Digital banking has grown massively over the last few years and has overtaken many traditional current accounts offered by banks such as Barclays, HSBC, Natwest and Lloyds.
Many challenger banks have jumped at the chance to impress customers, offering attractive app-based and online banking options which use the latest technology, from accounts offering real-time spending alerts to those with no fees for spending abroad.
What is an online bank?
An online bank offers pretty much all the services traditional banks offer, but instead of going into a bank branch to do your banking, you can do it online – via a computer, smartphone, or tablet.
It means you can manage your finances on the go, from anywhere in the world at any time of the day or night. You can choose a bank that is purely online, without any branches, or you can choose one which has a mixture of both.
Key features of our best banks
To make things simple, here we've picked out some of the key features of the online banks we mention above, so you can easily compare them.
Provider | Overseas Fees | Monthly Fee | Arranged Overdraft (EAR) | App Rating (Apple Store/Android Store) |
|---|---|---|---|---|
1. Chase | No | Free | No | |
2. Wallester Business | No | No | No | |
3. Starling Bank | No | No | If eligible (15%, 25% and 35% EAR variable) | |
4. Wise | No | No | No | |
5. Revolut | No | From £0 | No | |
6. Monzo | No | From £0 | If eligible (19%, 29% or 39% EAR/APR variable) | |
7. Monese | No | From £0 | No | |
8. bunq | No | From £0 | No | |
9. Zopa | No | Free | N/A | |
10. ANNA Money | 1% | From £0 | N/A | |
11. Atom Bank | N/A | Free | N/A | |
12. goHenry | No | 30 days free, then from £3.99 | No | |
13. Virgin Money | Conditions apply | Free | If eligible (fees apply) |
Best Online Banks in 2024
Here we've picked the best online banks you can open online. Most of them also have apps where you can manage your money from your phone.
1. Best overall digital bank — Chase
Chase is a contemporary digital challenger that’s been launched by JPMorgan, one of the largest banks in the US.
So if you have concerns about the safety of your funds with a bank that you're not as familiar with, Chase can put a lot of those to rest. But that's not all Chase has going for it.
It's a solid, all-round choice, with an easy-to-use app, the option to open multiple accounts to help you budget, and excellent 24/7 customer support access — something that some of the more established challenger banks can't offer.
You also get 1% cashback on your everyday debit card spending for your first 12 months (new customers, max £15 per month, cashback exceptions apply).
Key features:
- 3.50% AER (3.45% gross) interest with a linked savings account
- 1% cashback (up to £15 per month)
- No overdraft facilities
- Round-up feature
2. Best for business expenses management — Wallester Business
Wallester Business gives a platform to anyone looking to streamline expense management – giving you access to both virtual and physical cards where you’re then able to control spending for employees and the like.
Whether it’s the lack of initial setup costs or the flexible card issuing, this is a particularly solid option for any business operating internationally or even just with dynamic team structures. The platform’s highly customisable, too: define your spending limits, restrict merchant categories, or even monitor transactions – it’s all possible directly through the mobile app.
Better yet, you’re also able to integrate Wallester Business with whatever existing accounting software that you’re using, so you can keep your expenses both tracked and categorised in real time.
Like most options here, you’ve got the chance of upgrading to premium plans if you’d like something with even more capabilities – enhanced reporting and higher limits, for instance – but the service itself is free and should easily be enough for your business.
Key features:
- Offers free and premium plans to match different business sizes
- Real-time transaction tracking and spending control
- Virtual and physical cards available
- Seamless integration with accounting software
- No setup fees or hidden costs
- Customisable card controls and limits for better expense management
- Supports accounts in multiple currencies
3. Best digital bank for customer service in 2024 — Starling Bank
When it comes to all-rounders, they don’t come much better than Starling Bank. The challenger bank gives users access to a full UK current account that they can manage directly from the app.
It takes only a matter of minutes to get started, and there are plenty of features for just about everyone.
Unlike the majority of the other best digital banks, you get interest paid on your balance, as well as access to an overdraft.
