The 10 Best Digital Banks In Australia

digital banks australia

By researching dozens of mobile challenger banks from Australia and around the world, we have come up with a list of the best digital-only banks in the country. We’ll start with the best banks for each category and move on to see what are the best digital banks in general that are available in Australia.  

With so much competition in the banking market, the customer is finally the king. We can pick and choose what suits us the most. 

When choosing a mobile bank, always make sure to check websites such as TrustPilot,  Product Review, and of course Top Mobile Banks to see what the existing users are saying and what are the pain points of these banking apps. 

The same as in the UK and US, digital banking is on the rise in Australia, with many challenger banks emerging to improve upon the traditional approach we take to banking while making the most of the digital technology that has become so integrated into our lives. 

These banks, often referred to as digital banks, challenger banks, and neobanks, are entirely digital and have no physical branches. However, the well-rounded service they offer, with 24/7 in-app customer support, automated financial advice, and instant security features, means that physical branches are unnecessary for this kind of service.

Unlike traditional banks, digital banks don’t have substantial decades-old infrastructures that would take years to update to new technology, meaning digital banks are updating their service and rolling out new features all of the time to benefit their users.

Each of the following challenger banks has a standalone review on our website that you can check out as well. 

Best digital bank overall

Up

up banking

Up stands out from the rest of the digital banking pack Down Under. They offer a modern banking package that zeroes in on spending and savings account. There are no loans or mortgages here, and that’s OK. There are specialised institutions for that.

But Up has developed a well rounded financial package, and without fees, mind you. The package is tailored for the younger crowd that will appreciate emojis, hip icons, and a relaxed vibe from their banking app. There’s no space for “squares” here.

Use your Up account to receive your salary and pay your bills. Put your saving on autopilot and benefit from 0.70% p.a. up to $1m. Track your budget and put limits on your spending or simply see what you’re spending on each month. 

Quickly move money directly from your Up account into your Wise account and from there into 48 different currencies. Up has got you covered. 

>> Go to Up review

Best digital bank for savings accounts 

86 400

86400 bank

Although 86 400 has cut their interest rates significantly (which was expected), they still offer a 1.20% p.a. If you deposit $200+ per month. The total interest rate comprises a base rate of 0.10% p.a. and a bonus rate of 1.10% p.a. The bonus rate is applied up to a $50,000 balance. 

There’s no guarantee that they won’t slash the interest rate again because competitors have cut their rates as well. Still, it’s much, much better than at most, if not all, big banks. 

86 400 fills in a much-needed gap in the market, a banking solution that offers a significant step forward for those who choose to use it.

>> Go to 86 400 review

Best digital bank for business accounts

Airwallex

airwallex

Business owners are always on a hunt to find a better (or cheaper) bank account. And, in recent years, they’ve been spoilt for choice as more and more digital banks keep cropping up. One of these new startups is Australian Airwallex.

It’s perfect for those who want a no-frills business account to enable them to have a free multi-currency account, and competitive FX rates don’t need to look further than Airwallex. 

Free borderless Visa cards and a suite of APIs to accept online payments, manage treasury, and launch financial products globally are added bonuses.

>> Go to Airwallex review

Best digital bank for cashback rewards

Hay

Not much competition here, so we decided to give this one to Hay. They have a 1% cash back just for using your card to buy things. At the time of writing this, Hay were also running a promotion by giving all users 5% cashback in August. 

Best digital bank for metal cards

Revolut

revolut

There’s not much competition in this field Down Under, so it was easy to find a winner in this category. The price of the Metal Account is A$24.99/m, and the express delivery is free.

You can get your sleek Revolut Metal Card in 5 different colours that look amazing, although a bit understated. They are, of course, contactless and the whole Metal account offers a wide range of features.

You get access to 5 Junior accounts, cashback on metal card payments, up to £10,000/y purchase protection, ticket protection, returns protection, unlimited disposable virtual cards, and up to 0.65% AER daily interest rate on savings.

Other Revolut Metal benefits include the ability to spend in over 150 currencies at the interbank exchange rate, exchange in 28+ fiat currencies with no monthly limit, fee-free ATM withdrawals up to A$1400 per month, overseas medical insurance and delayed baggage and flight insurance, free lounge passes for your and up to 3 friends if your flight is delayed for 1 hour plus, and many more.

>> Go to Revolut review

Best digital bank for international money transfers

Wise

wise

Since its launch in London in 2011, Wise has focused on making international money transfers cheaper and more transparent.

Wise simply uses the best exchange rate that you can get and adds a minimal fee on top. This contrasts with big banks and other money transfer services like PayPal that add a massive markup to their supposedly “free” transfers. 

