How to open an online bank account in the UK?

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Having an online bank account allows you to access your account from anywhere in the world as long as you have an internet connection. This means that you can check your balance, transfer money, and pay bills no matter where you are.

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Answer Adeosun
Oct 3, 22 · 8 min read
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Let’s do a brief history of banking in the UK, shall we…

In the 17th century, goldsmiths kept gold for the royals and following the seizure of their gold by Charles I, they began to be ‘keepers of running cash’. They issued receipts (now known as banknotes or cheques) in exchange for gold and written agreement on when to pay back. The Bank of England and Bank of Scotland were also established during this period.

The 18th century saw the introduction of overdraft protections, clearing facilities, and security investments as part of services offered by banks in the UK. The Industrial Revolution also ensured that the number of banks increased from just two to over a hundred by the end of that era.

Joint-stock banks began to be formed in the early 19th century while credit cards, computing and a slew of new banking services like ATMs were introduced in the 20th century.

These days, we have many banks offering virtually the same services differing only in interest rates.

What then is an online account?

The old banking system worked in such a way that the customers had to go into the banking hall for any transaction they might have to conduct. These days though, you can easily do many banking transactions within the comfort of your home or anywhere else without stepping into the banking hall for months.

Many people are familiar with the traditional method of opening an account in the banking hall and then managing it with the bank’s app or website, credit and/or debit cards. However, opening an online bank account is almost the same with the exception of having to visit the physical bank building.

Online bank account is a bank account that can be opened via the bank’s website or phone app, free of charge. The banks that offer these may or may not have a physical office address. With your online bank account, you will still be given credit or debit cards to use on ATMs and make other payments. Depending on the type of account, you can get an interest rate which may even be higher by at least 1% than that of the traditional bank account.

There are many benefits to opting for an online bank account. These are, but not limited to, easy setup and use, potentially higher interest rates, avoid ATM fees, and some may even issue your cashier’s cheque via email.

How to set up an online bank account?

The steps are simple and easy.

  • Once you’ve identified the bank of your choice, visit their website and apply by filling out the required form(s) for the type of account you want. There are four types of online accounts that you can open – savings, money market, credit, and certificate of deposit accounts. You need to know what services are offered for these different types of accounts so you can decide which best suits your banking need.
  • Provide the necessary information/details about you such as name, age, nationality, and other supporting documents.

What supporting documents do I need to open an online account?

To open any type of account in the UK, whether physical or online, you need two forms of ID i.e., at least one government issued ID and a proof of residential address. Here is a list of the documents that you should keep handy –

  • International Passport or National ID card with a clear picture of you, or
  • National Insurance number, and
  • Proof of residential address which may be any of the listed below
    • Less that 3-months old utility bill
    • Less than 3-months old credit card or bank statement
    • Mortgage or tenancy agreement
    • Current tax bill
    • If you are a new UK resident, you can present your letter of admission (for students), or any other form of recent official that bears your residential address.

How to choose the best online bank?

Online banks are also known as neobanks, digital banks, app-based banks, challenger banks or mobile banks. As earlier stated, these banks don’t have physical buildings and thus operate purely online. Therefore, when choosing an online bank, it’s best to choose the one that offers good services and has great online reviews. Below is a list of some of the things to consider when choosing one.

  • FSCS or FCA licensed – always check to make sure the mobile bank is covered by the Financial Services Compensation Scheme (FSCS) or Financial Compensation Act (FCA). This is to ensure that your money of up to £85,000 is protected even if the bank goes under for any reason.
  • Monthly fees – some banks will charge a certain amount of money per month when you open your account. Try comparing the rates among different banks to help you choose based on your pocket.
  • ATMs or out-of-network ATM fee reimbursement – while some online banks have ATMs around for cash withdrawals, others provide reimbursement of ATM charges when you use other banks’ ATMs. Check to be sure your bank provides this service.
  • Interest or Annual Equivalents Rate (AER) – if you open a savings account and you keep the money for a year, you get the AER which is the interest rate accumulated over the course of the year. This rate also takes into consideration bank charges, compounding interests and bank charges. You should compare the rate offered by the online banks to help you make the best choice.
  • Transaction and Account balance limits – online bank accounts usually have daily transaction limits and overall account balance limit per month, varying from bank to bank. You should know the limit for your bank and the account type before applying.
  • Monitor your account in real time – since online banks usually operate via their websites and apps, you can check your bank balance, credit and debit information, and any other transaction using your phone, free of charge. You can even request your account details online too.
  • Overdraft facilities – since there is a credit and withdrawal limit on online bank accounts, it would be best to choose a mobile bank that give overdrafts in case of emergencies. Overdrafts enable you to borrow money from your bank against your next credit.
  • Speed of customer service – mobile banks do not have a physical building where you can walk in to lodge your complaints. Hence, check to be sure their customer service is highly dependable and available 24/7.
  • Add-ons and rewards – there are other add-ons that online bank providers make available to their customers. Some of these are receipt of scanned or picture snapped paper cheques to credit your account, mobile phone insurance, and a slew of other add-ons. You just need to know what you want your bank account to do for you so that you can make a wise choice.

Also, some mobile banks give rewards for transactions made that may be used with certain merchants. Verify what those are and if they are available in your vicinity before you sign up.

If you are a foreigner or new UK resident, it is important to know that many new and small banks sometimes get fidgety when handling international banking challenges. So, it may be wise to make use of traditional banks who also offer online banking. This is because they have experience handling foreigners and know the procedures. They also are more lenient with their requirements and are more efficient.

Benefits of online bank account

To mention but a few, the online bank account makes any online payment and transaction easier since they’ll be done with phone apps anyway. The AER or interest rate can be higher than that of the traditional bank account. In addition, you can also have access to overdrafts if you spend over the limit


Online banking is becoming more and more popular because of its ease of opening and use. So, if you are considering having one, you can go ahead. Only that there are still some services that can only be provided by the traditional banks.

How to choose the best online bank account?

Follow this guide:
HowTo step image

1. Make sure the provider is FSCS or FCA insured

In this way you don’t run at a loss if they go under

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