There are many reasons why it's my top pick but if you’re looking for an account you can use as your main current account, you can’t go far wrong with Starling.
Key features:
- 3.25% AER on balances up to £5,000
- No fee for the personal current account
- No unarranged overdraft fees
- No overseas fees
4. Best for multicurrency transfers — Wise
With the Wise borderless account, you get low-cost money transfers that are, according to the company, up to eight times cheaper than regular banks.
You can also hold your funds in over 40 different currencies. So, if you’re the type of person who tends to make a lot of transfers overseas, this could be the account for you.
Similarly, you can receive payment in GBP, USD, EUR, and AUD without paying any fees.
You can also get account details for each of these currencies. Of course, it’s not a flawless system. For those who make regular large payments, you could be better off using a speciality service.
Similarly, if you make a lot of cash payments into your account, you should look elsewhere.
Key features:
- 40 currencies
- No monthly fees
- Cheap overseas money transfers
- 4.66% variable interest rate on money within your account
5. Best for international payments — Revolut
Revolut is one of the fastest-growing e-money institutions in the UK, and for good reason. The feature-laden account gives you access to all kinds of benefits.
Perhaps most notable is the fact you can top up your card in several currencies.
This means if you’re travelling overseas a lot, you can reduce the fees you pay. What’s more, with the premium features of the bank account, you can get free travel insurance. You can also hold your cryptocurrency balance in your Revolut account.
As with Wise, there are no options for paying cash into your account. And, if you want access to the best features, you will need to pay a monthly fee, so you'll need to weigh up whether this is worth it.
Key features:
- 70 currencies
- No overseas fees during the week
- No overdraft facilities
- 2.29% variable interest rate on money within your account
6. Best for effective budgeting — Monzo
Monzo is practically an established name in the digital bank world these days. The company has spent time developing a broad range of features to help you manage your money better.
You can set budgets, create savings pots, and keep money aside for bills.
You’ll also benefit from free overseas cash withdrawals on your card (up to £200 per month) as well as no transaction fees on overseas spending.
Monzo has gradually added other features such as overdrafts, loans, and joint accounts, making it a viable choice as a main account.
However, there are some limits and fees associated with the account. You can only deposit a maximum of £1,000 cash into your account every six months, and it costs £1 per deposit using PayPoint.
Key features:
- Fees start at £3 per month
- No overseas spending fees
- No overdraft facilities
- 4.1% interest rate in its savings account
7. Best for overseas students — Monese
Whether you’re a student from overseas studying in the UK or a local student heading abroad, Monese is a good choice of bank. You won't need to provide proof of address or undergo a credit check to get accepted — all you'll need is proof of ID.
Once you have the app, you’ll get real-time notifications and be able to keep track of your spending with ease.
The Simple plan has no monthly fee, but you can also upgrade your plan and get access to more features in return for a monthly fee.
Accounts can be held in GBP, EUR and RON and you can spend on your card abroad fee-free (up to £2,000 a month for the Simple plan).
You'll also be able to withdraw cash fee-free up to a set limit each month. Unlike some of the accounts on here, you can deposit cash directly into your account using the Post Office or PayPoint — a fee applies for the Simple plan.
Key features:
- Offers a basic free account
- No fees on spending up to 9,000 euros
- No credit checks or proof of address required
- No over-draft facilities
8. Best for ethical banking — bunq
As a relative newcomer to the digital banking space, bunq is trying to do things a little differently.
The firm is actually partnered with Wise, meaning that you get the same great rates on international transfers. Depending on the plan you choose, you’ll get access to instant payments and can make up to 6 free ATM withdrawals per month. Ethical banking is at the heart of what bunq does.
Bunq has a variety of environmentally conscious incentives for their customers. However, there is no free version of the service, and it’s only currently available in Euros.
There are three banking plans to choose from, plus a savings account. The Easy Money plan lets you have multiple EU IBANs and send money in more than 15 currencies.
