Online UK BANK ACCOUNTS

With the explosion in the uptake in dialup and broadband internet access has come a rise in the number of dedicated online banks. Alongside this is the increase in online services being offered by most regular high street banks. It is now a great way to bank, online. The convenience of being able to manage your account, statements, standing orders, direct debits, money transfers and bill payments from the comfort of your own home is one of the best advances in banking services to the consumer for many years. There are a large number of companies competing for your custom and great offers are to be had. Free overdrafts and competitive interest rates are the headline offers being banded about to gain your custom. Most often used terms alongside these figures that you need to understand are:

AER: Annual equivalent rate, the rate rate over a year if amounts are compounded. Typically used for savings accounts where interest is paid monthly. The AER assumes all interest paid is left in the account and so the next months interest is paid on the pervious months interest compounding the amount.
EAR: Effective Annual Rate (EAR), Is the real annual cost of an overdraft or Loan, stated as an annual rate, which takes into account how often interest is charged to the account. All other charges, such as arrangement fees must be shown separately from the EAR.
GROSS RATE: F or UK bank accounts the gross rate is the contractual rate of interest payable before the deduction of income tax at the rate specified by law.