Online current accounts

A current account is a type of bank account designed for day to day use, such as paying bills or receiving wages, and they usually include a cheque book and card for making withdrawals from the cash machine network. Most people now have a current account, and more and more are using them online as they get the added benefits of being able to manage their accounts at any time of day or night and from any location that has a computer. There are lots to choose from, so if you are thinking of using an online current account, consider the following points before you choose a provider.

• Consider what features are important to you

  There is a lot of competition between online providers, and all offer a wide range of features in the hope of getting your business. If you keep a fairly large amount of money in your account and don’t spend it very often, then consider an account offering a higher interest rate. On the other hand, if you regularly use your overdraft look for an account that does not charge for this. There are also more specialised accounts that tie in with your personal views, from those that offer green and ethical guarantees to those that comply with religious rules.

• Don’t pay for what you don’t need

  In the UK, most current accounts are free to operate as long as you stay in credit or within your agreed overdraft limit. However, a few do have monthly charges just for having the account, and others charge for account upgrades that offer features such as ‘money off’ deals or ‘free’ travel insurance. If you don’t need these features, don’t pay for them.

• Understand the terms

  Make sure that you can meet the terms of the current account before you sign up. Some accounts can have conditions attached, such as paying in a certain amount of money every month or only giving an interest free overdraft for a short time. If you can’t deposit the required amount every month or you intend to use the overdraft for quite a while, then you may end up paying charges that you hadn’t bargained for.

• Security

  Online providers should all meet the industry standards of security for their sites. If you are concerned about the risks and you want additional security, look for a provider that offers this. Some take the approach of giving their customers devices that generate a new code every time you want to log in, while others might offer to send you an email or text message whenever there is activity on your online account. You just need to choose the one you will be most comfortable with.

• Word of mouth

  Ask friends and family who they use for their online banking, and what their experiences are. This is a good way to get honest opinions and can give you an idea of how well the account will suit your needs.

Choosing the Best Current Account

It is perhaps the one financial instrument that we use the most and think about the least: the ‘humble’ current account. Just about every adult in the UK has one and very few of them will ever switch from the one that they have been using for years. This is quite a sad state of affairs since it is quite likely that the account in question (i.e. the one that you’ve had since you started working!) has horrendous overdraft charges and pays very little interest.

It does not have to be like this however. The UK market is flushed with innovative banking products offering exciting features and incentives that could be of real benefit to you. It is also much easier to change accounts than you might think.

So what should you look for in a current account? The answer is that it would be best to find the one account that would fulfil your individual needs the best. There is no ‘one size fits all’ solution when it comes to choosing a bank account. Part of finding the best ‘fit’ would be to determine the usage patterns on your current account. The big question that you will have to answer is how much of the month, if any, you are overdrawn.

If your bank account is always in the black it would perhaps be best to change to a high interest account.

Finding a high interest account (This obviously refers to ‘high’ when compared to other current accounts) is much easier than it used to be as the intense competition in the current account market is forcing banks to offer better rates of interest. Before choosing a specific high interest account it is worth looking at what exactly is meant by ‘high interest’ and if it applies to all the funds in the account or not. In some cases the amount that attracts higher interest is capped at a certain level, while other banks will only pay higher levels of interest if you deposit a certain minimum amount in the account every month. It is possible to get around these issues (e.g. by transferring funds above the cap into a savings account and by making sure that you salary is paid into your current account) but it would perhaps be better to find an account where you are not faced with the hassle of having to do so.

If you make regular use of your overdraft you should perhaps aim for an account that is flexible and relatively cheap when it comes to charges and interest payments. Some accounts offer interest free overdrafts and can therefore be a very good option. You should be aware however that the charges and fees to make use of the overdraft can often be very high, cancelling out any potential interest saving. Another option would be look for a fee-free low interest overdraft. Here you will have to pay interest but at least you will know exactly where you stand and how much you are paying (as opposed to accounts levying daily charges, which can be very confusing)

One last thing to consider before making a final decision about an account is the kinds of incentives and optional extras that you would like included with your account. Do you want an account that could earn you loyalty points? Does your bank have to have a ‘bricks and mortar’ presence or are you satisfied with an online only service? Do you need a cheque book? Answering these kinds of questions will help you a great deal in making your final decision.

Once you have made your decisions about where you want to switch to the process should be fairly straightforward and painless and you can expect that your new bank will do as much as possible to assist with a smooth transition.

Summary:

• Most people stick with one bank account for a long time. This is not a wise financial decision since there is usually a lot to be gained by switching accounts.
• If your account is mostly in the black it would be wise to make sure that you select a high interest account.
• If your account is sometimes overdrawn the choice will normally be between accounts that charge no interest but that does levy fees and charges and account that do not normally have fees but that do charge interest.
• It is much easier to switch accounts than most people realise.