Key features:
- Six free ATM withdrawals per month
- Send money in 15 currencies
- Sustainable and committed to green incentives
- Prices start at 3.99 euros per month
9. Best for savings accounts — Zopa
Zopa started life as a peer-to-peer lending company but has since gained a full banking licence.
The newly formed Zopa Bank offers savings accounts and credit cards to customers. You can choose from an easy-access account or a cash ISA, as well as five fixed-rate savings accounts, with terms of between one and five years.
It’s quick and easy to get started. You'll need a minimum investment of £1 for the easy access and cash ISA accounts and a minimum investment of £1,000 for the fixed rate accounts.
With the easy access account (Smart Saver), you can split your money into pots — you can choose instant access pots that give you instant access to your funds, or pots that require you to give notice before you access your cash and pay higher interest rates.
Similarly, with the cash ISA (Smart ISA), you can put some money in an instant access pot and some in a fixed-term pot for one to five years.
Because of its banking licence, your funds are protected by the Financial Services Compensation Scheme.
Key features:
- Save up to £250,000
- Split savings into personalised pots
- 4.54% AER in the anytime savings pot
- FSCS protection
10. Best for business banking — ANNA Money
ANNA Money gives you an online business current account with a range of features to help you manage your finances. The account is aimed at SME owners and comes with a Mastercard debit card.
Features include automatic invoicing and invoice management, 1% cashback on your business spend and access to a range of additional employee cards.
If you’re relatively new to the world of business banking, ANNA can help keep you on track with your finances.
You can create pots in your account to save for taxes or other expenses as well as connect any other accounts you have through Open Banking. Choose from a pay-as-you-go plan or pay a monthly fee.
Key features:
- 1% cashback on business spending
- Create personalised savings pots
- £14.90 per month for the business account
- Free for a pay-as-you-go account
11. Best for mortgages and savings — Atom Bank
Atom Bank is another brand that offers a range of long-term savings options, and it also offers mortgages.
You can get set up with a savings account in just a few minutes, and you’ll get a clear view of your funds and interest rates through the app.
If you’re trying to build your savings, Atom will actively encourage you to do so, as well as show you how much your possible returns are.
Choose from an instant access savings account, or fixed rate accounts with terms from six months to five years.
Key features:
- Great for savings accounts
- Competitive interest rates
- Regulated by the FCA (and protection through the FSCS)
- App-based savings account
12. Best for teaching financial responsibility — goHenry
GoHenry is a financial tool that’s designed for children from the age of 6 to 18. The app-based account gives parents access to the account, allowing them to view and control their children’s spending habits.
For the child themselves, they can see their balance and use a prepaid Visa card to make purchases and withdraw money. Every time the child uses the card, you’ll get a notification on your own app.
You can also set up a reward system, where funds are sent to the child's account when they complete certain tasks. The tool aims to help children learn about managing their money while giving parents the control they need to oversee this.
However, there is a monthly fee with the account, with two plans to choose from depending on what features you want.
The cheaper account only permits one free card top-up per month, while the more expensive plan offers unlimited free top-ups. You can also spend and withdraw cash on your card overseas fee-free.
Key features:
- Aimed at helping children with their money
- Reward systems when children carry out tasks
- £3.99 per month for each child
- Free ATM withdrawals
13. Honourable mention — Virgin Money
Last on our list is Virgin Money, with an honourable mention. The free, app-based M Plus account has some great features, making it a good all-rounder.
You'll earn interest at a rate of 2.02% AER (2.00% gross per annum variable) on balances up to £1,000, with interest paid monthly.
Plus you get access to a range of savings accounts and you can earn cashback on your spending. It's free for everyone and takes just a few minutes to set up.
Key features:
- 2.02% AER on balances up to £1,000
- Competitive linked savings accounts
- Free basic bank account
- No credit checks for the most basic account
The safety of UK online banks
Choosing an online bank in the UK is generally considered to be a safe choice, if you follow a few simple rules.
Using a fool-proof password, for example, and being extra vigilant when transferring money to other people or companies. If you're using a bank without a UK banking licence, such as Revolut, it's also important to be aware that you won't be covered under the FSCS which protects up to £85,000 held with one banking group.
