When internet banking came along two years ago, attracting depositors with better interest rates seemed a natural.

The argument for internet banks is that because they do not have extensive branch networks and other costs they can offer better rates.

A fierce competition has broken out amongst the internet banks which includes not just stand alone banks like www.egg.com and www.cahoot.com, the new subsidiary of Abbey National, but also online versions of the established banks like www.abbeynational.co.uk and www.lloydstsb.com, to offer the best rates.

Abbey National offers seven per cent on one of its saver accounts although there are conditions about amounts and withdrawal times.

But what about the other side of banking? What is the position with personal loans and credit cards? As far as personal loans are concerned the answer seems to be like mortgages - they have yet to find a full time role on the internet.

Many people prefer to go into a branch and discuss a personal loan and fill in the forms in front of someone.

It depends on how used people are to borrowing money. Banks like LloydsTSB offer slightly different rates online to those available in the branch.

While the online banks like If, related to the Halifax, Smile, part of the Co-op, and Cahoot all offer personal loans, a shop around shows some of the phone providers offer cheaper rates.

Egg, for example, which says it has £154million out in personal loans, offers 16.5 per cent for a loan of between £1,000 and £2,000 falling to 9.9 per cent for a loan of more than £10,000.

Some of the telephone banks though offer loans of 9.5 per cent for amounts of less than £10,000.

A problem here is like mortgages - there are few good clearing systems for finding the most advantageous rates.

The best site is said to be www.moneysupermarket.com with details of loans and credit cards on offer.

Cards, unlike loans but like deposits, seem made for the net. The arguments are similar to attracting savers.

Without reams of paperwork and overheads, the internet or online banks can offer credit cards at a much cheaper rate than the high street banks or established card issuers.

Egg, for example, offers an APR of just 10.9 per cent. It is prepared to take over existing card balances at just 2.5 per cent interest as an introductory offer.

It also offers one per cent cash back on purchases at stores or two per cent on anything bought through its own portal.