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Traditionally, the local bank branch has always played an important role in how Australians manage their finances. In a country dominated by the big four – CommBank, Westpac, ANZ and NAB — you never have to look too far to find a branch where you can deposit a cheque, withdraw funds, apply for a home loan or ask for financial advice.
But as the digital revolution has transformed the banking industry in recent years, more and more of our regular banking transactions can be carried out online. From transferring money to another account to even applying for a home loan, there’s a whole lot that can be done via your computer or smartphone.
But while Australia is still home to thousands of bank branches — more than 3,800 belonging to the big four alone —recent years have seen the emergence of a new trend in the industry: online-only banks. These banks don’t operate any branches and offer their products completely online, which gives them the potential to provide big discounts and savings to their customers.
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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 offer — 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 its customers by charging fewer fees, offering lower home loan interest rates and providing better products than bricks-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.
It’s also worth pointing out that banks with no branches also allow you to perform transactions over the phone.
The tech boom of the late 1990s and early 2000s saw the advent of the online-only banking revolution. Since then, the industry has seen some online banks fail and several new players join the market, so let’s take a look at some of the online-only banks and home loan lenders that offer their services to Australian customers.
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. |
Easy Street | A division of Community First Credit Union, Easy Street offers everyday transaction accounts, online savings accounts, personal loans, a wide range of home loans and insurance options. |
There’s a wide range of factors you need to consider when comparing the online-only banks in Australia. Make sure to consider:
If you’re not put off by the idea of managing all of your finances digitally, it’s definitely worth considering the products and services available from Australia’s online-only banks. If you compare your options, you could find a provider that offers an affordable solution to your banking problems.
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