Are you thinking of switching to an online bank?
The United Kingdom (U.K.) banking industry may still be dominated by the "big four" banks (Barclays, HSBC, Lloyds Banking Group, and the Royal Bank of Scotland/NatWest), however, digital banks with their innovative technology and consumer-driven approach to banking are starting to make their mark in the financial services industry and have begun to disrupt the big bank monopoly.
Many of the digital banks are headquartered in the UK and you have many options to choose from if you are looking for a different banking experience.
We have listed the top 5 online banks in the U.K. in this blog. Before we get to the list, we shall discuss what digital banks are and whether they are safe or not.
As the name suggests, these banks known by different names like online banks, digital-only banks, mobile banks, app-based banks, neobanks, or challenger banks exist only in digital form-they don't have an established physical location aka brick-and-mortar branches, like the traditional banks.
They are usually app-based, hence are easily accessible on your smartphone. Traditional banks do offer online banking and mobile banking but digital-only banks exist entirely on digital platforms.
Banking services and products ranging from current/savings accounts to investment in mutual funds, stock trading or trading in cryptocurrencies are all accessible through your hand-held devices, eliminating the need to visit a bank branch. Digital banking is the digitization of every level of banking, from front to back-end.
Digital banking has grown massively in recent years, thanks to the advancements in financial technology or fintech and the increasing demands of tech-savvy consumers for efficient ways of banking. According to UK-based research firm Juniper Research, the digital banking users in the world will exceed 3.6 billion by 2024, a 54% increase from 2.4 billion users in 2020.
As per the latest stats, in the UK, 27% of adults have an account with a digital-only bank equating to about 14 million Brits as of January 2021. The number of people with a digital bank account could reach 23 million by 2026.
Unlike the traditional banks that rely on outdated legacy systems and old ways of doing things, this new breed of banks are more agile, technologically driven, and focus more on user experience which adds a competitive edge.
Additionally, digital banks have low to no interest fees, competitive rates on foreign exchanges, high annual percentage yield (APY), better budgeting features, intuitive banking tools and are generally user friendly.
As mentioned earlier, online banks don't have any physical branches, might have fewer financial products in comparison to traditional banks, and have no face-to-face customer support and advice (instead, you get the customer support via a phone line or a live chat feature in-app).
Most importantly, these app-based banks namely, Starling Bank, Monzo, Atom Bank, are fully licensed and protected by Financial Services Compensation Scheme (FSCS) which means your money (up to 85,000 pounds) is protected in case the bank goes under.
For digital banks not covered by FSCS (do not hold UK banking licenses), such as Revolut and Monese, they are covered by the Financial Conduct Authority (FCA). In other words, if the app-based banks are not backed by the FSCS, then chances are that they are working with one of the traditional banks, and your funds are protected in a licensed bank that your digital bank has partnered with.
Thus, it is important to note that, although the two types of banks are technically seen as "rivals", they do work together alongside each other, bringing superior banking services to customers.
Many people still use traditional banks for savings accounts (because traditional banks tend to have marginally higher interest rates), credit cards, and overdraft facilities among others.
They also make use of the services offered by digital banks to manage their finances such as everyday spending and daily budgeting.
When choosing the best online or digital bank, look at the services that they offer, unique features, and online reviews. The best online banks will depend on your financial needs and goals.
Voted as the Best British Bank and the Best Current Account 2021, Starling Bank is the top digital bank for a well-rounded current account.
Starling has over 2 million users and has a 4.3/5 rating of 24,089 reviews (at time of writing) on Trustpilot.
App store rating is 4.9/5 of 255,211 reviews and Google play rating is 4.5 of 57,559 reviews.
Services offered by Starling Bank:
Monzo is a well-established name in the digital bank world. YouGov named the bank as the UK's most recommended brand in 2019. The number of users now is over 5.5 million. Monzo started as a prepaid card but achieved a full banking license in 2017.
Trustpilot rating is 4.5/5 of 18,272 reviews.
App store rating is 4.9/5 of 69,605 reviews and Google Play rating stands at 4.7/5 of 69,269 reviews.
