Online Banking Guide

 Online Banking Overview
 Online Banking Special Offers
 How To Choose Online Banking
 Online Banking Regulation
 

Online Banking Overview

Top

There is now a vast array of bank accounts for the consumer to choose from, with every bank, building society and Internet off-shoot keen to throw their hat into the ring. Yet despite this profusion of choice , bank accounts can still be divided into two basic types:

• Current accounts - give you instant access to your money and allow you to manage your day to day finances in the branch, over the phone or through the Internet. Current accounts allow you to make and receive payments as well as to deposit and withdraw cash. These accounts come with cash-point/ debit cards, cheque books and the ability to set up direct debits and standing orders to automate your bill payments.
  
  
• Savings accounts - serve to protect the money that you have set aside for a future purpose and usually offer higher interest rates than the current accounts. Savings accounts come in different forms from the Instant & Easy Access Accounts through to the Notice and Term Accounts, which offer the best interest rates.

• A £40-£50 reward for switching your account, or for getting a friend or family member to open an account with your bank.
  
  
• An introductory period with reduced fees and charges - such as an interest free overdraft (up to a certain amount) and a period without service charges for a premium or foreign currency account.
  
  
• Student accounts being offered with interest fee overdrafts (within agreed limits), free advice on money management and discounts on insurance and gifts such as record vouchers. Some banks also offer 'graduate accounts', whereby these privileges can be extended for another 2-3 years.
  

• Access to your account - you can run a current account through a bank branch, over the telephone and via the Internet. You only need a local branch if you regularly deposit cash or cheques - otherwise withdraw cash from an ATM and manage your account online or by 'phone.
  
  
• Branch and ATM network - some international banks operate virtually without branches, but offer access through the international ATM networks and support by phone. Thus, Lloyds TSB has some 2,200 branches in the UK, whilst Citibank has 5.
  
  
• Interest rates - not only do interest rates vary from one account to the next, but some premium and foreign currency accounts will only pay interest on a minimum balance. Most high street current accounts only pay 0.1% per annum, whereas some 'instant access' accounts will pay up to 5%.
  
  
• Fees and charges - many specialised accounts include a bevy of additional features - but these often come at a price. You may incur monthly charges merely for the privilege of having a premier account, without actually getting any real benefit from the extras on offer.
  
  Banks will impose hefty fees for even the smallest breach of limits on credit cards and overdrafts - and these fees have risen massively in recent years. If you are permanently reliant on your salary to clear an overdraft, you should be extra-vigilant of these penalties before opening a new account.
  
  
• Additional services - many banks offer 'extra' services - at additional cost. If you are simply looking for a basic account to meet your everyday banking needs, you should avoid the more deluxe accounts. Bear in mind that many of these extras, such as insurance, are often available cheaper through other channels.