A Brief Guide to Internet Bank Accounts

The rise of the internet made radically new ways of doing business possible. One area where this was most keenly felt is the banking sector. With the internet came bank accounts linked to the web that allowed users to interact with their account, and do basic transactions, while online. Some financial service providers went one step further and started creating ‘virtual banks’; that is banks without physical ‘bricks and mortar’ branches. The accounts offered by such internet banks are ‘Internet Bank Accounts’ in the ‘pure’ sense of the word as they are not merely traditional accounts (i.e. accounts held at a physical bank branch) linked to the internet, they ‘exist’ only on the internet.

A large part of the motivation for the setting up of internet banks was cost. It was felt that the lack of physical infrastructure (in the form of a branch network) would lead to significant savings, some of which could be passed on to customers in the form of better interest rates. It is still often the case that ‘internet only’ accounts offer some of the best rates on the market. It will however, as with anything else, be worth your while to do a bit of research in order to find the best deal for you in your specific circumstances.

The advantages of Internet Bank Accounts are:

• Better in interest rates (in many cases)
• The ability to do your banking at any time
• There is no need to travel long distances (if you live in a rural area for example) in order to visit a bank branch.

The main drawback of internet accounts is linked to one of its strengths namely the lack of branches (which can lead to cost savings and better interest rates). If something goes wrong with your account there is not a branch that you could go and visit to sort out the problem. You will instead have to get on the phone to discuss the issue with someone in a call centre. This can potentially be a very frustrating experience.

Some of the things to consider before choosing an internet account are the following:

• How easy is it to use? If you open an internet account you will spend a significant amount of time on the web managing your account. If the site is slow and complicated it will obviously make your life quite difficult. It is therefore always a good idea to get a few recommendations on ease of use from a few (non techie!) friends before making a final decision.
• What is the fee structure? Some accounts are quite expensive to manage, to the point of charging per transaction for basic things like transfers or setting up bill payments. It is therefore a very good idea to read the ‘fine print’ about charges before signing up.
• What restrictions are there on the account? Online banks operate in an environment where there are significant security risks. They protect themselves by making use of encryption but also by sometimes placing limits on account activity (e.g. the number of transfers allowed per day, the amount you can transfer per day etc.). It could be that you are very comfortable with this kind of arrangement. However some people might find it too restrictive.
• How much interest will I earn? One of the main reasons that people choose internet account is the relatively high interest that they can earn. It is therefore a very good idea to research the best rates and to make sure that the rate that you are being offered is permanent and not just introductory.

Summary:

• Internet bank accounts allow customers to do their banking without having to set foot in a local bank branch.
• Some internet accounts offer very good interest rates linked to the savings made on maintaining a branch network.
• It pays to shop around to find the best account for you
• Ease of access and the cost structure are two of the main things to consider when choosing an internet account

Online current accounts offer flexibility

With the flexibility offered by online bank specialists, many consumers have access to excellent benefits from online current accounts. There are some nice general purpose current accounts that provide the basic ability to save funds, protect cards, have cash card access, and safeguard your money. However, leading online current accounts providers typically offer a wide array of specialized account options as well.

The benefits of current accounts are set up based on the unique situations of given consumers. Some of the more popular types of advanced current accounts include: Life insurance benefits, international bank accounts, student bank accounts, graduate bank accounts, children’s accounts, extended warranty opportunities, and identity theft advice and protection. Each type of niche account offers product provisions tailored to the unique needs of the consumer. Protections and special benefits are more valuable to users when directed toward their specific situations.

Finding your best product option is quite simple thanks to the access to online current accounts. Leading providers now allow consumers to complete questionnaire or online assessment forms which help in the selection of the best products. Top providers also allow for a 14 day cooling off period, or longer. This allows the customer to decide whether the account is right in order to get a refund of any account fees if a change is requested. The flexibility to make changes for a more appropriate account should be considered when exploring providers.

One important consideration in selecting the best account is to compare the benefits of various accounts. Interest rates on savings or funds held in the account are an obvious factor. The more the consumer can earn on funds held in deposit, the better opportunity there is for financial gain. Account fees and other costs for maintaining accounts are also important. Additionally, the added benefits and perks provided to specific customers by the niche accounts gives direction to the right account for a customer. Some people need better benefits for international or travel use. Students need low costs for account use. Others with more savings need to earn the most they can from held funds.