If you are looking to save money, this is the bank for you. The company has gradually added features to manage your money better such as tools to set budgets, create saving pots and pay bills.
Services offered by Monzo:
Revolut is the first British digital-only bank to reach unicorn status (privately held start-up company with more than $1 billion valuation). It is one of the fastest-growing digital banks in the UK, garnering 15.5 million users in Q1 2021, the largest number of users by a UK Digital Bank.
Revolut's multi-currency accounts let you hold 30 different currencies for free. It is handy for traveling abroad and sending international payments. Revolut claims that they use the exchange rates that you see on Google, so you can avoid paying hefty fees and marked-up exchange rates when sending money abroad.
Note that many banks charge hidden fees on money transfers. The best way to find out the best deals on international money transfers is by comparing their exchange rates and fees side by side.
The most notable feature is you can buy and exchange cryptocurrencies.
Revolut's Trust Pilot rating is 4.5 of 93,238 reviews.
App Store and Google Play ratings are 4.7/5 of 24,240 reviews and 4.7/5 of 1,249,375 reviews respectively.
Services offered by Revolut:
Atom Bank is the UK's first all-digital bank to get a full UK banking license. Though it doesn't offer current accounts or use it for day-to-day spending like other digital banks we have discussed, it specializes in savings accounts and mortgages. It offers higher rates on savings accounts than its competitors.
If you are looking to build your savings with a digital bank, Atom Bank is your best bet. For 4 years in a row, Atom Bank has been named as the Best Online Lender at the What Mortgage Awards 2021.
Trustpilot's score is 4.6/5 of 5,884 reviews.
App Store and Google Play ratings stand at 4.7/5 of 20,020 reviews and 4.6/5 of 4,207 reviews respectively.
Services offered by Atom Bank:
One of the most attractive features of Monese is that you don't need to have proof of address or credit history or regular income to open an account. For students or immigrants who have just arrived in the UK, you can open a current account straight away. The classic account is available for free for 12 months, after which there is a monthly fee. As of January 2020, it has over 2 million users.
Trustpilot rating is 3.5/5 of 20,935 reviews.
App Store rating is 4.8/5 of 43,789 reviews and Google Play rating of the app is 4.4 of 76,613 reviews.
Services offered by Monese:
Even though they're not a bank, Wise offers a great option for UK residents looking to gain access to local account details and low cross currency transaction fees. UK residents can also benefit from their 'Assets' feature which allows you to switch the money held in your Wise account from cash to stocks, which will get invested into the world's 1500 biggest companies like Apple, Google, and Tesla. (Note capital at risk).
Wise is a UK based global technology company founded in 2011 with a mission to make sending, receiving and spending money overseas as cheap, convenient and fair as possible for customers and businesses. Transparency is at the heart of their business and providing a good customer experience.
With a Wise account you can:
They're FCA regulated as an e-money institution in the UK and have over 12 million customers using their services. Investors like Andreesen-Horowitz have invested into their business and they became a publicly traded company on the LSE in 2021. Open your free Wise account now.
Before you decide which bank suits you best, better to determine what your banking needs and compare your options.
The future of banking is digital and it is on your smartphone. From saving money, budgeting, and stock market trading. The bank of the future will be driven by changing customers' expectations, emerging technologies, and new business models.
