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Digital banking: Compare neobanks in Australia

Learn how a digital neobank could benefit you and how you can get started with one today.

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Up Everyday Account
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$0.00 monthly fee
  • No minimum deposits
  • No ATM fees
  • Apple Pay & Google Pay

Like many other parts of our lives, banking is becoming increasingly digital. Australia has a number of digital banks, also called neobanks, promising to revolutionise the financial industry through the use of world-class technology and digital services.

You'll learn about some of Australia’s new digital banks in this guide and how a completely digital bank is different to an existing bank that offers digital services and platforms. Plus, compare digital abnk accounts and savings accounts from a range of neobanks that you can open in minutes.

What is a digital bank?

Like the name suggests, a digital bank operates digitally, usually from an app, rather than from a physical branch or office. A digital bank is a fairly loose term; the correct industry name for these banks is a neobank.

A neobank is a completely digital bank that doesn’t use any existing legacy systems to operate. This means the bank doesn’t use any physical infrastructure or digital operating systems that are already being used by existing financial institutions in Australia. The technology used by these neobanks is developed from scratch. It's a bank that operates via an app on your phone.

Compare digital banks in Australia

Data indicated here is updated regularly
Name Product Card access Monthly account fee Domestic ATM fee International transaction fee Contactless payments
Up Everyday Account
Mastercard
$0
$0
0%
Google Pay
Apple Pay
Samsung Pay
Exclusive offer: $5 bonus for new Up customers when you click through from Finder and create an Up account.
A transaction account designed for your smartphone with spending categorisation and a round-up feature to help you save. No international transaction fees and no ATM fees in Australia.
Xinja bank account
Mastercard
$0
$0
0%
Google Pay
Apple Pay
Samsung Pay
100% app-based everyday bank account.
$0 monthly account fee.
A digital bank account with no ATM fees in Australia or overseas, plus no currency conversion fees. Xinja app offers spending categorisation features.
86 400 Pay Account
Visa
$0
$0
0%
Google Pay
Apple Pay
Samsung Pay
An everyday transaction account that allows you to link your existing bank account/s in the 86 400 app and see all your transactions in the one place. Enjoy spending tools and bill reminders.
Revolut Account
Visa
$0
$0
0%
N/A
A convenient global spending account that lets you hold multiple currencies, spend and transfer money in over 150 currencies and benefit from innovative money management features.
Hay Account
Visa
$0
$0
0%
N/A
The Hay card allows you to spend like a local overseas with no intentional transaction fees and up to $500 worth of fee-free ATM withdrawals at international ATMs a month.
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Data indicated here is updated regularly
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Maximum balance for bonus interest Monthly deposit condition for bonus interest Interest Earned
86 400 Save Account
1.6%
0.15%
1.45%
$100,000
$1,000
Link this Save account to your 86 400 Pay account and earn a competitive bonus interest rate each month you deposit $1000. You can withdraw from the account without affecting your bonus interest rate.
86 400 Save Account
1.6%
0.15%
0%
$100,000
$1,000
Link this Save account to your 86 400 Pay account and earn a competitive bonus interest rate each month you deposit $1000. You can withdraw from the account without affecting your bonus interest rate.
Up Saver Account
1.85%
0.1%
1.5%
$50,000
$0
An innovative savings account that's tied to your goals. Create multiple accounts and automatically round up your spending from your Up transaction account.
Up Saver Account
0.1%
0.1%
0%
$50,000
$0
An innovative savings account that's tied to your goals. Create multiple accounts and automatically round up your spending from your Up transaction account.
Volt Savings Account
1.65%
1.65%
0%
$245,000
$0
The Volt Savings Account offers a competitive variable interest rate with no monthly deposit conditions to meet. Enjoy complete access to your savings while still earning interest.
Volt Savings Account
0%
0%
$245,000
$0
The Volt Savings Account offers a competitive variable interest rate with no monthly deposit conditions to meet. Enjoy complete access to your savings while still earning interest.
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What's the difference between a digital bank and a traditional bank that's available online?

