Key Announcements
  • From 1 July, UBank customers will face tiered interest rates and higher deposit requirements on its popular Save product.
  • They will also not be able to set up direct deposits out of the Save product.
  • Bank Australia also introduced a tiered interest rate system but boosted the interest rate by 50bps on a couple of savings products to 5.25% p.a.

Starting 1 July, the minimum deposit to qualify for the bonus interest offered through UBank's Save account will be raised from $200 to $500.

The amount must be deposited from an external source, such as a salary or an automated transaction from another bank. Before you get the wrong idea, internal transfers between UBank accounts won't qualify.

Further, UBank also introduces bonus interest rate 'tiers' based on combined balances in the customers' Save accounts.

A corresponding interest rate will apply to each tier:

  • Tier 1 applies for balances up to $100k
  • Tier 2 applies for balances more than $100k up to $250k
  • Tier 3 applies for balances over $250k

UBank has yet to confirm the bonus interest rate for each tier, although market watchers are speculating that customers can likely expect lower interest rates as they move to higher tiers.

Currently, UBank customers with a combined $250,000 held across all savings accounts can earn up to 5.10% bonus interest on a per annum (p.a.) basis by depositing the required amount.

Otherwise, the base rate of 0.10% p.a. applies.

The bank's customers will also no longer be able to make direct debits, PayTo, BPay, and BSB and account payments from their Save accounts, and will need to set up a Spend or a Bills account to make external payments.

The aforementioned changes will not apply to UBank home loan repayments and transactions made from Save accounts will continue as usual, the bank confirmed.

According to the bank, the decision to move all outflows to Spend and Bills accounts aims to "keep Save for savings" only and help customers hit their savings goals and see their money more clearly.

NAB's digital-only bank - launched in 2008 and merged with neobank 86400 in 2021 - counts more than 800,000 customers as of March 2024, with majority of new customers below 35 years old.

In the year to March 2024, UBank grew its deposits by 12% to $19.2 billion.

It also has $13.5 billion in its mortgage book, up 13% from a year ago.

Rate changes in other banks

Earlier, Bank Australia also rolled out new rates on its Bonus Saver and MySaver savings accounts.

Customers with less than $250,000 in their bonus savings account will realise much bigger interest earnings starting 1 June, while those exceeding that amount will receive reduced rates.

Here are the new tiered interest rates on Bank Australia's Bonus Saver:

Balance

Interest rate (p.a.)

$0 - $100,000

5.25%

$100,000.01 - $250,000

4.75%

$250,000.01 - $500,000

4.30%

$500,000+

4.00%

To be eligible for the bonus interest, savers must deposit more than $100 and make no withdrawals each month.

The base variable rate of 0.10% p.a. applies to balances unable to meet the qualifying criteria.

Meanwhile, Bank Australia's under-25 savings account MySaver has gotten an interest boost of up to 50 basis points.

A 5.25% p.a. interest applies to balances up to $50,000, while those with more than $50k to $250k now earn 4.75% per annum.

Account holders must deposit at least $10 and make no withdrawals each month to get the boosted rates. If conditions are not met, the 0.10% p.a. base rate applies.

ANZ Plus is also set to roll out revised terms on its savings account.

Without jumping through many hoops, balances under $250,000 in ANZ Save currently earn 4.90% interest per annum, while a reduced rate of 3.75% p.a. applies to balances more than $250k.

However, starting 1 September, "additional criteria will apply that may affect how much interest you earn", according to the bank.

ANZ Plus is yet to announce the new eligibility requirements.


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