Electronic funds transfer (EFT) is one of the commonly used methods to send money nowadays. There are various ways of making an electronic fund transfer. It includes more than online ACH transfers or wire transfers.EFT payments have become an essential part of our daily lives. From online shopping to paying bills, transferring money electronically has revolutionized how we handle financial transactions.So, EFT is a term you've probably come across and most likely have sent money by EFT but what does it really mean?In this blog, we discuss what is an EFT, different types of EFT payments, how ETFs work and its key components, benefits, and drawbacks so that you can make a wise decision on which is best for your transfer needs.What is an Electronic Fund Transfer?Electronic Funds Transfer (EFT), is a digital transfer of money through an online payment system, either between banks or people. EFT payments can be done within the same bank, or between banks.As the money transfers are all digital, there is no need for physical currency or paper checks. Because of this, EFT payments are far quicker and more accessible than other methods of sending money.As the traditional paper-intensive processes become more digitized, EFTs will continue to grow and evolve.The Key Components of EFT PaymentsTo fully grasp how an EFT works, it's essential to understand its key components. These include:Sender or OriginatorThe party or individual who initiates the electronic funds transfer. This could be a person sending money to a friend or a business paying its employees.ReceiverThe recipient of the funds receives the electronic transfer in their account. This could be an individual or a company.Financial InstitutionsBanks, credit unions, and other financial institutions play a crucial role in facilitating EFT. They serve as intermediaries that help process and complete the electronic transactions.Electronic ChannelsEFT transactions can occur through various electronic channels, including online banking, mobile apps, point-of-sale terminals, and ATMs.Payment SystemsPayment systems are the networks and protocols that enable electronic funds transfers. Some well-known payment systems include ACH (Automated Clearing House), SWIFT (Society for Worldwide Interbank Financial Telecommunication), and card payment networks like Visa and MasterCard.Types of Electronic Funds TransfersThere are several different types of Electronic Funds Transfers, each designed for specific purposes. Here are some of the most common types:Direct DepositsThis is a common form of electronic funds transfer where funds are deposited directly into a bank account. For example, direct deposit from the employer's bank account to to employee's bank account.This EFT uses an electronic funds transfer network called the automatic clearing house (ACH). The money can be transferred instantly and automatically into the receiver's bank account.The ACH system is also used for recurring payments, such as utility bills, mortgage payments, and subscription services.Wire TransfersWire transfers involve the immediate funds transfer between two banks, often used for high-value or international transactions. The electronic transfers are handled by a network of financial institutions such as the Fedwire Funds Service, Clearing House Interbank Payments System (CHIPS) in the U.S. for domestic wire transfers, or the SWIFT network or IBAN for international payments.Debit and Credit Card TransactionsWhen you use your debit or credit card for a purchase, you're essentially conducting an EFT transaction. The funds are electronically transferred from your account to the merchant's account.The cards feature 16-digit numbers across the front, along with the expiration date and the cardholder's name. Both cards are used either by swiping through a reader, but the more common methods are the chip and PIN or contactless technology.Mobile PaymentsMobile wallets like Apple Pay, Google Pay, and Samsung Pay allow you to make electronic payments using your smartphone. To make a contactless payment, you hold your smartphone up to a reader like you would a credit or debit card.Bank ATM (Automated Teller Machine)Bank ATM transactions are EFT payments that use Internet banking to move money electronically between bank accounts, deposit money, or withdraw cash. The bank-issued debit or credit card and PIN are used to make the ATM transaction. Although ATM fees are common, they are usually waived if you use an ATM that is owned and operated by the same bank that holds your bank account.How Long Does an EFT Take?EFTs are typically far speedier than any paper-based option. However, there are different types and transfer times vary.For example, certain mobile payments, and peer-to-peer payments are settled instantly. Domestic automated clearing house transactions are completed the following business day.It can take as little as one minute for a domestic wire transfer initiated using a non-bank money transfer service and destined for an account at the same financial institution. Whereas it can take three to five days for an international wire transfer to clear.What is the Cost of EFT?The cost of an electronic funds transfer varies depending