An internet bank refers to a bank that operates exclusively online. With the rapid growth of internet activity over the last decade, internet banking has increased remarkably in popularity, with a large number of banks established as operational internet banks.
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Internet banks explained
An internet bank is a bank that offers the same services as a traditional bank, although it operates exclusively on the internet. It is regarded as a rapidly fast growing industry, and refers to every banking service that can be performed online. Internet banks are established without a physical banking infrastructure, with the aim of offering savings accounts with high interest rates and loans with low interest rates.
An internet bank provides customers with the ability to open a bank account that offers all the services provided by traditional banks. This involves both transactional and non-transactional services, such as investment purchases and loan applications, as well as viewing transactions and downloading bank statements. The operation of internet banking facilitates all activities to be performed instantly, therefore enhancing the accessibility of a person’s account.
There are many advantages of an internet bank, including competitive interest rates for personal accounts, which are normally higher than those of a traditional bank. Moreover, they provide low interest rates on loans and mortgages. This is mainly because an internet bank does not have any running costs or maintenance fees, thus being able to provide more competitive rates. Additionally, an internet bank usually permits a very low minimum balance requirement, coupled with low or zero set-up fees. This is because internet banks do not require the presence of bank tellers to perform banking activity, and thus service fees are significantly lower.