Click on to the best internet banking deal

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The Independent Online

Time was when internet banking appealed only to the young, the technology savvy or the downright geeky.

But consumer confidence has soared over the past few years, according to a new report by Lloyds TSB. Users across all age groups feel increasingly safe online, it says, and although the over-55s remain the least confident, overall trust in internet banking is on the up.

The number of customers with bank accounts that they have registered for online access has rocketed - from 1.3 million in 1999 to 24.1 million last year, reports the British Bankers' Association. For example, bill payments made via the internet rose from 28.6 million in 2001 to 102.6 million last year.

Over the same period, bill payments made over the phone actually dropped, from 53.9 million to 51.1 million.

Those who opt to manage their finances online need to be aware of the risk of scams such as "phishing", where fraudsters dupe you into divulging your bank details by email. So it is vital you keep your passwords and personal information safe.

But there is no disputing that managing your money online has advantages. Not only do you avoid the queues and hassle of making regular visits to your bank branch, but the savings rates more than match those on "no notice" or fixed-rate accounts available via the telephone or in branches.

The AA is paying 5.06 per cent on its Telephone Savings account, but this rises to 5.11 per cent if you opt for its Internet Savings deal. However, both include a 0.5 per cent bonus that drops away after 12 months.

Today's top-paying internet account is Northern Rock's Tracker Online, which pays 5.41 per cent. Again, though, it includes a six-month bonus of 0.71 percentage points.

If you are looking for an online account with a flat rate and no bonus, Nationwide building society is paying 5 per cent.

"For peace of mind, Nationwide consistently offers a good savings account," says Sue Hannums of independent financial adviser Chase de Vere.

If you have a good credit record, online lenders such as Cahoot and Smile will often be able to offer you a cheaper deal for unsecured personal loans and credit cards, as you save them the cost of dealing with you in person. For example, Cahoot currently offers an annual percentage rate of 5.8 on loans of more than £5,000.

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