WHAT TO LOOK FOR IN AN ONLINE BANK GUIDE

Interest Rates

What rate of interest is paid on credit balances in your current account? This is important if you're normally in credit from month to month, so try to estimate your typical average balance. Most banks will allow you to move money from your current account to a high-rate savings account whenever you like - this is particularly easy to do online. With some, you can even request that any funds over a certain amount are automatically transferred ("swept") into another account to earn more interest.

Charges

Sometimes overdrafts are necessary. If you think you'll need to go into the red fairly often, you should consider the charges for being overdrawn. And if you occasionally find yourself facing a really dire month, check the rates for unauthorised overdrafts, as these can be truly astronomical. (Best to phone them to ask for an increase in your overdraft facility in this situation, eh?)

Hours of Operation

Are you a night owl? Most online banks claim to operate 24 hours a day, 365 days a year. However, they generally go off-line in the dead of the night to do upgrades and things. Some actually close from midnight to 6am. If this is when you're likely to want to do your banking, then these won't be for you.

Statements

Do you look at your bank statements? Would you, if they were available online? Some banks offer online statements going back for several months, while others only offer the current month's transactions. Think about which you'd prefer.

Paying Bills

Your telephone bill lands on your doormat, but it's not due to be paid for two weeks. Will you remember to pay it on time, or would you rather set up a payment to be made in two weeks' time? Most - but not all - online banks offer a "bill payment" facility. However, if you tend to pay all your bills by direct debit, you don't need to worry about this.

Standing Orders and Direct Debits

Do you want to be able to set up, amend and cancel standing orders online? Not all of the online banks allow you to do this. At the moment, direct debits have to be set up with the company you're paying. Generally, this means that you can only cancel them online. However, there is a scheme that is intended to take the headache out of transferring all your direct debits to a new bank. Basically, you send the bank a mandate for them to act as your agent in contacting all the payee companies and transferring the direct debits. The scheme's been pretty successful and the Banking Code has introduced new standard for switching accounts, where the banks do all the work for you.

Efficiency and Service

Do you remember the "Chance" card in Monopoly that says "Bank error in your favour, collect £200"? Unfortunately, the reality is rather different! When a bank error favours you, the bank invariably spots it and takes the money back, so it's clearly important that your bank is efficient enough not to make mistakes. Unfortunately, it's difficult to know who is good and who is bad in this respect, but you can get a rough idea of how efficient they are by contacting them. Did you get polite and prompt responses? Are the features on their website easily accessible? Is the website fast or slow? If service is important to you, make this one of your top criteria.

Online banking guide...
What to look for in an online bank...
Online banking security guide...