Online banking has come a long way from its early beginnings, and at present almost all UK banks provide online banking services to their customers. At the same time, there are several banks that exist as internet only banks while providing almost all the customer services provided by their traditional banking counterparts. Among the online banks, some consider that Cahoot, Smile, Halifax, Intelligent Finance (IF), Nationwide and Egg are the top rated online banks in the UK.
Owned by Abbey National, Cahoot bank operates as a separate entity from its owners. The products and the services offered by Cahoot are different to those of its owner bank although it provides its customers a full current account with all the services expected of a traditional high street bank. Being a fully online bank, it offers 1.65pc for its current accounts while savings accounts attracts around 2.00pc for balances up to £50,000.
Smile Bank is an internet only bank owned by The Co-operative Bank. In terms of offering fully operational current accounts, savings accounts and credit cards, Smile Bank can be thought of as the UKs first. It is popular among many of its clients because of the banks ethical banking policy, which turns down potential customers with links to tobacco trade, animal testing of cosmetics, arms trade and other similar unethical businesses as perceived by the Smile Bank. It offers 2.27pc for its current accounts and a savings rate of 4.75pc. Many consider Smile Bank to be one of the best online banks in the UK.
Halifax Bank is a banking chain in the UK which is considered a division of The Bank of Scotland. It offers a web saver savings account that offers 5.50pc including a special bonus. At the same time, the online features offered by Halifax Bank include, e-statements, control of direct debit, standing orders, bill paying, overdraft, control share dealing, loans and savings accounts.
Established as a division of Halifax PLC, Intelligent Finance (IF) is a web and phone based bank. Although the rates are relatively low when compared with the best online banks, it can be considered reasonable when compared with many other online banks. It offers 2.25pc for its current accounts while the savings accounts offer around 4.55pc.
Ranked among the best online banks in terms of its security features, Nationwide offers its customers around 3.5pc in current accounts while the savings accounts receive around 5.05pc. Many consider Nationwide to be a reasonably good internet bank with useful functionality made available through its web site.
With its new design, the internet bank Egg has become much speedier in its functionality although it does not offer current accounts to its customers. However, savings and investment account are offered through Egg and the gross rate for savings accounts is around 4.75pc.
When looking at most of these online banks, it is prudent to assume that, many internet banks are functioning as the online arm of more established high street banks. However, internet banks do offer additional benefits to their online customers and in most instances, such benefits help attract a wider range of customers looking for easy access to their funds without having to stand in front of a bank counter.