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Online bank accounts

Online bank accounts

Getting an online bank account means different things to different people. For some, it’s about checking your account balances on the internet. For others, it means switching to a digital-only bank, downloading an app and never setting foot in a branch again. We take a look at the options, and pros and cons of banking online.

Anelda Knoesen
From the Money team
minute read
posted 6 MARCH 2020

Basic internet banking

Most traditional banks offer online banking via their websites. Once you’ve registered for your bank’s internet banking service, you can do pretty much all your day-to-day banking online, such as:

  • checking your balance
  • setting up new savings accounts
  • transferring money
  • making payments
  • keeping track of a linked mortgage or other loans.

Most banks also offer mobile apps, so you can do the same things on your smartphone. Some apps don’t offer quite as many services as the bank’s main website, so if this is important to you, make sure your chosen bank offers what you need.

The benefits of online banking

  • Ease and convenience. You can manage your money 24/7 and make payments immediately with no need to visit a bank. It can help you save time and stay on top of your finances.
  • Save the trees? With online banking, you usually have the option to get your statements by email instead of on paper. This might make your filing easier and could save a few trees. It also saves the bank money.

Online accounts from traditional banks

A lot of traditional banks offer online-only accounts as well as their ordinary current and savings accounts. These are accounts that have no offline access – you won’t be able to do any of the usual things in your branch, like making deposits and withdrawing money.

Online savings accounts

You can often find online-only versions of savings accounts, such as ISAs and fixed rate savings accounts. Online-only savings accounts typically have more restrictions than online current accounts – you’re unlikely to be able to make bill payments and probably won’t have access to a card to withdraw money from an ATM.

Online banking with digital-only banks

Many of the new ‘challenger’ banks, such as Monzo and Starling, have no branches on the high street. Their only location is online.

With many of the digital banks you do everything on your phone. From setting up the account (you take a picture of your ID with your phone camera) to making payments, to applying for loans and overdrafts, it’s all done digitally through an app.

Not all digital banks offer the full range of banking services. For example, as of January 2020, Atom Bank only offers savings accounts, mortgages and business loans, but has plans to expand. However, some people use digital banks alongside, rather than instead of, an account with a high-street bank.

The benefits

  • Preferential rates Digital banks often offer attractive rates on savings, as well as on card payments abroad.
  • Convenience Mobile banking via an app makes it easy to make payments or check your balance, wherever you are.
  • More control Digital-only banks might offer features like payment notifications, the ability to split money into different pots and the option to freeze and unfreeze cards. They may also link with other financial apps to give you even more oversight.
  • Focus on customer experience For the digital banks, a perfectly smooth customer experience is everything. They put in the effort to create easy-to-use apps with smart features.

Are online bank accounts secure?

No bank account is completely secure from fraud, online or not. But payment card fraud is much more common than online bank account fraud, according to government figures .

Online banking involves a lot of security measures. With basic internet banking, you’ll usually have to log in using security questions and a device that generates random codes based on your PIN or card. With digital banking via an app, you need your phone and often your PIN to make payments.

You’ll need to be take steps yourself too. Here are some top online banking tips to help keep your accounts safe:

  • Be alert. Check your statements as often as you can. If you notice anything unusual, contact your bank as soon as possible.
  • Be wary. Don’t give out your passwords or personal details to anyone claiming to be from your bank, either by phone or email.
  • Log out. Always log out of your online banking session or close down any apps on your smartphone or tablet.
  • Only use secure connections. Public Wi-Fi connections, such as those in coffee shops, usually don’t offer the same level of security as your Wi-Fi at home.
  • Keep virus free. Use up-to-date anti-virus software on your computer or tablet.
  • Use secure passwords. Passwords and PINs should be hard to guess and different from those you use for anything else.

What happens if something goes wrong with online banking?

If someone hacks into your account, don’t panic. Contact your bank immediately and tell them what’s happened. Many have dedicated fraud helplines or chat features.

Your bank will refund you if you’ve been on the receiving end of fraud, unless you’ve been considered to be ‘grossly negligent’. What counts as gross negligence changes all the time, so always be as careful as you can.

Finding an online bank account

Most of the high-street banks you’ll see when you compare current accounts offer online banking, as well as online account opening. You’ll be able to see whether you can access the account online when you compare savings accounts with us.

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