on the type of transfer you select and the total amount of money you wish to send.If you own a company and need to pay an employee's salary, using direct deposits is a cost-free option for you to consider. Or you can use a debit card or a smartphone to make a contactless payment in stores without incurring any transaction fees.Benefits of EFT PaymentsEFT provides several advantages, both for individuals and businesses.Speed: EFTs are much faster than traditional paper-based methods. Money transfers are instant, making them ideal for urgent transactions.Convenience: EFTs allow you to initiate and receive transactions from the comfort of your home or anywhere with an internet connection. You don't need to visit banks or handle checks manually.Security: EFTs are generally more secure than paper-based ones. Banks and payment service providers employ encryption, multi-factor authentication, and real-time fraud detection systems to safeguard electronic transactions.Cost-effective: EFTs are less expensive for both individuals and businesses. You can save money on postage, check printing, and transportation costs associated with paper checks.24/7 Availability: EFT systems are available 24/7, allowing you to make transactions at any time.Drawbacks of EFTsInternational wire transfers, which are a type of EFT, can be costly considering there are charges for sending and receiving money, including correspondent bank fees, and other penalties, such as investigation fees, in the event that the wire transfer is misplaced.Wire transfers are irreversible once sent. Any funds that were sent to the wrong person by mistake or at the request of a fraudster cannot be recovered.EFTs are vulnerable to fraud, hacking, and identity theft. It's essential to take precautions to protect your financial information. This includes regularly monitoring your accounts, using strong and unique passwords, and being cautious about sharing your financial details online.What is the Electronic Fund Transfer Act? (EFTA)The Electronic Funds Transfer Act (EFTA) is a federal law in the US enacted in 1978 to protect individual consumers engaging in EFTs.Guidelines and responsibilities for consumers and banks to address errors are included in the EFTA. Customers have the choice to dispute and correct inaccuracies without incurring financial penalties.In accordance with the act, banks are also required to give customers specific details on how to reduce their liability in the event that their card is lost or stolen.In light of the growing preference for electronic transfers over paper checks, customers required reassurance regarding the security of their money. This led to the development of new regulations that would enable users to safely utilize electronic fund transfer services.Alternative Money Transfer OptionsIf you are looking to transfer money overseas, there are specialized money transfer providers offering EFT services that offer overall better experiences in terms of costs, speed, convenience, and efficiency.InstaremInstarem offers seamless cross-border money transfers to more than 55 countries via its network of more than 8000 banks worldwide, with competitive exchange rates and low fees. Their user-friendly platform ensures swift and secure transactions for individuals and businesses alike.WiseWise revolutionizes international transfers by providing transparency, real exchange rates, and minimal fees. Users can trust Wise for cost-effective and efficient cross-border transactions. Additionally, Wise offers a multicurrency account that lets you keep more than 50 different currencies and convert them at an affordable rate.RemitlyRemitly focuses on fast and affordable money transfers, catering to the needs of expatriates and those supporting loved ones abroad. Remitly provides two-speed options for money transfers: Express ensures immediate delivery with higher fees while Economy delivers funds in 3 to 5 business days.XEXE is a trusted currency converter and money transfer platform, providing real-time exchange rates and tools for individuals and businesses to make informed financial decisions in the global market. It offers international money transfers in 139 currencies to over 220 countries and territories.PandaremitPandaremit stands out for its user-friendly interface and competitive rates in the remittance market. It's a reliable choice for individuals seeking convenient and efficient international money transfers. Transfers can be completed in as little as 2 minutes, and a 100% satisfaction guarantee ensures a full refund if expectations aren't met.PangeaPangea simplifies remittances for users, especially those sending money to Latin America. With a focus on speed and accessibility, Pangea ensures a straightforward experience for cross-border transactions. It offers swift, secure, convenient, and cost-effective global money transfers from the U.S. to 25 countries across Asia and Latin America in under 30 seconds. Verify its availability in your state of residence, as there are certain U.S. states where Pangea may not be accessible.AboundAbound, previously named Times Club and affiliated with the Times of India group, serves as a rewards and remittance app tailored for