In the last few years there has been an explosion of new digital (or ‘online-only’) banks, which are fast changing the banking landscape. Making it easier for customers to carry out their everyday banking the digital space, they are challenging the traditional banking powerhouses, making them rethink the way they do business.
In a world where almost everything we do is now online (shopping, learning, socialising, gaming etc.) it makes sense that our banking too should be easy, accessible, and digital. If you’re thinking of making the switch to an online-only bank, or of opening up an additional account with them, then here’s the low down on the banks that we think you should be considering.
What are online banks?
Before you look at the banks that are right for you, first you should have solid grip of what online banks actually are.
Essentially, they are bank that doesn’t have a ‘bricks and mortar’ branch. Rather, they exist only in the digital space. Everything from paying bills, depositing cheques, transferring funds, and taking out loans, is all done online.
Because of this, they have lower overheads and so are able to offer their customers lower fees (in fact, many are completely free to have an account with; a huge plus for potential customers.) and higher rates. This is because they don’t have the staff and floor space costs that traditional banks do.
Our favourites compared
We’ll be comparing our favourite online banks across three different categories
- The cost of doing business
- Services provided.
Safety: There is an option to immediately freeze or unfreeze your card in the app if it has gone missing. You can also turn contactless payments on and off as you wish.
Cost of doing business: Their standard account is totally free. They also provide a Premium account that is £6.99 a month if you want extras like 24/7 customer support and overseas medical insurance.
Services provided: They provide a contactless Mastercard that is totally fee-free in over 130 countries.
Fast, free and secure money transfers to bank accounts in over 140 countries.
You can buy, hold and exchange Bitcoin, Ether and Litecoin.
They provide a variety of (free) savings options from a ‘savings vault’, to a currency round up feature and recurring payments.
Finally, they provide a great split bill option if your friends and family have the app too. Allowing you to digitally split bills, or restaurant cheques in real time.
Safety: The FDIC insures your Ally Bank deposits up to the legal maximum limit of $250,000.
Cost of doing business: Their online savings account is completely free.
Services provided: Their online account comes with no monthly maintenance fees or ATM fees.
They provide a 24/7 live customer support.
Provide self-directed trading options for would be investors.
You are not required to have minimum balance in your account.
You can also deposit your cheques remotely.
Safety: You can block or unblock your card, set permissions and limits, and make other security changes directly from the app. You can also get a push notification immediately after all account activity including card payments, ATM withdrawals, direct debits and transfers so nothing happens without your knowledge.
Cost of doing business: Their standard bank account is free, with options to open either an N26 Black account for €9.90 a month or an N26 Metal account for €16.90 a month, each of paid versions coming with extra perks such as free foreign Mastercard withdrawal, and various insurance covers.
Services provided: You have unlimited withdrawals from any ATM without fees.
An online account with debit card included.
International transfers into 19 foreign currencies for a lower cost than traditional banks.
Automatic categorization of your spending, providing an instant breakdown and details picture of where your money goes.
Safety: Hello Bank has recently been awarded a number of security stamps of approval including BeCommerce and trust Ecommerce Europe.
Cost of doing business: Their current account is completely free
Services provided: A free Hello bank card for each cardholder and for every account.
You can make euro payments in Belgium and in Europe in the SEPA* zone.
From €9.50 you can customise your bank card.
They also offer insurance, loans, savings and brokerages services.