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FOOL SCHOOL
What rate of interest is paid on balances in your current account? This is important if you usually have surplus funds in the account. Try to work out how big a balance you are likely to have each month. In fact, most banks will allow you to move money from your current account to a high rate deposit account whenever you like and this is particularly easy to do online. With some you can even request that any funds over a certain amount are automatically transferred.
It's obviously not very Foolish but, sometimes, overdrafts are necessary. If you think this is going to be a regular feature you should consider the charges levied on overdrafts. And if you occasionally find yourself facing a really dire month then check the rates for unauthorised overdrafts, as these can be truly astronomical. (Best to phone them to ask for an increase in your overdraft facility in this situation, eh?)
Are you a night owl? Most online banks claim to operate 24 hours a day, 365 days a year. However, they generally go off-line in the dead of the night to do upgrades and things. Some actually close from midnight to 6am. If this is when you're likely to want to do your banking then these won't be for you.
Do you look at your bank statements? Would you if they were available online? Some banks offer online statements going back for several months while others only offer the current month's transactions. Think about which you'd prefer.
Your telephone bill lands on your doormat, but it's not due to be paid for two weeks. Can you remember to pay it on time or would you rather set up a payment to be made in two weeks' time. Most, but not all, online banks offer a facility to cater for this. However, if you tend to pay all your bills by direct debit, then it won't be necessary.
Do you want to be able to set up, amend and cancel standing orders online? Not all of the online banks allow you to do this. At the moment direct debits have to be set up with the payee. This means that you can generally only cancel them online. However, there is a pilot scheme running at the moment, which is intended to take the headache out of transferring direct debits en bloc to a new bank. Basically, you send the bank a mandate for them to act as your agent in contacting all the payee companies and transferring the direct debits. The scheme's been pretty successful and some banks are now offering this facility as an enticement: they'll do all the work for you if you switch to them. However, it is likely that, for the moment, individual DDs will need to be set up with the payee by you.
Do you remember that "Chance" card in Monopoly, which says "Bank error in your favour, collect £200"? Unfortunately the reality is rather different. When a bank error favours you, the bank invariably spots it and takes the money back, so it's clearly important that your bank is efficient enough not to make mistakes. Unfortunately, it's difficult to know who is good and who is bad in this respect but you can get a rough idea of how efficient they are when you contact them. Did you get polite and prompt responses? Are the features on their website easily accessible? Is the website fast or slow? If service is important to you, make this one of your criteria.
Some people like the warm feeling of going into a branch of their bank. You remember, they're those things that used to be found on high streets -- there are some still around if you look hard. In fact, most online banking services are simply the internet version of high street banks or supermarkets, so you'll usually be able to resort to the bricks and mortar 'parent' if you ever have serious problems. Just make sure there are no penalties for physically taking your online problems into the relevant bank rather than using email or phone.
If you are a PC user, running Windows 95 or higher and Internet Explorer 4.01 or higher (or Netscape Navigator 4.08 or higher), then the world of online banking is your oyster. If this is the case, then it's probably best to ignore this category and just make a final check with your eventual bank of choice. If you are a Mac user or you're still living in the world of Win 3.1 or IE3, then you're in a bit of trouble. You'll need to make this your number one criterion and check the requirements carefully with each potential bank.
Although some banks are planning to launch Mac-friendly services, at the moment Mac users will generally need one of those gizmos which turns their machine into a PC. If you're on Win 3.1, I'm afraid it's time to get a new computer (sorry, Mum).