Non-Resident Indians (NRIs). Abound enables the transfer of funds from the U.S. to India with attractive exchange rates, providing cashback and rewards. You get competitive exchange rates and no transfer fees when sending money to over 130 Indian banks from the U.S.PomeloPomelo introduces a fresh approach to seamless money transfers from the U.S. to the Philippines, integrating consumer credit with international remittance services. It offers a Family plan for global credit sharing, delivering individual cards within 10 days. Users can send money now, pay later at zero APR, and control card balances monthly at a competitive USD to PHP exchange rate.SBICFor fast money transfers from the United States to India, consider SBIC (State Bank of India-California), a subsidiary of India's State Bank of India. As a full-service bank with multiple California branches, SBIC provides various financial solutions and international services. Key features include zero-cost transfers to any Indian bank within hours, competitive USD to INR exchange rates, and flexible transfer options through the SBIC Mobile App, online, or in-person.PlacidPlacid offers a comprehensive platform for international money transfers, focusing on speed and security. It streamlines currency exchange across 25+ countries through direct affiliations with various banks. It ensures rapid transfers, allowing recipients to receive funds directly in their bank accounts or through convenient cash pickup at local agents. Notably, their spotCash! service distinguishes itself with speed, simplicity, and convenience for recipients.PassToPassto stands out for its commitment to providing cost-effective and reliable international money transfer services. It caters to expats in the UK, offering a mid-market exchange rate and transparent fees, facilitating money transfers to 60 countries and real-time airtime top-ups to 150+ countries. Users can PassTo Plus Points with each transfer, which is redeemable for fee discounts on future transactions.ConclusionElectronic Funds Transfer has revolutionized the way we handle financial transactions, providing convenience, speed, and security. EFTs continue to evolve as technology advances. The future of EFT holds the promise of even greater convenience and efficiency.As we have discussed in the blog, there are various specialized services for a seamless and efficient global money transfer. Explore these options to make informed decisions based on your specific transfer needs.To compare your options for international money transfers, use CompareRemit's comparison tool and find a provider that best fits your money transfer needs!
Diwali, the Festival of Lights, is a time of joy, celebration, and the exchange of gifts. As Diwali 2023 approaches, finding the perfect gift for your loved ones can be a delightful challenge. Whether you're running short on time or looking for thoughtful last-minute gift ideas for your sister for Bhai Dooj, we've got you covered. In this article, we'll explore the essence of Diwali, its significance, key dates, and suggest creative ways to send gifts using remittance services.What is Diwali? Diwali is a prominent Hindu festival celebrated with enthusiasm across India and among the global Indian diaspora. It symbolizes the victory of light over darkness and good over evil, with a rich cultural and spiritual heritage. A time full of vibrant rangoli, crackling firecrackers that light up the night, and aromatic food being passed around, Diwali spans five days of festivities, each with its own rituals and significance.Families illuminate their homes with diyas (oil lamps) and candles, create beautiful rangoli designs, and indulge in sweets and savories.Why is Diwali Celebrated?Diwali celebrates the victory of good over evil and light over darkness. It's a time to seek blessings for prosperity and happiness. The exchange of gifts during Diwali is a way to show love and appreciation for one another, enhancing the festive spirit.Key Dates for Diwali 2023:Dhanteras: November 10, 2023The first day of Diwali, dedicated to the worship of Lord Dhanvantari (the physician of the gods) and goddess Lakshmi. People buy gold, silver, and utensils on this day.Naraka Chaturdashi (Choti Diwali): November 11, 2023On this day, Lord Krishna defeated the demon Narakasura, signifying the victory of good over evil. It's a day of cleansing and lighting lamps.Diwali (Main Day): November 12, 2023The most important day when families come together to perform Lakshmi Puja (worship) and light oil lamps or diyas to illuminate their homes.Govardhan Puja: November 13, 2023A day to worship Lord Krishna, who lifted the Govardhan Hill to protect the villagers from torrential rain.Bhai Dooj: November 14, 2023A day to celebrate the beautiful bond between brothers and sisters, with sisters applying tilak on their brothers' foreheads.Last-Minute Diwali Gift Ideas1. Digital Gift CardsConsider sending digital gift cards from popular online retailers. These cards allow your loved ones to choose their perfect gift, ensuring they get something they truly desire. Many remittance services offer the option to send digital gift cards along with money transfers, making it a convenient