Be sure when exploring account options that the provider is included in the Financial Services Compensation Scheme (FSCS). The FSCS protects up to 50,000 Pounds in deposits. This protection should give the consumer confidence that funds held in deposit are safe even if the bank goes under. Any reputable provider of current accounts should be covered under the FSCS. This security is obviously important to avoid the loss of moneys held in deposit.

When shopping online current accounts, remember to keep the following important suggestions in mind:

• Use quote comparison tools from the online provider to find the best niche product for your given situation
• Explore extra benefits offered by niche accounts that give the account better value
• Expect the account provider to offer a cooling off period so you can be sure the account is the right fit
• Watch for the FSCS protection to be sure your cash is safe

Choosing an online current account

Banking over the Internet has transformed the way many people deal with their personal finances. Online current accounts mean people have access to their cash 24 hours a day, seven days a week, 365 days a year. They can also move money around and pay bills however they choose. All this means people are potentially more in touch and in control with their money than ever before. But the virtual high street is now as competitive as the one in the real world, and it can be difficult to know which bank to choose.

Applying for online current accounts is done in much the same way as regular banking. If you have a current account with an offline bank the chances are they will already be able to offer you Internet banking free of charge. Some banks exist only on the internet, or are internet versions of big high street names.

Running an account online has posed security questions, and fraudsters have attempted to break into people’s accounts by sending them emails pretending to be from their bank. This is sometimes known as phishing - remember your bank will never send you and email asking you to confirm your security details. If you get one like this, the general advice is to ignore it, or contact your bank via phone if you are unsure about its authenticity. Banks also keep records of the various ways people try to commit fraud, so reporting phishing is important for prevention.

Banks will provide various ways of protecting online current accounts. Your security is also their security, so you will normally be provided with a unique serial number or user name and password. This is normally just one level of protection, and an account can also involve second passwords with drop down menus so you can select the characters rather than type them. Some providers even supply code generators to customers, which someone uses to get a digit based password, which must match up with the one active on the account at that time.

One of the main benefits of online accounts is that firms have found running a bank over the Internet can reduce costs. Its usability and smoothness means customers can do many things they would previously have had to go to a branch or ring a phone line for. This means banks have tried to tempt customers with attractive initial interest rates.

Not only can you see an up to date version of your bank statement, potentially eliminating the need for paperwork, online current accounts can offer many extras including text message updates and even SMS warnings when you are about to go over your overdraft limit. Some will issue a charge for this rather than providing it for free, and people who like to be as in touch as possible with their finances might want to check what is included with each potential package. Once it is set up however, a bank account online can reduce the need to join frustrating queues at the branch, and waiting on the end of the phone listening to a banal hold tone can also become a thing of the past.

Online Current Accounts Explained

Given that we now live in a digital age in which a large number of people have access to the internet twenty-four hours a day, seven days a week, it should come as little surprise that online current accounts are rapidly increasing in popularity.

While some people decry the fact that it’s taking the human contact out of banking and it’s a step away from the old fashioned face-to-face values, that kind of nostalgia really has no place in today’s banking marketplace. When was the last time you had a pleasant chat with your bank manager? The odds are, it’s been a while. Using the latest technological advances allows you to streamline your financial transactions to suit the world you live in – no rushing to the bank before closing time, no being unable to access your funds during the night or on Sundays, and no dealing with irritable or poorly-trained bank tellers (a minority, but they’re certainly still out there). Online banking allows your money to work for you, not the other way around.

Setting up an online current account is, generally speaking, very simple. It usually involves going to the site of the banking institution in question, answering various questions about what you need from your account and personal details. Once that’s finished, it’s as easy as choosing a password and printing off a form to sign and send in – thanks to the fact that digital contracting is still in its infancy, you still need to have an actual pen-and-ink signature to make the whole thing official.

It all depends on what kind of service you’re after, of course, but it’s not at all unusual to find banks and other financial institutions that offer better deals for people who use internet banking services, including online current accounts. This usually comes in the form of higher interest rates on your savings, but banks are free to offer the same kind of incentive they do with any other kind of account, be it telephone or in-branch banking. Check to see what the terms are before you sign up, and make sure you’re getting a good deal.

Of course, one of the main advantages of an account like this is its functionality. Once you have the ability to move your money around at the click of a mouse, it’s easy to find the best deal possible, as well as to keep track of your income and expenditure over any given period. Additionally, up-to-the-minute electronic statements means that, should anyone be making unauthorised withdrawals from your account (as a result of, for example, identity theft), you can find out right away. For the computer literate, there’s really very little to lose by embracing the future of banking.

That doesn’t mean you shouldn’t still hunt around and make sure you’re getting the best deal, but for those in the know (and for those willing to learn), online current accounts can be an extremely simple way of saving both time and money – and in these financially-shaky times, who couldn’t use a little extra of both?