Many banks in Australia appear to be digital banks since they don’t have branches and are focussed on developing top quality mobile banking apps for their customers. However, just because a bank doesn’t have branches and offers a range of digital products and platforms doesn’t mean it’s a digital bank or a neobank.

A bank offering Apple Pay isn't necessarily a digital bank.

Many banks offer contactless payments via digital wallets like Apple Pay, Google Pay and Samsung Pay. Westpac is the oldest bank in Australia and it offers Google Pay to its customers, yet Westpac isn’t considered to be a completely digital bank.

Similarly, if a bank offers a top-notch mobile banking app, Internet banking services, cardless cash facilities and digital savings tools, this doesn’t automatically mean it’s a digital bank either. Remember, a 100% digital neobank is one that doesn’t use any existing banking systems or infrastructure.

ING, ME and UBank aren’t 100% digital banks.

Many people refer to ING and ME as digital banks because they don’t have any physical branches. However, these banks aren’t neobanks because they rely on existing banking infrastructure.

For example, ING is owned by multinational Dutch bank ING Group and relies on its infrastructure and legacy systems to operate. ME is owned by more than 20 industry superannuation funds, including AustralianSuper and Hostplus. Similarly, UBank is actually owned by NAB, one of the Big Four banks in Australia, and relies on a lot of NAB’s existing operating systems to function.

That's not to say that these banks don't offer great digital services, because they do. ING has one of the most popular banking apps, and UBank is known for its easy-to-use app with spending insights too. It just means these banks aren't considered neobanks in the traditional sense.

Are digital banks safe?

Digital banks need to have the same banking licences and approvals as existing Australian banks before they’re able to offer products and services to consumers. These new banks are regulated by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investment Commission (ASIC) in a similar way to how existing banks are regulated.

Your deposit of up to $250,000 with an Australian authorised deposit-taking institution (ADI) is protected by the Australian government, under the financial claims scheme. This means if something were to happen to the bank, your money (up to this amount) would be safe.

When a digital bank receives its full ADI license from APRA, it's included in the government guarantee scheme and your deposit is protected. Xinja, Volt and 86 400 have all received their full ADI banking licenses, so you're deposit up to $250,000 with these banks is protected. Up Bank uses the ADI license of an existing bank (Bendigo and Adelaide Bank) so your deposit with Up is also guaranteed.

Note that some of the digital banks mentioned in this guide (for example Revolut) are not yet considered banks (they aren’t ADIs) and don't yet have a banking licence from industry regulators.

Pros and cons of a digital bank

Pros

  • Impressive apps packed full of features
  • Detailed insights into your spending and saving habits
  • Competitive interest rates and low or no fees

Cons

  • Some only offer one product, so you can't do all your banking with a digital bank just yet
  • No branches for people who like to visit a branch, and no desktop Internet banking portal either

How to get started with a neobank

If you’re interested in joining one of these new neobanks, all you need to do is download their app to get started. These apps are free to download. Once you've got the app, just follow the prompts to create an account and verify your identity.

Then you're done! You'll receive your physical debit card in the mail, but you can also start using the account right away.

Watch our interview with 86 400 co-founder Anthony Thomson and digital banking expert Chris Skinner.

Latest news in digital banking

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2 Responses

  1. Default Gravatar
    GladysApril 1, 2019

    I would like to reach out to you to find out if there is a saturation point for digital banking. Please advice
    Kind regards

    • Avatarfinder Customer Care
      MaiApril 2, 2019Staff

      Hi Gladys,

      Thank you for reaching out to Finder.

      Yes, there may be a saturation point for digital banking but this is not something to be worried about in Australia. The saturation point for neobanking is currrently seen in the US where new app growth has slowed, business mobile has failed to grow as expected, person-to-person growth is low and debit card controls are gaining popularity.

      Hope this helped.

      Kind Regards,
      Mai

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