choice for last-minute gifts.2. Money TransfersSending money home for Diwali is a practical and thoughtful gift. Online remittance services like Wise, Instarem, Abound, Xe Money Transfer, Wo Transfer, etc. offer quick and secure transfers, enabling your family to make Diwali purchases, decorate their homes, and prepare delicious meals. It's a versatile gift that allows your loved ones the freedom to use the funds as they see fit.To find which money transfer service is the best one for you, check out our catalog of reviews and guides, all designed to help you see the complete ins and outs of the many remittance services on the market to make the best decision for your needs. We invite you to compare remittance providers using CompareRemit’s comparison tool today to find the best rates, lowest fees, and fastest turnaround times for your specific destination and transfer amount.3. Subscription ServicesGift subscriptions to streaming platforms, magazines, or online courses. These subscriptions offer entertainment and knowledge, making them valuable and enjoyable gifts for your loved ones.4. Personalized Diwali HampersPut together a personalized Diwali hamper with traditional sweets, homemade treats, and small decorative items. Include a heartfelt Diwali card to add a personal touch. Sending a picture of the hamper along with a digital money transfer can be a delightful surprise for your family.5. Online Shopping VouchersOnline shopping vouchers from popular e-commerce platforms allow your loved ones to pick their favorite items. These vouchers can often be emailed directly, making them an excellent last-minute gift option.In the spirit of Diwali, the joy of giving is unparalleled. Embrace the true essence of the festival by spreading happiness, love, and prosperity. Even in the last minutes leading up to Diwali, these thoughtful and practical gift ideas ensure your loved ones feel cherished and valued. Utilize reliable remittance services to make these gestures of love possible, bridging the distance and connecting hearts across the globe.For all of your money transfer needs, visit our homepage for more information on how to find the best option for you and your family this Diwali. Here you will be able to compare exchange rates between the top remittance companies, find the best rates, learn how to get started, receive exclusive offers, and more. This Diwali, let your gifts illuminate the lives of your dear ones, just like the radiant glow of diyas brightens the darkest of nights. Happy Diwali!
As the joyous festival of Diwali approaches, the spirit of giving and connecting with loved ones in India is more vibrant than ever. To help you make the most of this Diwali season, we've compiled an exclusive guide to the Diwali 2023 offers from some of the leading money transfer companies featured on our platform. With CompareRemit's powerful comparison tool, you can easily compare and contrast live exchange rates, ensuring that you find the best deal for sending money home during this festive season.We have searched across multiple money transfer companies to find the best Diwali deals for you and put them all in one place! Check back with this article regularly as we update the deals available this Diwali season. SBIC Diwali Remittance Offer: Illuminate Lives with Exclusive Rates!State Bank of India (California) is dedicated to making your Diwali celebrations brighter and more special than ever before. Introducing the SBIC Diwali Remittance Offer, where you can send money to India and receive an exclusive exchange rate benefit of 20 paisa higher than SBIC’s regular base exchange rate! This offer is valid for a limited period only, from November 1 to November 16, 2023. To avail this exclusive offer and send your Diwali Remittance, visit SBIC's official website. Terms and conditions apply.ICICI Money2India Diwali Offer: Catch the Money2India Offer and Enjoy Cricket on Sling TV!ICICI Money2India is adding excitement to your Diwali by offering a fantastic deal. Register and transact with Money2India using the promo code WORLDCUP60 before November 30, 2023, to enjoy 1 month of cricket on Sling TV and get an exchange rate that's 60 paise better on your first transfer. New customers will also receive a $10 Sling Gift Card via email upon the successful completion of their first transaction.Explore More Offers Beyond Diwali DealsWhile not every money transfer company is running Diwali-specific promotions, several are still offering great deals this festive season:Instarem Money Transfer: New customers can take advantage of special rates and zero fees on their first transfer up to USD 500 with Instarem.Western Union: Enjoy zero fees on your first transfer.Ria Money Transfer: Use the promo code HELLORIA at checkout for a $0 fee on your first transfer with Ria.Keep an eye on this article as we actively update it with new offers that emerge during the Diwali season. With CompareRemit’s comparison tool and these exclusive Diwali offers, you can navigate the festive season with confidence, finding the best deal that suits your needs. Wishing you a radiant and prosperous Diwali filled with love and happiness!
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