Online Banking – Is it worth it?

Computing technology and especially the internet have grown rapidly in the last 10 years, as anyone who remembers the old 56kb dial up connection will attest. In a country where a majority of households have lightening fast broadband we have the world at our fingertips, but should we turn our backs on the high street banks and join the digital revolution?

Gone are the days where everyone knew their local branch manager. In fact local branches are becoming less and less local! We regularly hear of closures to smaller branches in order to maximise profits. Internet Banks like Smile and Cahoot operate solely online, which means they have lower overheads and in turn can offer higher interest rates. These banks have interest rates up to 3.75% which is a lot more compared to the 0.1% interest offered by a majority of high street banks; something to consider if you aren’t happy with the rates provided by your current bank.

You may be worried about the security issues involved with Internet banking and whilst in the past there may have been a few glitches revealing sensitive information, the growth of internet banking has lead to far more secure systems. Some experts even believe the internet to be safer than traditional banking – you can store your statements online so you won’t have personal information lying around. This also saves a lot of unnecessary paper, something to note if you are particularly wary of your environmental impact.

However, because the banks expect all communications to be done via the internet contacting them by phone can prove costly. You may also miss the face to face contact of your local branch; sometimes it is nice to know that there is a real person to assist you, rather than endless emails and automated answer phones.

If you are a technophobe then internet banking is probably not the best option for you as most people like a combination of phone banking, online banking and branch visits. Conversely, if you like the idea of having quick and easy access to your money without leaving the comfort of your own home Internet banking is probably advantageous to you, and as the popularity of Internet banks grow the quantity and quality of services they provide are increasing as they aim to be more competitive with high street banks.

Visit the Alliance & Leicester website to find information on savings accounts.

Honest Johnny - The Consumers' Advocate.