An online financial literacy resource
Return to standard version of site
Jump past menus to main page content

Online banking

What is online banking?

Online banking allows you to manage your money without having to go into a branch of your bank or building society or pick up the phone and speak to someone. Instead, you use a computer to log on to the Internet and connect to a secure website belonging to your bank or building society.

Using your bank or building society’s website, you can complete most of the banking transactions that people use in day-to-day life. These include checking balances, paying bills, managing direct debits and standing orders, transferring money and ordering cheque books and statements.

It is also possible to apply for and manage credit cards or loans over the Internet as well as other financial products such as mortgages and insurance.
 
What are the benefits of banking online?

Convenience
When online banking became available in the late 1990s it caught on quickly. One of the main reasons for this is that it is incredibly convenient.

• You don’t have to visit a branch and spend time queuing every time you have some banking to do.

• You can do your banking without having to leave your home or office.

• You’re not confined to banking hours, which means you can do your banking when it suits you, even in your pyjamas in the middle of the night if you want to.

• Instead of waiting for statements, you can view recent transactions online, which helps you manage your money.

Cost effective
When you bank online, you help your bank or building society cut down on paperwork and administration. This means they can work more efficiently and save money. Because of this, you often get better deals over the Internet than you would if you walked into a branch. For example you may get higher interest rates on savings.

How easy is online banking?
Most online banking sites are quite simple to use even if you don’t have much experience with a computer. They also have a help section on the website, which should explain how the site works and help guide you through transactions and other features. Most online banks also offer email and telephone support if you need further help. You can use our online banking simulator to build up your confidence before you try the real thing.

Is online banking safe?
When online banking first started, there were a lot of concerns about how safe it was. We worried about people hacking into banking websites or our own computers and getting hold of our money or personal details. But a security breach would be a disaster for a bank or building society and they go to great lengths to make sure their websites are robust and secure. Because of this, most of us are confident to use online banks these days.

What the banks and building societies do to protect you and your money

• They use sophisticated encryption to convert all your information into code before it is sent over the Internet. This means that if someone does manage to get their hands on it, they won’t be able to read it.

• Some online banking sites have started to put other security measures in place before you can access your accounts. For example, you may be sent a handheld device that reads your bank card. Every time you log in you’ll need to slot your card into the device and key in your PIN number.

• If you enter your details wrongly more than three times, most online banks will stop you from trying again. You’ll have to ask your bank or building society to reset your log in for you. This is a security measure to stop fraudsters from repeatedly entering details.

What you need to do to protect yourself and your money
It is also vital that you take security seriously.

• Keep details such as your username and password secret. Don’t write them down or leave them where others can find them. If anyone does manage to get hold of your details, they will probably be able to get into your account and at your money. It’s easy to change your password if you think someone may know it.

• When you have finished banking, always log out immediately. Most online banking sites will log out for you if you are signed in to your account but haven’t used it for a certain period of time, for example 15 minutes. But don’t rely on this. It’s always better to log out yourself.

• If you are using a computer in a public place, for example a library or Internet café, make sure you are not being watched while you are online. Also have a quick look to make sure there isn’t a CCTV camera pointing at the screen.

• Never send emails containing passwords or account numbers. The information isn’t encrypted so anyone intercepting the email will be able to read them.

• Watch out for bogus sites and scams. It is quite common to get emails that claim to come from banks. They ask for your security details or tell you to click a link to a site where you need to enter them. These are called ‘phishing’ emails and are sent by fraudsters hoping to trick you into sharing your personal details so they can try to get at your money. Your bank or building society will never send an email asking for your personal details or with a clickable link so if you receive one, delete it straight away.

• If you do think you have been a victim of fraud, you should contact your bank or building society immediately.

Try our online banking simulator

We have an online banking simulator that can help you build up your confidence and get to grips with online banking before you try the real thing. Click the link above or the image to the left to start the online banking simulator.