Online banks in Australia
Most banks now operate online as well as via branches, but some banks are 100% online-only banks.
Most of our regular banking transactions can be carried out online and in-app. Some banks are even 100% online banks. These banks don’t operate any branches and offer their products completely digitally, which gives them the opportunity to provide big discounts and savings to their customers.
However, almost all banks in Australia allow you to manage your account online via Internet banking or a mobile banking app.
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What is an online-only bank?
As the name suggests, online-only banks are operated entirely online. This means that you can apply for and manage your bank accounts over the internet via your computer or mobile, or even take out a home loan 100% digitally.
With no branches to operate, online-only banks have fewer overhead expenses to manage. For example, they have fewer staff to pay and don’t have to pay leasing costs on each of their branches. In theory, this reduction in ongoing expenses allows an online-only bank to pass on those savings to customers by charging fewer fees, offering lower home loan interest rates and providing better products than brick-and-mortar banks.
Some online-only banks specialise in offering savings and transaction accounts, while others also offer credit cards and home loans. In the case of home loan lenders, some providers employ mobile lenders who are able to meet with borrowers who prefer to have some face-to-face contact with their bank.
Online-only banks in Australia
Here's a few of the most-popular online banks, with products and services offered via a mobile banking app.
| Bank | Products and services offered |
|---|---|
| ING | A division of ING Bank (Australia), ING offers everyday transaction accounts, savings accounts, term deposits, business savings accounts, commercial mortgage accounts, home loans, superannuation accounts, self-managed super funds (SMSF) cash accounts and SMSF term deposit accounts. |
| ME Bank | Owned by industry super funds, ME Bank offers transaction accounts, online savings accounts, term deposits, credit cards, personal loans, home loans, and business savings accounts and term deposits. |
| Ubank | A division of National Australia Bank, ubank offers home loans, savings accounts, combined savings and transaction accounts, term deposits and SMSF accounts. |
| Rabobank | The online-only arm of Holland’s RaboBank, Rabobank is a savings specialist and offers high-interest savings accounts, regular savings accounts, notice savings accounts, term deposits, and SMSF accounts. |
| 86 400 | Now owned by NAB, 86 400 is a bank built and operated entirely via a mobile app. It offers a bank account, savings account and home loan which you can apply for and manage online. |
| Up Bank | Up Bank is similar to 86 400 in that it's a digital bank built and operated via an app. It's now owned by Bendigo and Adelaide Bank, but still doesn't have any physical bank branches. |
What are the benefits and drawbacks of online banking?
The benefits
- You can bank 24/7. Online-only banks allow you to manage your finances at a time and place convenient to you — no more need to waste precious time queuing at your local branch. You can access your account on your computer or on-the-go on your smart device.
- You can expect lower or zero fees. Because they have fewer overhead expenses than brick-and-mortar branch networks, online-only banks can often afford to offer accounts with minimal or no fees.
- You can get a better interest rate. Lower operating expenses also mean that many online-only banks can offer more attractive interest rates, either in the form of lower home loan interest rates or higher interest rates on savings accounts.
- Customer service. Online-only banks regularly provide extended customer service hours and a range of options for accessing help whenever you need it. Many online-only banks even offer 24/7 customer service.
The drawbacks
- There's no face-to-face contact. Some people simply prefer being able to manage some of their banking transactions face-to-face. If you prefer face-to-face banking, an online-only bank may not be right for you.
- Few options for handling cash. If you frequently deal with cash, you may find it inconvenient to withdraw, manage or deposit cash.
How to choose an online-only bank
There’s a wide range of factors you need to consider when comparing the online-only banks in Australia. Make sure to consider:
- The products and services they offer. The products and online-only bank offers will obviously have a big bearing on whether or not it’s the right bank for you. For example, if you want to grow your savings through a high-interest online savings account, you may need to choose a different bank to a customer who is looking for a no-frills online home loan. Research the individual products and services each bank offers and then compare them side by side to see how they stack up against one another.
- Fees and interest rates. As we touched on above, one of the main advantages of an online-only bank is the discounts and savings they are able to offer. With this in mind, look closely at how the fees and interest rates compare to the competition. Is their variable home loan rate competitively low? Do they offer a great interest rate on their online savings account? Are there any hidden fees and charges that could hurt your bank balance?
- Terms and conditions. It’s always worthwhile to check whether there are any terms and conditions attached to an online-only bank account. For example, in order to open a high-interest online savings account, are you required to open a linked transaction account with the same bank?
- Their online and mobile banking platforms. If you’re going to be carrying out all of your banking transactions via your computer, mobile phone or tablet, it’s important that the bank’s online and mobile banking platforms are easy to use. Check out reviews of each bank’s offerings and if possible, try them out for yourself before you make a choice about the right bank for you.
- Supported devices. It’s also a good idea to make sure you can easily access your bank’s app or internet banking portal via your phone, tablet and computer. Any unexpected compatibility issues can be a huge inconvenience.
- Their reputation. As online-only banking is still a relatively new sector of the industry, it’s important to be sure you end up choosing a bank you can trust. Research how long each bank has been in business, who they’re backed by, and whether or not they have established a good record of always meeting their customers’ expectations.
- Their customer service. Another important issue to consider is the quality of the customer service a bank offers. Because you can’t just walk into a branch and ask for help, you need to know that you will easily be able to access the support you need whenever you need it. Look for phone, email and live online chat support, including the hours during which they are available, plus it’s also helpful if the bank has a detailed online help centre.
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Ask a question
Is CrysTrust Online a legitimate online bank in Australia? Thank you.
CrysTrust is not on APRA’s list on authorised deposit-taking institutions, lists a 2011 copyright date and includes references to Zelle, which is a US-only product – so it doesn’t seem to have any actual operations in Australia.