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A guide to online banking

A guide to online banking

Online banking has many meanings. For some people, it means checking your savings balance on the internet. For others, it means switching to a digital-only bank, downloading an app and never setting foot in a branch again. In this article we take a look at the options out there and the pros and cons of banking online.

Anelda Knoesen
From the Money team
minute read
posted 18 NOVEMBER 2019

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 of 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 phone apps, so you can do the same things on your smartphone. Just be aware that 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 banks offers what you need.

The benefits

  • Ease and convenience. You can manage your money 24/7 with no need to visit a bank or wait for cheques to clear. 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 saves the bank money, but  has the added benefits that it might make your filing easier and could save a few trees. 

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.

You can often find online-only versions of savings accounts like ISAs and fixed rate savings accounts.

Digital banks – the “challengers”

The newest type of bank has no branches on the high street. The 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. As of July 2018, Atom Bank only offers savings accounts and mortgages, while Monzo only offers current accounts. But both have plans to expand quickly.

The benefits

  • Preferential rates. Digital banks often offer attractive rates on savings, as well as things like making card payments abroad.
  • Convenience. Banking via an app can make it easy to make payments or check your balance.
  • 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.  

Is online banking secure?

No bank account is completely secure from fraud, online or not. But according to Financial Fraud Action UK, the vast majority of payment fraud in the UK (80%) is card fraud – not online banking fraud.

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.

Of course, you’ll need to do your bit too. Here are some top online banking tips to help your accounts stay 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. If you have to set up a password or PIN, it should be hard to guess and different from passwords you use for anything else.

What happens if something goes wrong?

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 banking account

When you compare savings account swith us, it’s easy to see whether you can access the account online. Use our simple comparison tables to find an online account that suits you.

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