Wise use their technology to link their bank accounts all over the world. In practice, that means that you’re not sending money directly to the recipient but to a Wise account that then transfers money in local currency to its destination. 

The sender saves on fees, and the recipient gets the money for free in their local currency.

>> Go to Wise review or find more money transfer options.

Best digital bank for travelling

Up

up banking

Up is an excellent choice for travellers. They have no fees on international purchases (in-person or online), no fees for ATM withdrawals, and no added conversion or mark‑up fees.

You can also instantly see the cost of purchases in both Australian dollars and foreign currencies and freeze your card if it gets lost somewhere. 

>> Go to Up review

Best digital bank for investing

Revolut

revolut

Revolut is also an invaluable tool for beginners to get exposure to the all-encompassing BTC and other, to the general public, lesser-known cryptos. 

Revolut marks up a flat fee of 1.5% or 2.5% (depending on your account) to account for trading volatility for buying and selling cryptocurrencies. So, although it’s easy to invest in crypto via Revolut, it might cost you quite a penny.

The following cryptocurrencies are available on the platform: 

  • Bitcoin (BTC), 
  • Bitcoin Cash (BCH), 
  • Ethereum (ETH), 
  • Litecoin (LTC), 
  • Ripple (XRP), 
  • Stellar (XLM), 
  • EOS (EOS), 
  • OMG Network (OMG), 
  • 0x (ZRX), and 
  • Tezos (XTZ).

Besides cryptocurrencies, you can also buy commodities with the same ease. Commodities trading is available in Revolut from early spring 2020. Not only are they offering gold, but silver as well, and the exchange of other precious metals will be offered soon, so remember to check the commodities trading section in the Revolut app.

Once it becomes available in Australia, Revolut will let you invest in fractional shares for as little as $1. Over 850+ stocks are available now and among them are such blue chips as Apple, Tesla, or the super-popular Zoom.

>> Go to Revolut review

Best digital bank for freelancers

Wise

wise

Wise has to be added to your freelancing toolbox. If you don’t like to leave your hard-earned money on the table for the big banks to scoop up, a simple Wise application is a few clicks away. Their transparent fee structure will not leave you guessing.

Wise is best known for its currency exchange and money transfers. They help you avoid sneaky fees and unfair foreign transaction fees.

Wise lets you keep almost all the money that you get paid for doing that hard work like writing, coding, video editing, etc. There’s no need to give banks a cut. They have enough money as it is. 

If that’s not enough, you get to spend this money online or in-store with a debit card in the currency of the country you’re buying from to save on conversion fees.

>> Go to Wise review

Best digital banks 

86 400

86400 bank

About 86 400:

  • Founded: 2017
  • Founder: Anthony Thomson
  • CEO: Robert Bell
  • Partner institution: Cuscal
  • Personal accounts

Features:

  • Up to 1.20% p.a. Interest rate
  • Instant access to your savings
  • Connect 100+ financial accounts
  • Home loans
  • No monthly account fees
  • Bill sharing
  • Almost no fees

A lot of the financial world seems to be very centralized, with many emphases placed on larger banks that dominate the landscape, and the individual’s issues often get lost. 86 400 puts the individual first, allowing each user to get a fuller idea of their financial situation and better understand how they can improve their situation. 

Named after the number of seconds in a day, 86 400 aims to put customers in control of their money for every single one of those. 86 400 is fully regulated and licensed, and is backed by Cuscal, Australia’s biggest independent payments company. 

All deposits up to $250,000 are guaranteed under the Australian government’s Financial Claims Scheme.

>> Go to 86 400 review

Airwallex 

airwallex

About Airwallex:

  • Founded: 2015
  • Founders: Jack Zhang (CEO), Jacob Dai, Lucy Yueting Liu, Max Li
  • Business accounts

Features:

  • No fees
  • Easy to signup
  • Multi-currency account
  • Competitive rates
  • API
  • Free virtual and physical cards
  • Integrates with marketplaces
  • Xero integration

Airwallex is undoubtedly on the rise and is a good choice for SMEs worldwide. Their free multi-currency account offers employees free virtual and physical cards. And the FX rates are highly competitive. Worth checking out. 

Airwallex is an Australian fintech founded in 2015 by four Chinese friends Jack Zhang, Jacob Dai, Lucy Yueting Liu, and Max Li. Jack and Max found the inspiration for their new company while owning a cafe and spending a lot of money on foreign exchange fees and banking costs while paying for coffee from abroad.