Do online banks have ATMs?
Online-only banks usually do not have any ATMs but they operate through third-party companies, such as Allpoint and Moneypass.
There may be fees to deposit money into an online-only account but this usually depends on the amount of money.
You may also be able to deposit cash and cheques into online accounts at a local post office.
The benefits and challenges of online banking
The banking world has come on in leaps and bounds over the last decade and online banks have provided a real challenge to traditional banks. However, there are pros and cons, as we explain here:
| Pros | Cons |
|---|---|
| Quick and easy to sign up | No branches and usually no way to speak to someone face to face |
| Can access your accounts and manage your money at any time of the day or night | May not be able to deposit cash for free |
| Usually cheaper than traditional banks | ATMs could be limited |
| A range of extra benefits, from linked savings accounts to in-credit interest |
How to switch banks online?
It's easy to switch banks online, but there is a process to follow. How to switch will depend on the bank you're using but with most you'll need to follow these steps:
- Compare bank accounts
- Sign up to a new account when you find the right one for you
- If the bank is signed up to the Current Account Switch Service (CASS) the switch will take place in seven days, and it's up to the new bank to move you over
How to open an online or app-based UK bank account?
It's usually a relatively quick and easy process when opening an online bank account in the UK. You will usually need to show some type of identity documents to prove who you are and there may be a credit check if the account you're opening has an overdraft.
Here we briefly run through the steps you'll need to take when opening a new account:
1. Sign up via the bank's website or app
You'll be able to sign up for a bank via its website or app. Once you're a member you can usually then apply to open an account if you meet the eligibility criteria.
2. Prepare your ID and other supporting documents
You will usually need to show proof of identity, which could be a UK passport or driving licence. Personal details including your full name, address, profession, marital status, and nationality may also be required along with details about how long you've lived in your current home.
3. Fill out an application form
The next step is to fill out the application form for the new bank account. If you're switching an old current account you will need to supply the details of the account so everything – such as direct debits and standing orders – can be transferred over.
4. Verify your ID
You may need to send a photo of your ID to the bank, or even record a short video, to verify your ID. The bank will then check this to make sure it's genuine.
5. Make an initial deposit (if required)
Some banks will ask for an initial deposit to be paid into the account before you can start using it.
6. Set up your account features
Now it's time to set up your account features, such as linked savings accounts or spending limits.
7. Activate your card
When you receive your debit card, it may need to be activated. This can usually be done online, or via an ATM.
8. Download the bank's app
If your bank has an app, which most do, download this to your phone and you'll be able to use it for accessing your accounts and managing your money.
What are the eligibility criteria for UK residents?
Most UK banks will list the eligibility criteria on their app or website. This may include a certain age (usually 18 for an adult account), and you will normally need to be a UK resident with a fixed address.
You may also need to earn a certain amount of money to open an account. For most standard current accounts if there is an overdraft you will need to pass a credit check too.
Frequently asked questions
Here we take a look at some of the most common questions when it comes to online banking:
How can I find my online bank statement?
Visit your online banking account and look for your online statement or e-statements. You can search for the relevant month and download a PDF of the statement if needed.
Which banks allow you to deposit cheques instantly?
Some banks will allow you to deposit a cheque via their apps. This is a free service and the money usually clears within 24 hours.
How do I first check my account balance online?
When you log into your online banking, you will need to give your username and usually a familiar word or phrase along with a password. You will then be taken to your account where you will see your balance and any recent spending.
How can I transfer money to another online account?
You can transfer money to another account both through online banking or a banking app. You will need the other person's name, account number and sort code in most cases. You then choose to send money to them, by entering the amount you're sending along with a reference code.
Can I close my bank account online?
Yes, you will usually be able to close a bank account online.
How can I deposit a cheque online?
If your bank allows you to deposit cheques via online banking or an app, you will usually need to take a photo of the front and the back of the cheque. It will then be verified by the bank before it appears in your balance.
