Online Bank Accounts

What is an online-only bank account?

An online-only bank account (or mobile-only bank) is essentially a "normal" current bank account except everything is done online or via your mobile app. This includes applying, viewing all your transactions, statements, transfers and more. Customer enquiries are typically made via chat, email or other similar digital channels. Some digital banks have phone numbers you can call.

How are online-only banks different?

Online banks don't have high street branches like most traditional banks because they are different and relatively new. With online-only banks, you won't be able to speak to someone face to face. However, you may find that digital bank accounts are competitive regarding monthly fees, exchange rates and other costs. They are also part of the Financial Technology (FinTech) revolution, offering innovative tech and tools that may help you control your finances better.

Once your online bank account is set up, most other features are similar to a standard high street bank account - you can still use your debit card to withdraw money from ATMs. You can also use your card to pay for goods in shops and restaurants, as well as set up direct debits. Sometimes savings accounts and overdraft facilities (subject to eligibility) are also available.

What are the benefits of using a mobile bank account?

Mobile banks form part of the current FinTech revolution, offering innovation and tools to help you manage your money. Their apps usually provide a better user experience and are straightforward to use. You also receive alerts in real-time of your spending, and often spending will be categorised so you can see where your money goes.

Online bank account setup and application processes are also more accessible than traditional banking in that there is no need to go to branches, wait in queues and fill in paper forms. You can apply online or on your mobile within a few minutes (many traditional banks are now beginning to offer online application services.

What are the disadvantages of mobile bank accounts?

There are no physical branches; if you need to speak to someone face to face, you will have to do this via chat, email or other electronic forms. Most mobile banks also have telephones numbers you can call.

You will also be limited with certain features like credit cards, mortgages, savings accounts and personal loans. The reason for this is mobile banks are relatively new and are still expanding their product range. While with a traditional bank, you will likely have a full range of banking services available.

Can I have an overdraft with online bank accounts?

Many online only bank accounts offer overdrafts, subject to status and eligibility.  The better your credit rating, the more likely you are to be accepted for lending facilities.

Is mobile-only banking safe?

All bank providers are responsible for ensuring that their apps, websites and services are secure. However, you should still be aware of fraudsters and take precautions against attempts to access your account and funds, irrespective of the banking provider you use. Be aware of fake apps designed to steal your details; only download apps to your phone from approved sources such as the Google Play Store or the Apple App Store.

Avoid using public Wi-Fi at places such as shopping centres, hospitals, trains or buses. Similarly, keep your Bluetooth turned off when you can. Both situations can leave the door open for scammers to access your details. Ensure that your phone requires a pin, key, facial recognition, or fingerprint recognition to unlock it; this will offer you an extra layer of security.

What if I use mobile banking and I lose my phone?

Contact your network provider immediately so they can block your mobile and stop anyone else from using it. You should do this as soon as possible to avoid high costs from calls and data usage and stop thieves trying to access information on your phone. You should also contact your bank immediately. If you use online banking, they will assist you with the next steps. They will also check and monitor your account for suspicious activity. If you don't have your banks' contact details, you may be able to find these on our UK bank directory of lost and stolen numbers.