Best online bank accounts

Most traditional bank accounts in the UK today offer some form of free online or mobile banking that can be accessed using your computer, laptop, tablet or mobile phone.

Known as digital banking, this lets you access almost every banking function at any time from any place – even outside your bank branch’s normal opening hours or if you’re travelling abroad.

What is an online bank account?

An online bank account is simply one that can be accessed online via your bank’s website. The majority of banks now offer online banking, allowing you to make payments, check your balance and transfer money between accounts simply by logging into your account online.

The layout and functionality of online banking differs depending on the bank you choose, as does its user-friendliness: some websites are much better than others.

What is a mobile bank account? 

A mobile bank account works in the same way as an online bank account, but rather than logging on via your laptop or desktop computer, you can access your account by using your smartphone or tablet. 

As well as logging onto your bank’s mobile website via your phone, you can download and use your bank’s mobile banking app to carry out your transactions. Additionally, you can often sign up to text message (SMS) banking to receive alerts from your bank when payments have been made or when your balance reaches a certain level, for example. 

What can you do with online or mobile banking? 

Below is a list of some of the typical (and free) things you can access via online or mobile app banking:

  • Check the balance on your accounts, including any savings accounts, joint accounts, children’s accounts, or credit cards you have with the same bank

  • Check transactions both in and out of your account

  • Check and download statements to your device

  • Send payments to individuals or pay a bill

  • Move money between your own accounts

  • Set up, amend or cancel direct debits or standing orders

  • Access and activate any relevant offers with your account, such as cashback or discount offers

  • Send and receive secure messages to and from your bank or building society

  • Set up email or text alerts – for payments due or when you are near your overdraft, for example

  • Inform your bank that you are going abroad – so that they can activate your card(s) if applicable

  • Contact your bank regarding any problems with your account

  • Change your personal or security details

  • Upgrade your bank account

  • Apply for other banking products, such as overdrafts, savings accounts, credit cards, insurance, etc.

  • Locate nearby cash machines and branches

What is a virtual bank account?

While online and mobile banking allow you to carry out transactions digitally, many banks that offer these services still have branches that you can go into should you need to manage your money or set up an account. 

A virtual bank, on the other hand, exists only online, which means there are no bank branches at all. Because of this, many virtual bank accounts offer more competitive interest rates and lower fees.

How do you open a bank account online?

If you are switching to a new account, opening a bank account online is easy. Simply visit the website of your chosen bank and fill in the application form. You’ll need to provide a few personal details, as well as proof of ID and proof of address. Some banks, such as Barclays, have made this easier by allowing you to upload a photo of yourself for ID purposes via its app. 

Once your application has been approved, your bank will send you everything you need to get started with digital banking, including your login details. Once you have received everything (there’ll usually be a few separate letters), simply grab your computing device of choice and follow the instructions.

How do I choose the best online bank account?

The easiest way to choose the best online bank account is to shop around and run a comparison. If you need to use an overdraft, be sure to compare how much interest you will be charged and what the overdraft limit will be. If you don’t need an overdraft, check whether you can earn interest on your balance instead. 

You should also factor in whether there is a monthly or annual account fee, and check the eligibility criteria - some accounts will require you to pay in a set amount each month or have a certain number of direct debits going out of the account. 

What are the benefits of banking digitally?

If you have managed your banking in-branch for years, or just don’t fancy the idea of conducting your financial transactions on a computer or mobile phone, it is easy to overlook the benefits of online banking – of which there are myriad:

  • Your account information, and all the associated functionality, is always available, not just within banking hours – including access to old statements

  • No queuing at busy times in your bank/building society

  • You can access your banking information at any time from abroad

  • You can see immediately if any fraudulent activity has occurred on your account, rather than having to wait for a monthly statement, and can inform your bank immediately

  • You can avoid any potential overdraft fees by spotting unexpected payments and tracking your available balance in almost-real-time

How do I make the most of digital banking?

As well as the benefits of online banking, there are a few things to bear in mind when using online or mobile banking:

  • Choose a strong password for your online banking that cannot easily be guessed. Stay away from using any part of your name or your date of birth, and don’t reveal your username or password to anyone. Your bank will never ask you for your complete username or password, though they will ask you for fragments of them.

  • You should never use a public computer to access your online banking. If a public computer is your only option, make sure you log out from your internet banking, and if possible clear your cookies and browser history.

  • You should never log in to your internet banking via your email inbox, even if the email claims to come from your bank, as it may be fraudulent. Always type the address directly into your web browser.

  • Once online, ensure that the bank pages you are visiting are secure. One easy way to check is to look for a closed padlock to the left of the web address, and to ensure that the web address begins ‘https’, which indicates a secure connection.

  • Always ensure that you install the latest operating system and app updates on your computer or mobile device.

Finally, to ease any concerns you may have, most banks offer some form of guarantee against financial losses caused by online fraud. So long as you have done your very best to guard against it (don’t reveal your username or password to anyone else and inform your bank the minute you realise something is amiss), your bank will refund you in full.

15 December 2020