Everyone is familiar with the high street banks such as HSBC, Lloyds TSB, Royal Bank of Scotland, etc but have you ever heard of banks such as Egg, Smile or Cahoot?

These banks are strictly Internet banks and have no physical presence - they are referred to as 'standalone banks'.

Most internet banks are sub-divisions of high street banks: this may be re-assuring to those of you that may be concerned about security issues.
 
Using an Internet Bank

Because internet banks work solely on-line, they have lower overheads compared to high street banks. This therefore allows them to offer higher interest rates.

The range of services offered will vary between banks i.e. some may offer loans and high interest savings accounts, where some may offer the basics - current account management.

 
When using an internet bank, you will still receive (via post) credit/debit cards/cheque books on request.

Internet banks are orientated around personal banking and therefore may be unsuitable for business banking (due to their inflexibility to business requests and lack of business support and services).

In addition, contacting the internet bank by phone is usually very costly due to the bank wanting all correspondence to be done via the internet.

Why Use an Internet Bank?

Internet banks offer a a cheap and convenient way of managing your finance without having to step outside of your house/office. The added benefits of higher interest rates (outlined earlier) also give incentive to their use. The range of services (leaning more to personal finance services) available is also increasing as Internet banks aim to become more convenient and competitive (especially with high street banks with their Internet banking facilities).

You do not have to be a computer wizard to set up an on-line account: the process is usually very straight forward and is done in a matter of minutes.

Perhaps the only difficult part of using an Internet bank is choosing which one to use...

Which One do I Choose?

We have provided some links to the most popular Internet banks below. However, if you currently bank with any of the High street banks listed, you may decide to stay loyal if you are happy with their service and rates. Alternatively, you may decide to venture elsewhere and enjoy their differing rates and service quality.

Before you make a decision, it is worth browsing the sites and seeing for yourself how compatible and flexible they are to your requirements. Keep a tab on how easy the web site is to navigate - does it download quickly, etc.