Ubank is a popular online bank in Australia. It offers a wide range of features and benefits that appeal to many customers. But is it the right online bank for you? In this post, we will take a close look at Ubank and its features, so that you can decide if it is the right choice for your banking needs.
What Is UBank Australia?
Ever since reading the Barefoot Investor 10 years ago, I have used Ubank as my primary bank as that was his suggestion at the time. I think he prefers ING now but to be honest, I was happy with my Ubank setup and I’m also a little lazy. Ubank is an online bank owned by NAB, a big four Australian bank.
What the hell is an online bank you may be thinking – online banks differ from traditional banks in not having a bricks and mortar presence, they operate completely in the digital world. No, it’s not some weird metaverse bank that meta (nee. facebook) has released, it just means you won’t be able to go into a physical branch and see a teller to do your banking.
If you are anything like me and you haven’t set foot in a bank for the past 10 years then this style of banking will suit you perfectly!
Who Is UBank Backed By?
Ubank is a subsidiary of the National Australia Bank (NAB). In 2008 NAB saw that there was a big push in the consumer directed online banking scene and launched Ubank as their contender in this space. Since its inception 600,000+ customers have trusted Ubank with their hard earned money, and why wouldn’t you.. with the backing of one of Australia’s largest banks you can guarantee that your money is in safe hands.
UBank Products
Like most traditional banks Ubank offers many different products for its customers to utilise. These range from standard savings and transaction accounts to mortgage and investment loans. Let’s take a look at the products on offer.
Ubank USave & USpend
The USave account is the foundation for all customers that use Ubank. This is your standard savings account that you can use however suits you. I personally have a few USave Accounts, one ‘general’ account where my salary gets paid into and then a few separate ones for long term savings, bills, holidays, etc. As soon as my salary comes in each month I pay myself first by transferring money into my savings (and paying the mortgage which is held with a different bank) and then start distributing funds to each of the other accounts.
USpend is the transaction account where you will be able to get a linked Visa Debit card. Combining the USave account with a USpend not only gives you access to your hard earned coin at any time but also maximises your interest earning potential.
On its own, the USave pays a measly 0.05%pa in interest, but when you combine it with a USpend account you are able to unlock an extra 1% interest. While this kind of interest won’t mean you can retire tomorrow it does hedge against inflation a little better than the standard rate.
To be eligible for the bonus interest rate you need to transfer a minimum of $200 per month from a bank account outside of the UBank Network – for me, this is by having my salary deposited into the account.
Ubank Mortgage
UBank offers Home Loans that are quite competitive in the current market. With standard variable loan rates sitting at 2.09% with no annual fees (2.09% comparison rate) it is one of the market leaders in affordable home loans.
Ubank offers the usual suite of home loan options including standard variable, 1 year fixed, 3 year fixed and 5 year fixed interest loans. One thing to note is there is a once off $395 ‘rate fix’ fee for the fixed interest loans but at the time of writing this is being waived.
Unfortunately, Ubank does not offer any home loans with the ability to have an offset account attached to it. To combat this they do have the option for unlimited redraw, so you can pay more into your mortgage and then redraw it if you need to.
UBank Investment Loans
As well as the Owner Occupier Loans, Ubank offers investment loans. These loans require a maximum LVR of 80% which may deter some investors that haven’t got the cash to throw down for a 20% deposit, but if you can then you are going to get some pretty competitive investment loan rates.
These loans are available in the same interest terms as the owner occupier loans with standard variable, 1,3 and 5 year fixed interest rates. Currently, the Standard Variable rate sits at 2.34% (2.34% Comparison Rate) which is very competitive in the market. You will pay a slight premium for fixing your interest rate at the moment but nothing too crazy, if we see inflation climb like it is currently in the US (Feb 2022) then we can expect the variable rates to start rising in the near future.
Refinance with Ubank
Ubank isn’t just for brand new loans, you are able to refinance from your current bank to Ubank. This is something I am currently looking at doing as my home loan is about to finish its honeymoon period, once that finishes it reverts to commbanks standard variable which is too high. I don’t want to be hit with a ‘lazy tax’ for not changing so it’s time to start seriously thinking about changing.
Ubank has a great calculator that lets to compare your current homeloan with what they have to offer.
Frequently Asked Questions
Where Is UBank Based?
Well, Ubank is an online bank, so most of your dealings will be done through that medium. They have a great online chat support if you need help or you can give them a buzz – the couple of times I have had to speak to them they have been super helpful and I haven’t had to wait on hold for hours like some other banks.
UBank’s Head office is based in Sydney, not that you will ever need to go there.. unless you work for Ubank – then you probably should go there.
Does UBank offer Home Loans?
They do! Ubank offers many different types of loans from occupier loans to investor loans, there is a competitive loan that will suit your needs.
Does Ubank offer Personal Loans?
No, this is the one thing that Ubank does not have in its product offering. To be honest this shouldn’t be an issue for most of us looking for any form of financial independence. Unsecured Personal loans tend to have huge interest rates attached to them and just lead to a debt spiral. If you do have any of these at the moment be sure to pay them off as soon as possible.
Who Is UBank Affiliated With?
Ubank is backed by the National Australia Bank.
Does UBank offer Joint Accounts?
Yes! One thing I love about Ubank is that I can have as many joint accounts as I like. My soon to be wife and I have set up a heap of joint accounts that help us meet our goals. You can also have a joint USpend account which is really handy for paying for any joint expenses.
How Many Bank Accounts Can I Have?
There is a limit of bank accounts that you can have with UBank. You are only able to have 10 accounts in total. This shouldn’t be an issue for most people as it gives you the flexibility to set up new accounts for different savings goals you may have.
Conclusion
I have used Ubank for the past 10 years and really have nothing bad to say about them. They combine simplicity and full control when it comes to banking which I think is absolutely crucial.
Ubanks product offerings are straight forward, they aren’t getting caught up in Credit Cards, Personal Loans or Buy Now Pay Later. By sticking to the simple things and doing them well they are able to ensure that the user has the best experience possible.
Will some people find an online bank limiting? yes, there are always going to be people that need/want to go into a branch and talk to someone about their banking. But for the majority of people that don’t have any complex banking requirements then online banks like Ubank are perfect.
I will continue to use Ubank for my everyday banking and probably my homeloan moving forward and I think if you are looking for a new bank they are definitely an option to look at.