Online Bank Accounts

Digital bank accounts are a convenient way to manage your finances. They let you access your account any time, day or night, either online or via an app.

Finding the best online current account for you

By Laura Rettie, Personal Finance Journalist.

Laura Rettie

Online current accounts are convenient for many. Our guide will tell you more about how they work and how to find the best one for you.

What is an online bank account?

Online banking is managing your current account through an online device like a mobile, tablet or computer.

Many traditional banks now offer online banking options through either a website or an app. With an online bank account, you'll be able to access various services from your device conveniently. You can transfer money between accounts, pay bills, set up direct debits, and check your bank statements to monitor your spending, all through an online bank account.

As well as being offered by traditional banks, you can also open online bank accounts from online-only banks, also known as challenger banks.

These banks have no physical branches and operate entirely online. Because they have reduced running costs compared to traditional banks, some online-only banks can offer additional features and benefits.

What features do you get with online banking?

One of the key features of online banking is that it reduces the need for you to visit your bank branch physically to perform specific actions. It gives you more control over your accounts, allowing you to access them whenever and wherever it suits you.

With online banking, you can access your current account at any time, day or night - and you'll often be able to get 24/7 support from either call centres or live chats.

Through an online banking app or website, you'll be able to easily apply for an overdraft, freeze stolen debit cards, and move money between saving accounts and ISAs linked to your account. Without online banking, you'd have to visit or call your bank branch to do these things.

Online bank accounts also make it a lot easier to track your spending. Banking apps usually send you immediate alerts and notifications each time you make a transaction or go over a specified budget you've set.

Online banking, either through a traditional bank or a digital-only challenger bank, is also very secure. By downloading your bank's app, you can use your phone's facial recognition and fingerprint scanners, meaning only you can access your account. You can also set two-factor authentication each time you make an online payment for even more robust fraud protection.

Plus, if you open a current account online with a traditional bank, you'll get FSCS protection, which protects the money in your account up to a value of £85,000. So, if the bank goes bust, you'll still get your money, providing you don't have more than this value stored.

Most online-only banks also have FSCS protection, but it's always worth checking if this is the case before opening an account.

As well as being able to open an individual current account, you'll also be able to create a joint online bank account through the majority of providers. Two or more people can access and manage the money within a shared joint account, making it perfect for couples or families.

Is an online bank account right for me?

Deciding if an online bank account is right for you may depend on your specific needs. If you want to quickly access an overdraft facility or be able to pay others immediately through a mobile device, then it may be a good option.

If you're only looking for an account to store and save money you don't need immediate access to, it may be best to open a fixed-term saving account instead.

If you're contemplating getting an online-only bank account, you'll need to consider if you're comfortable not having a physical branch you can go to for customer support. Although online-only banks may offer a support team through a digital medium, if you value face-to-face interaction, it may not be the best choice for you.

Plus, some functions can be more challenging to perform with an online-only bank account. For example, depositing cash can be a hassle, because usually, you'd take it to a bank branch to be deposited. There are options to pay in cash into an online-only bank, but you may have to pay a fee and take your cash to your nearest paying in point, which may not be local to you.

If you have a low credit score, then the functionality of the online current account you'll be eligible for may differ and could affect if it's right for you. For those with poor credit scores, you'll be able to open a basic online bank account. This won't have an overdraft, and you may not have access to other features.

Should I switch from a traditional bank to a digital-only bank?

You can switch from a traditional bank to a digital-only bank, and providing that it is FSCS protected, there shouldn't be any additional financial risks.

However, despite online current accounts having robust security features, they are still a cyber risk, especially if you're using them when out and about.

If you're using public WiFi, which is often unsecure, or logging into your account through a public device, there's an increased chance your data could be hacked.

This is why many people choose to use online bank accounts for their day-to-day spending and to help them manage smaller budgets. It's wise to keep your traditional bank account to store larger sums of money, such as savings, and then open a digital-only bank account alongside that.

