Kroo is the UK’s newest bank. Having gained its banking licence in July 2022, it launched its first proper bank account in December 2022.
In true Money Saving Answers style, we signed up to be a guinea pig so we can tell you all about the account in this Kroo bank account review.
What is Kroo?
Kroo bills itself as a bank with a conscience and aims to be the ethical choice when it comes to digital banking in the UK. It was founded in 2016 and offered an e-money account until 2022 when it was granted a full UK banking licence.
This ethical stance is at the core of its proposition and in 2023 it aims to plant two trees for every new customer that joins.
How much does Kroo cost?
Kroo is completely free to join and use. There are fees when withdrawing more than £200 a month via an ATM, but otherwise it free to use.
Of course, it’s still early days, and many banks which started out offering free accounts later introduced paid subscriptions and held reserved certain features solely for those subscribers. Monzo is prime example here.
Opening a Kroo bank account
As an all-digital affair opening an account with Kroo is as straightforward as it comes. It shouldn’t take more than 5 mins from your phone.
You must be resident in the UK and provide official photo ID such as a Passport, driving licence or EU/EEA ID card.
You will then need to take a short video (via the app) repeating the words on screen when prompted. This is used to biometrically match your ID.
Once you’re done Kroo will validate the information. They say this can take several days, but in reality, it takes anything from 30 mins to an hour or two depending on how busy things are.
There is a soft credit search, but this isn’t something that affect your ability to gain credit in the future in any way.
Once verified your new Karoo Visa card will to be sent to your registered address. Typically, this would be with you in 5 days but with watch out for strikes at Royal Mail.
Card activation is handled via the app and is a simple as confirming a code. Unlike other digital banks your pin will also be posted to you. We found that odd given the environmentally friendly stance of the bank. Why not just let the user set their pin from within the app?
Kroo bank benefits:
Customers joining Kroo will enjoy a full UK bank account with visa debit card that is compatible with android and Apple Pay. In addition to regular banking activities such as direct debits, standing orders, faster payments, and debit car depending, the Kroo account also offers the following benefits.
2% interest on in credit balances
Rather than launch a separate savings account (as Starling has recently done) Kroo instead is offering 2% interest on positive current account balances.
This is an interesting approach which could lead to some customers earning more interest than they otherwise might as it will be paid on a higher balance.
The flip side however is that many like to physically or virtually separate their savings and expenditure which for now isn’t something Kroo caters for.
Fee free foreign spending
Fee free foreign spending has been a recurring theme of challengers since the early days of digital banking. Kroo doesn’t disappoint here, and even dedicates a page on its website to foreign travel.
It promises zero fees on all foreign purchases, with zero mark up, and uses the Visa exchange rate on card purchases. In that regard it matches Chase, Monzo, and Starling.
Where is falls down a little is in the ATM withdrawal limits. Currently customers can only take out up to £200 equivalent every month without incurring a fee. Any withdrawals over this are charged at 3%. That falls someway behind Chase’s newly increased £1,500 limit (on foreign ATM withdrawals), and even Starling’s £300 daily limit.
Unfortunately, there’s still a long list of countries where the Kroo Visa card still doesn’t work. These include popular holiday destinations such as Bali, Turkey, Thailand, and St Maarten.
If you don’t already have a top debit or credit card for foreign spending, then Kroo can fill that role for the most part.
In-app budgeting and spending control
Kroo offers instant payment notifications, categorised spending, and the ability to split bills with friends. These features will be familiar to anyone with a digital bank account, but still aren’t very common with traditional banks.
Kroo doesn’t yet have pots or spaces ala Monzo or Starling, but in future hopes to use predictive technology to help track your spending in real-time enabling you to make better financial decisions, and notify you of upcoming payments.
Ethical banking
“For over a century, big banks have been reaping financial benefits, even at the expense of customer losses and harm to the planet.
We built Kroo to address this imbalance. We want to improve the relationship people have with their banks and money and, ultimately, give them more financial independence and control. Our goal is to be a bank people truly trust and love.”
Kroo is trying to appeal to the more environmentally minding customers. It has teamed up with charity One Tree Planted, to plant two trees for every new customer it gains in 2023.
Is that enough to call it an ethical, socially conscious bank? Starling already has a partnership with Trillion Trees and has planted over 85,000 trees based on customer referrals. Of course, this isn’t a competition, but if a company is making a big song and dance about its environmentally friendly stance, then we expect more. Especially given the competition from Tridos, which recently won Best Ethical Financial Provider at last year’s British Bank Awards.
The drawbacks
Kroo is a completely digital account, but unlike its more established competition there’s no ability at all to deposit ‘analogue’ money. That means you can’t pay in cheques, or deposit cash.
Those looking to completely switch their banking to Kroo will also notice that Kroo isn’t a member of the CASS, and as such there is no 7-day switching service available. For now that is probably for the best while the bank focuses on developing its core services.
No intersectional payments. You cannot send or receive any payments abroad into your Kroo account. If that is something you need, we’d suggest opening an account with Revolut and then transferring money from there, to your Kroo account. If opened via our link you’ll also get three months free premium.
For UK based transfers, it’s also worth pointing out there’s no confirmation of payee. This is again something Kroo hope to add at a later stage. In the meantime you’ll want to double and triple and check the details of the person you are sending money to, just for peace of mind.
Is Kroo safe?
Kroo is a fully licenced UK bank, and as such customer deposits up to £85,000 are backed by the Financial Service compensation scheme.
The banking app itself uses secure data encryption to keep your details safe, and like most accounts these days, you can turn on or off various aspects of the account.
Is Kroo worth it?
As a fee-free account we’d have to say yes. The joining takes all of 5 mins of your time, costs you nothing, and does some good for the environment.
Beyond that though, it doesn’t offer anything that can’t be found elsewhere from more established banks.
Sure, there’s fee free foreign spending, but others have been offering this for longer and with cards that work in a wider range of countries. The ATM withdrawal limits are low too, which means it’s not as useful in more cash orientated countries e.g., Germany.
The 2% in credit interest is a nice touch, but there’s no separation of finances, and it’s easily beaten by Chase’s 2.7% easy access savings account.
As Kroo becomes more established we’re likely to see more features and innovation, but at the moment, we can’t see the benefit on switching or opening a new account with Kroo if you already have an account with one of the main UK digital banks e.g., Chase, Monzo, Starling.
For those that don’t currently have a digital bank account, Kroo could be a nice entryway the market, whilst keeping your traditional account to cover off services not yet offered by Kroo. As fintech fatigue starts to set in though, we can’t help but feel Kroo may fail to reach a critical mass, and instead be acquired by the likes of Revolut, N26, or other European bank looking for a UK banking licence.
Do you bank with Kroo? Tell us what you think below.
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