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Anyone wishing to bank online has a choice between going to an internet start-up or to a traditional bricks-and-mortar bank which offers an online option. Which is best? Here are some questions to ask:
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- Do you want internet banking as an occasionally convenient add-on, do you want the most interactive service, or just a good rate of interest? Some banks expect you to be a customer before signing up to online banking. Others let you join online, and you can open an account but you still have to provide a signed form. Typically it takes a few days to get an account fully established.
- What products are covered?Some banks offer a deposit account as the core product, others the entire gamut of products, including credit cards, overdraft facilities, credit cards, personal loans and ISAs. Institutions that offer internet banking as an add-on service already have broad product ranges.
- How do you bank online?Some do not yet allow customers to monitor credit card transactions and balances, while others exclude their postal accounts. Some restrict the type of activities you can do on savings accounts but offer more interactivity on current accounts
- What online information does the bank display?Among the available options are:
- to include ‘today’s transactions’ in a statement. This shows the balance including payments in and out of the account which haven’t been officially credited or debited
- ’real time’ mini statements for a previous number of transactions, plus full statements showing your balance at the close of business on the previous day.
- the capacity to sort data by ATM withdrawal or cheque credits. Automatic sweep facilities can help save money by reducing bank charges and interest rates
- trigger levels at which money will move around various different accounts, with a monthly statement to cover all holdings.
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Payments
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Moving money between accounts with the same bank typically happens within minutes.
Most internet banking services let you make payment to a third party account at another UK bank. But giving the instruction after a certain cut-off time means the bank won’t carry it out until next day - check this as it could be 3.30pm or 7pm.
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| Clearing system |
Online banking is still tied into the UK clearing system so allow three working days for the payment to arrive (express payments are possible but cost £15-£20). For regular payments like bills, you need to allow time between setting them up and making the first payment, and only a few internet banking providers don’t let you set them up online.
Many providers let you change and cancel standing orders, and generally you can only view or cancel direct debits. You may be able to set up a useful personalised list of payees.
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