>> Go to Airwallex review

Hay

hay bank

About Hay:

  • Founded: 2018
  • Founders: Andrew Laycock (CEO)
  • Personal accounts

Features:

  • Easy to open online
  • Prepaid Visa card
  • The card is 85% biodegradable
  • No fees on international transactions
  • Up to 10 personalised sub-accounts
  • No monthly fees

Hay has launched in 2020 and comes only a few weeks after it was revealed that Australian high street banks are facing huge losses as their digital counterparts are beginning to take over, with digital banks having received more than A$1bn in deposits since their launches.

And Hay is going to contribute to that trend with its no-fees account that is excellent for everyday banking and travelling. 

Judo Bank

judo bank

About Judo:

  • Founded: 2016
  • Founders: Joseph Healy, David Hornery (CEO), Tim Alexander, Chris Bayliss and Jacqui Colwell
  • Business accounts

Features:

  • Business loans
  • Lines of credit
  • Equipment loans
  • Personal term deposits
  • FCS insured up to $250,000
  • Excellent term deposit rates
  • Transparent costs
  • Dedicated relationship managers

Judo is a challenger bank that directly targets and caters to Australia’s small and medium-sized businesses that the big banking corporations neglected. The SME funding gap was reportedly $70 billion because traditional lenders focused solely on companies with a turnover of $100 million-plus.

Although it provides online-only services for depositors, it also uses relationship bankers to benefit the small and medium businesses it lends to.

>> Go to Judo review

Payoneer

payoneer

About Payoneer:

  • Founded: 2015
  • Founders: Yuval Tal
  • CEO: Scott Galit
  • Business accounts 

Features:

  • Easy to sign up online
  • Good choice for SMEs and freelancers
  • Free prepaid Mastercard
  • Connects to a wide range of marketplaces
  • Flexible withdrawal options
  • No account fees if used fairly regularly

Payoneer is a popular option for businesses and freelancers. They offer a prepaid Mastercard so you can spend your money directly from the account.

They’ve partnered with so many e-commerce marketplaces that it’s easy to get paid for your services, products, or rentals, for example. Airbnb, Amazon, Booking.com, Fiver, Upwork – you name it, Payoneer has got it.

Payoneer is universally accepted that nearly everyone that has some kind of business online has a Payoneer account. The Payoneer app works great, and if you need a debit card, you can order one free of charge, although the card is not the cheapest one to use in some cases.

>> Go to Payoneer review

Pelikin

pelikin

About Pelikin:

  • Founded: 2018
  • Partner institution: Heritage Bank
  • Personal accounts

Features:

  • Instant and free payments
  • Hold and swap currencies
  • Split bills and open tabs
  • Over 150 currencies available

Pelikin is a travel app and card designed to be taken all around the world with minimum fuss and hassle. Pelikin is regulated by and has all of the necessary trading licenses, including the Authorised Deposit-Taking Institutions (ADI) license. It is also backed by Visa and Heritage Bank, ensuring that the app is safe to use.

Overall, Pelikin looks to be a reliable and flexible travel card and app that effectively empowers people to travel the world without the fear of monetary limitations.

>> Go to Pelikin review

Revolut

revolut

About Revolut:

  • Founded: 2015
  • Founders: Nikolay Storonsky (CEO) and Vlad Yatsenko
  • Personal accounts (spending, saving, junior, crypto), business accounts

Features:

  • Budget & Analytics
  • Get paid early
  • Crypto trading
  • Savings Vaults
  • Up to 4.64% interest rate
  • Donations

Revolut has made a dent in the global banking system with its rapid global expansion making it one of the top challenger banks wherever it lands. Although it’s been available in Australia for a short time, people are starting to recognize the app’s benefits and flexibility. 

While the pandemic has hindered its rapid expansion Down Under, as soon as global travel kicks off again, Aussies are going to enjoy its vast borderless benefits.

Unlike in some EU countries, Revolut Australia is authorized by the Australian Securities & Investments Commission but it is not a bank or even an authorized deposit-taking institution.

>> Go to Revolut Australia review

Up 

up banking

About Up:

  • Founded: 2018
  • Parent institutions: Ferocia Pty, Bendigo and Adelaide Bank
  • Personal accounts

Features:

  • Low fees
  • Automated saving 
  • Multiple savings accounts
  • Categorisation and insights on spending
  • A plethora of cardless payment options
  • Apple Pay and Google Pay
  • Earn bonus interest with a savings account

Up Bank is based in Melbourne. As a subsidiary of Adelaide Bank and Bendigo, it is licensed by these organisations’ Australian Deposit-Taking Institution (ADI) license, which has been issued by the Australian Prudential Regulation Authority (APRA).

