Online-only banks: Who does it better?

Could an online-only bank offer the right account or home loan for your financial needs?

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.

Compare online banking products below

Rates last updated September 19th, 2018
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Monthly Account Fee
ING Savings Maximiser
Ongoing, variable 2.80% p.a. when you link to an ING Orange Everyday bank account and deposit $1,000+ each month and make 5+ card purchases a month. Available on balances up to $100,000.
2.80% 1.00% 1.80% $0 $0 / $0 Go to site More
RaboDirect High Interest Savings Account
Introductory rate of 3.05% p.a. for 4 months, reverting to a rate of 1.80% p.a. Available on balances below $250,000
3.05% 1.80% 1.25% $0 $0 / $1 Go to site More
Bankwest Hero Saver
Ongoing, variable 2.60% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.
2.60% 0.01% 2.59% $0 $0 / $0 Go to site More
AMP Saver Account
Introductory rate of 2.55% p.a. for 4 months, reverting to a rate of 2.10% p.a. Available on balances below $5,000,000.
2.55% 2.10% 0.45% $0 $0 / $0 Go to site More
AMP SuperEdge Saver Account
Link to your SMSF. Ongoing, variable 2.05% p.a. when you link to AMP SuperEdge Cash Account or a different transaction account for your SMSF in another bank. Available on the entire balance.
2.05% 2.05% 0.00% $0 $0 / $0 Go to site More
Rates last updated September 19th, 2018
Name Product Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Monthly Account Fee Product Description
ING Orange Everyday Account
$75 cash bonus.
$0 monthly account fees.
Receive a $75 cash bonus if you open a new Orange Everyday account, enter the promotional code and deposit at least $1,000 within a calendar month and make 5+ card purchases (T&Cs apply). Get a competitive ongoing variable rate when linked with an ING Savings Maximiser.
RAMS Action account
A RAMS everyday transaction account where you can manage your account online.
ME EveryDay Transaction Account
Free access to any ATM in Australia.

Get your ATM fee refunded within 30 days with $0 monthly fees.

Compare up to 4 providers

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 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.

See our guide to home loans here.

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.

Online-only banks in Australia

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.

BankProducts and services offered
INGA 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 BankOwned 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.
UBankA division of National Australia Bank, UBank offers home loans, savings accounts, combined savings and transaction accounts, term deposits and SMSF accounts.
RaboDirectThe online-only arm of Holland’s RaboBank, RaboDirect is a savings specialist and offers high-interest savings accounts, regular savings accounts, notice savings accounts, term deposits, a range of business and SMSF accounts.
Easy StreetA 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.
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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 bricks-and-mortar branch networks, online-only banks can often afford to offer accounts with minimal or no fees.
  • You can get a getter 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 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.
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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.

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.

Shirley Liu

Shirley Liu is a program manager at finder, formerly the publisher for Banking and Investments. She is passionate about helping people make an informed decision, save money and find the best deal for their needs.

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Important Information*
RaboDirect High Interest Savings Account

Maximum Variable Rate


Standard Variable Rate

ING Savings Maximiser

Maximum Variable Rate


Standard Variable Rate

Bankwest Hero Saver

Maximum Variable Rate


Standard Variable Rate

AMP Saver Account

Maximum Variable Rate


Standard Variable Rate


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