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UBank has dropped its savings account rate, how does it compare now?

Posted: 9 October 2020 2:55 pm
News

Two young women out buying coffee at a cafe.

UBank has cut the interest rate on its popular USave savings account down to 1.46% p.a. Here are a few accounts still offering a higher bonus rate.

UBank has dropped the total variable interest rate available on its popular USave savings account down to 1.46% p.a. from its previous 1.60% p.a. This is a drop of 14 basis points which, while not a huge drop, is still not ideal for account holders looking for the best rate.

This 1.46% p.a. rate is made up of a 0.40% p.a variable base rate and a 1.06% p.a. variable bonus rate. To earn the full 1.46% p.a. rate, USave account holders still need to link to a UBank USpend account and transfer at least $200 per month into either account.

You also need to make sure your combined balance across both accounts does not exceed $250,000, otherwise you won't earn bonus interest. If you fail to meet these account conditions, you'll only earn the base rate of 0.40% p.a. that month.

How does the USave account compare?

Interest rate aside, in terms of account conditions UBank's are fairly easy to meet in comparison to other leading accounts. Some savings accounts require account holders to deposit up to $2,000 each month and also restrict your withdrawals from the account.

So even though the account has cut its rate, it's still a great option for savers who don't want to commit to a large monthly deposit requirement and like the flexibility of withdrawing when needed.

Just looking at the total interest rate on offer, there are a few accounts that offer more interest. The Westpac Life account offers a market-leading 3.00% p.a. bonus rate, almost double that of UBank's. However, it does come with more conditions.

Firstly, Westpac's 3.00% p.a. rate is only available to customers aged 18-29. You need to grow your balance each month (by any amount, excluding interest) and make 5+ debit card purchases from your linked Westpac Choice transaction account each month. This 3.00% p.a. rate is also only paid on balances up to $30,000.

The Citibank Online Saver account offers 1.55% p.a. to new customers for the first four months after opening the account. This is a great rate (in today's low-rate environment, that is) and there are no deposit conditions to meet to get it. Plus, it's available on large balances up to $500,000. However, it does drop down to just 0.35% p.a. after the four months are up.

The Up Saver account offers 1.60% p.a. when you open an Up Everyday Account and make 5+ card purchases per month. You can also open multiple Up Saver accounts, though you can only earn bonus interest on a combined balance of $50,000. In comparison, UBank offers bonus interest on balances up to $250,000.

If you're not happy with your savings rate, compare savings accounts and consider switching.

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