How do I open an online bank account?

Opening an online bank account is usually pretty swift to do.

If you have a current account with a traditional bank that doesn't have online functionality, it should usually just take a quick phone call or chat in-branch to get you all set up because they'll have your details.

If you want to open an online bank account with a different bank or create an account with a challenger bank, you'll need to provide proof of your identity.

You'll have to provide:

  • Two forms of ID, such as a valid passport or driving licence
  • Proof of your address, which can come from a recent utility bill
  • Personal details such as your nationality, previous addresses, marriage status, and more.

If you're going to apply for a bank account online with access to an overdraft, you'll also be subject to a credit check. This may usually be a hard credit check, meaning the bank will check your entire credit report. This will leave a 'mark' on your file that other credit providers will be able to see.

Too many hard credit checks can harm your credit score, so try not to apply for a lot of financial products at once.

To open a bank account online, you need to be over 16 and have a permanent fixed address in the UK.

Can I have more than one online bank account?

You can have multiple online bank accounts if you wish, and there's no maximum amount you can create.

People often use multiple online accounts so that they have an account for a specific purpose. For example, one can be used for household bills, the other for personal use, and another for business expenses.

Some online current accounts require a minimum amount of money to be deposited into it each month to be kept open - such as £1000 a month. This is because these usually offer some rewards or perks. If you have multiple online bank accounts with this requirement, it can quickly become hard to manage them properly.

What are the pros and cons of having an online bank account?

Online bank accounts have their fair share of positives and negatives that you'll need to think about before opening one for yourself.


  • Easier bill payments
  • 24/7 account access
  • Simple fund transfers
  • Spending notifications
  • Conveniently apply for an overdraft
  • Ability to freeze lost or stolen cards
  • Budgeting tools


  • No face to face customer support
  • It can be complicated to deposit cash

Is online banking safe?

Because of their digital nature, online banking will always be susceptible to cyber risks such as hacking or phishing - where a scammer pretends to be your bank to get your details.

However, most online banks have robust security features implemented to limit this risk. One measure is using biometric authentication such as facial recognition and finger scanning to access your online accounts.

All the data within your app should also be encrypted, meaning if a hacker does access it, the data should be scrambled and ineligible. To protect yourself further, limit your use of online banking when on public WiFi, and be sure to log off your account if you're accessing it through a public device.

Financially, online banking is as safe as other traditional banks, providing they have FSCS protection. This ensures that your funds are protected if the bank fails, up to a value of £85,000.

The information provided does not constitute financial advice, it’s always important to do your own research to ensure a financial product is right for your circumstances. If you’re unsure you should contact an independent financial advisor.

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Frequently asked questions

What is the current account switch service?

The current account switch service is a scheme many registered banks are subscribed to where they'll automatically switch over your details, income and outgoings to your new account. This switch should take no longer than seven days and is designed to make switching accounts less hassle. 

This service makes switching from a traditional bank to an online-only bank a lot easier.

Can I get an online current account with bad credit?

Yes, you'll be able to open an online current account with bad credit; however, your options may be limited. If you have bad credit, you may be unable to apply for an overdraft, resulting in you only having a basic current account.

What is FSCS protection?

The Finacial Services Compensation Scheme (FSCS) offers protection to account holders with banks licenced with the FCA. 

If a bank was to go bust and unable to give you the money you've held in your bank account, FSCS protection will be able to cover you up to £85,000 for each account you have. With FSCS protection, any money over the value of £85,000 is at risk of being lost if a bank storing your money was to fail.

Are online bank accounts protected by FSCS?

An online bank account provided by a traditional bank will have FSCS protection, just like any other type of account will have. 

If offered by a challenger bank, which is a bank that operates entirely online, then you'll need to check if they're protected by FSCS, because not every online-only bank has this. 

To keep your money safe, you should avoid using online bank accounts that don't have FSCS protection.