Looking for the Best Australian Online Bank? Up Bank Review

up bank review

There are several online bank account providers that provide far better value than the big four. This Up bank review compares the new Up bank offering with other popular online banking providers. Compare the features to work out which product is best for you.

If you are still paying monthly banking fees, ATM or international transaction fees, it’s time to switch accounts. These online banking products provide better value and faster transactions than the big Four.

At bare minimum, Australians should be paying no monthly fees for banking, and have access to a good range of ATMs fee free.

Up Bank Review – Is My Money Safe with an Online Bank?

The Australian financial claims scheme guarantees savings with all licensed “deposit taking institutions.”

An individual can have up to $250,000 in cash savings, a couple $500,000.

If the deposit taking institution becomes bankrupt, the government are protected and repaid by APRA. ING, ME Bank and Up bank are all covered by the government guarantee.

A Summary of Features with ING, ME and Up Bank

 INGMEUp Bank
Account keeping feesFreeFreeFree
ATM FeeALL ATM fees refunded as long as: – –Deposit $1000/ mo -Pay using card 5 x mo (or apple/google pay) -Grow savings maximiser every monthRefund of all Australian ATM feesFree at major banks if 5 purchases made using card, google pay or apple pay
Interest Paid April 20211.35% in attached “Savings Maximiser” up to $100,000 0.05% on cash left in everyday account1.1% on up to $250,000 – Need to make 4 monthly tap and go purchases0.7% On up to $1Million
Overseas transaction fees100% rebate of ING international transaction fee of  up to 2.5% of the international transaction.
Refund of international ATM fees
$4 international ATM fee (on top of overseas ATM fee) 1.5% transaction fee on international purchasesFree major bank ATM withdrawals No international fees
Overdrawn interest rateNo dishonour fee (will just not allow transaction)$15 overdrawn fee11.23%
Round UpCan be set to “round up” and deposit remainder of $1 – $5 into savings accountNot internally with ME bankRound up feature available
Instant Transfer of fundsOSKO
PayiD
Bpay
PayID
OSKO
Bpay
Bpay
PayID
OSKO
Spend trackingNoNoYes
Ability to split savings into categoriesOnly one “savings Maximiser” account allowed linked to each everyday account.  ING do allow multiple accounts to be opened thoughAllows multiple savings accounts for an everyday accountYes – “Savers” can name according to goals.  Unlimited number of savers. Only 1 debit card comes with the account though
Other ProductsCredit cards, home loan, personal loans, superannuation and insurance1% for any “Pink account” card transaction is donated by ME bank to the national breast cancer foundation Credit cards, home loans, term deposits and personal loansSpend tracking – great for those with all their banking in one place

ATM Fees

ATMs seem to be disappearing from our local shopping centres. With pay wave becoming increasingly available, with need cash less and less.

When I do need cash, I find it’s because I’m at a small merchant outside a major shopping centre and am often needing to use an expensive independent ATM.

If your life is already completely cash free, ATM fees are probably not that important. A one off payment of $2-4 is annoying, but no big deal. If you are withdrawing cash monthly, you will want to eliminate fees.

Up bank offer free ATM withdrawals from major bank ATMs, which is adequate for those that rarely use cash.

For those that want completely free ATM access, ME bank offer this without annoying terms and conditions.

ING also refund all ATM fees, but you have to meet a list of demands each month to be eligible. These terms aren’t too onerous for me, because my ING everyday account is used as my “blow it (splurge) money, and I use it regularly.

I can deposit $1000 per month into my ING “Splurge money” account and then transfer the excess back to my primary offset account. I use my card for splurge purchases via paywave 5 times a month or more without any effort.

The new condition that you have to grow your savings maximiser each month could be met by depositing $1 in the account each month, if you weren’t using the savings maximiser for anything else.

If you have a mortgage, and offset account makes far more sense for savings anyway.

Up Bank Review – Interest Earned

Up bank is the lowest interest payer of the group. If you are not planning to save significant amounts in this account, you probably should ignore the interest.

For $5,000 savings over a year, the difference in interest between Up Bank at 0.7% and ING at 1.35% (if you meet all T&Cs) is only $32.50.

If you have a $30,000 emergency fund kept in the account, you could earn an extra $195 by going with ING.

If all savings are kept in an offset, and your online bank account will hold less than $1000, pay more attention to other features that may benefit you, such as free ATMs and international transactions.

Overseas Transaction Fees

How much do you spend overseas? You don’t have to be an international traveller to get hit by these charges! Some operators in Australia are based overseas and you can get hit with sneaky internation transaction fees as a result.

If you do a reasonable amount of online shopping, you are likely to benefit from free international transactions. You can get international transaction fee free credit cards. But, if you need cash overseas, withdrawing cash from an ATM using your credit card is likely to incur a hefty “cash advance” fee.

Up Bank and ING offer free international transactions and ATMs, ideal for those of us dreaming of an overseas holiday.

The international fees listed above are a reason to avoid ME Bank unless you are sure you will not use the card for international transactions or ATMS.

Overdrawn Fees and Charges

Hopefully you will not become overdrawn, but if you do ME and UP bank will both sting you with fees. In contrast, ING simply decline the transaction but do not charge dishonour fees.

Round Up Feature

This feature has become a common offering over the last few years. When you use your debit card, the virtual “change” is transferred to a savings account, mortgage or investment account.

It is a feature that is available with RAIZ from any bank account. I do not personally find it useful, but I can see it would useful for those struggling to save.

The ideas is that if you spend $2.50 on a drink, depending on your settings the 50c change from $1, or the $2.50 change from $5 is swept into you savings/investment account. It is a virtual version of the spare change jar.

Tiny amounts of money are involved. Savers should quickly graduate from this to saving and /or investing designated amounts each pay cycle.

If this feature appeals to you, you could use the internal feature with ING or UP Bank, or use RAIZ of similar with ME.

Up Bank Review – Instant Transfers

Any of the online modern banking products offer OSKO and PayID as well as Apple and google pay. Instant money transfers are convenient.

The big banks seem to lag behind with this, but any of the three products discussed in this article allow instant transfers.

Spend Tracking

Spend tracking is the great new alternative to budgeting. I find this so much more helpful.

Instead of writing an ideal budget that fails to anticipate all the unexpected expenses that inevitably come up, spend tracking actually keeps track on what you spend on what. Savers can then review spending categories each month and work out strategies to cut back.

UP Bank offer spend tracking with their bank account. This is no use if you have multiple bank accounts and credit cards. For those starting out with a single bank account, they may like this feature. They could also probably just categorise the transactions manually.

Spend tracking really comes into it’s own when spending is occurring using multiple cards and accounts. It is really hard to keep track of manually!

Banks currently still don’t allow you to share log in details with apps such as Pocketsmith. The safest option is to upload banking data in to the app. Hopefully with open banking this will become acceptable and easy.

Up Bank Review – Multiple Savings Categories.

Up bank and ME both offer the option to divide your savings into different buckets. This will suite Barefoot investors and those who are always saving for multiple goals. An excel document is an easy work around for those that prefer features with ING but still have a lot of goals to work towards.

Up Bank Review – Summary

Up bank provides a great bank account, with free access to major bank ATMs, international transactions fee free and no monthly account fees. They offer a round up feature, spend tracking and the ability to split your savings into multiple categories.

Those wanting to store thousands of dollars in an account may prefer a higher interest option. Those concerned about being stung with overdrawn fees or wanting to access all ATMs free may prefer ING.

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