The Monzo Pension is a self-invested personal pension using BlackRock funds, including LifePath target-date funds. There is no Shariah option.
If you want an ISA or pension that is screened for you, use a provider that offers Shariah-compliant funds. Our halal investing guide covers the platforms, and our halal pension guide shows how to check what your pension holds.
Paid plans: Extra, Perks and Max
| Plan | Price | What matters for a Muslim user |
|---|---|---|
| Extra | £3 a month | Higher savings interest and the 5% Challenge. Skip both. The budgeting tools are fine. |
| Perks | £9 a month | Adds a 0.50% savings boost, which is interest. The railcard, cinema and other perks are fine. |
| Max | From £19 a month, 3-month minimum | Everything in Perks, plus conventional travel, phone and breakdown insurance |
Paying a monthly fee for a service is not a problem. What comes bundled with it is the question.
On Max, the bundled insurance is conventional insurance. Most scholars hold conventional insurance to be impermissible, with cover the law requires treated differently, though a minority of scholars permit it. If that matters to you, Extra and Perks carry no insurance.
Already earned interest at Monzo? Purify it
Plenty of people opened a savings pot before thinking about it. The fix is simple.
- Add up the interest each pot has paid you. Your statements show each payment.
- Give that amount away to people in need, without intending reward for it. Darul Ifta Birmingham explains the reasoning: the aim is to remove money that was never yours, not to earn sadaqah from it.
- It is not zakat and does not reduce the zakat you owe.
- Move the savings so it stops building up.
How to set Monzo up the halal way
- Keep your salary landing in the main account. Use regular pots for bills and goals.
- Open Round-ups and the salary sorter and check they point at a regular pot, not a savings pot.
- On a paid plan, close any 1p Saving Challenge pot.
- Switch off the overdraft if you have one.
- Leave Flex turned off.
- Move savings to an Islamic bank, where you earn an expected profit rate instead of interest, with the same FSCS protection up to £120,000 per bank.
- Hold investments and pensions with a provider that offers Shariah-screened funds.
Where to keep your savings instead
UK Islamic banks pay an expected profit rate, not interest. Your money is invested in Shariah-compliant assets and you share in the profit. The rate is indicative and can change, but deposits are covered by the FSCS in the same way as Monzo's.
Compare every halal savings account in the UK, with today's expected profit rates
Want to know who is behind each account first? Our list of Islamic banks in the UK covers who owns each one and what it offers.
Frequently asked questions
Is Monzo halal? The current account is fine to use for most scholars because it pays no interest. Monzo's savings pots, cash ISAs, overdraft, loans and Flex all involve interest, and its investments and pension have no Shariah-screened option. Use it to spend, not to save.
Does the Monzo current account pay interest? No. The main balance and regular pots pay nothing on any plan. Only savings pots, cash ISAs and the 1p Saving Challenge on paid plans pay interest.
Are Monzo savings pots halal? No. Instant Access, Select Access and Fixed Rate pots all pay interest, between 2.75% and 4.70% AER when we checked.
Is the Monzo cash ISA halal? No. It is the same interest-paying savings inside a tax-free wrapper. A cash ISA from an Islamic bank pays an expected profit rate instead. See our halal ISA guide.
Is Monzo Flex halal? The 6 and 12 month plans charge interest. The 0% plans do not, but if you fall behind for more than 7 days Monzo moves them onto 24 months at 29% APR. The cautious view is to leave Flex off.
Is the 1p Saving Challenge halal? Not on a paid plan. On Extra, Perks and Max the Challenge Pot pays 5% AER. Save into a regular pot instead.
Is Monzo Investments halal? Not as it stands. None of its 17 funds is Shariah-screened, and two of the ready-made funds hold bonds. Monzo also offers a gold fund. Physically backed gold is accepted by many scholars, but Monzo's public pages do not say which product sits behind it, so check the factsheet in the app before treating it as halal.
Are Monzo's paid plans halal? The fee is fine. Avoid the savings interest that comes with them, and be aware that Max includes conventional insurance.
Is my money safe with Monzo? Monzo is a UK bank authorised by the PRA and regulated by the FCA and PRA. Deposits are FSCS protected up to £120,000 per person.
Bottom line
Monzo is an excellent spending account. It is not a place for halal savings. Keep the spending, move the saving. Compare halal savings accounts, and if you want your whole set-up looked at in one go, book a call.
Sources
Checked on 15 October 2026.
- Monzo: savings and ISAs, paid plans, overdraft interest, Flex interest rates, missing a Flex payment, 1p Saving Challenge, Investments, Pension
- FSCS: deposit protection limit
- Scholarly sources: Askimam on conventional current accounts, Darul Ifta Birmingham on interest money, IFG on insurance
Ziyad Finance provides education only. We are not financial advisers and we do not issue religious rulings; ask a qualified scholar about your own situation. Monzo features and rates were checked on 15 October 2026 and change often. Savings rates at Islamic banks are expected profit rates, indicative and can change. FSCS protection applies to eligible deposits up to £120,000 per person, per authorised bank. Investments can fall as well as rise and you may get back less than you put in. Where we link to providers we may receive a referral fee; this never affects our verdicts.