Choose between the UP Everyday account, which includes spending categorisation, real-time reporting, and bill predictions, as well as cardless payments through Apple Pay, even before your card arrives; and the Up Saver account, which you can use to work towards savings goals through a no-fee account which offers bonus interest depending on your number of transactions.

>> Go to Up review

Volt Bank

volt bank

About Volt Bank:

  • Founded: 2017
  • Founders: Luke Bunbury and Steve Weston (CEO)
  • Personal savings accounts

Features:

  • Interest rate 0.9% p.a. (variable)
  • Saving challenge
  • No minimum balance
  • Maximum account balance is AUD 245,000

Volt is still in beta and keeps its cards pretty close to its chest while they work on preparing their product for release, but what we have seen and heard so far makes it look like a promising new banking option. 

The highlight is, of course, the 0.9% interest on their savings account, which has piqued enough interest and intrigue to make us sign up to the waiting list. Rumour has it that Volt is set to release any day now, and we are looking forward to seeing what they bring to the table.

>> Go to Volt review

Wise

wise

About Wise:

  • Founded: 2011
  • Founders: Kristo Käärmann (CEO) and Taavet Hinrikus (CEO)
  • Partner bank: Community Federal Savings Bank
  • Personal and business accounts, money transfer

Features:

  • Free online account
  • International bank details
  • Send money to more than 70 countries, always with a low and transparent fee
  • Spend in local currency with your card
  • Receive your salary, pension, and more
  • Pay at the real exchange rate
  • Pay online securely with instant notifications
  • Use your card in more than 200 countries and withdraw money from 2.3 million ATMs

Since its launch in London in 2011, Wise has focused on making international money transfers cheaper and more transparent. 

By charging extremely low fees compared with high street banks and other online payment providers and using the real exchange rate when converting currencies, Wise has quickly become a top choice for both personal and business international bank transfers.

Wise got famous for transferring money in a fast, cheap, and transparent manner across the world. To think that other platforms or vendors charge from 5 to 13 times more for the same thing is really mind-boggling. No wonder that big banks are losing customers left and right. 

On top of reliable money transfers, people and businesses can take advantage of many other benefits that a Wise account has to offer.

>> Go to Wise review

Benefits of digital banking

Digital banks are also called mobile banks, neobanks, challenger banks, online banks, and other similar versions. 

We’re living in a golden age of digital-only banking because these new challenger banks offer many benefits to those willing to take the leap from Aussie big institution banks. However, people are still reluctant to sign up for one of the challenger banks. 

The benefits of digital banking usually include convenience, increased transparency, easier travel, and no hidden fees. Still, there are plenty more benefits exclusive to each digital bank, which may help you decide which is the right bank for you.

Let’s see what mobile-only banks bring to the table.

Low to no fees

If you’re sick of paying exorbitant fees every month for banking services that you mostly don’t use and don’t even need, you’ll be glad to know that Aussie challenger banks but also international ones such as Revolut or Wise charge little to no fees for their financial products and services. 

Digital-only banks still make money, but their business model doesn’t include ripping off their customers with excessive fees.

Higher interest rates

It’s a recognised fact that big banks will give you appalling interest rates, if any. How does 0.05% sound to you? Digital banks can provide their customers with higher interest rates on savings accounts because they save on overhead costs like retail space and bank cashiers. 

You can even get an interest rate on your checking account balance in some cases.

Easy to apply

The benefits of digital banking often begin with the signup, which takes place online or on an app. The process involves entering some personal details before authenticating your identity, this usually takes a few minutes before your account is approved and your bank account is open. 

This online, no paperwork process is far more convenient than most traditional banks are capable of and equally secure.

Convenient

The ability to apply for a bank account online is not the only convenient thing. Pretty much everything else that involves your finances can be done from your sofa as well, including applying for a mortgage. Open your banking app, find the menu, and you’re halfway there.

Budgeting and analytics

It is also a common theme across digital banks to provide customers with real-time spending notifications which help them stay up-to-the-minute on their spending, along with spending categorisation allowing customers to get a closer look at where their money is going. 

For many of Australia’s digital banks, these features also come hand in hand with innovative budgeting features that work automatically to help save money or calculate what is safe to spend.

Cashback 

You don’t need a credit card anymore as some mobile-only banks offer cashback on everyday purchases. It was about time you got something back! You can even get cashback rewards in cryptocurrency now. 

Travel

Another benefit of digital banking and the reason these banks attract frequent travellers is that many offer low fees on travel money. Many digital banks place low to no fees on transactions abroad or overseas ATM withdrawals, allowing their customers to not return home from their travels to a long list of unexpected bank fees.

Drawbacks of digital banking

Digital banking isn’t perfect, and most of the independent fintech companies were only founded less than 10 years ago (some only a couple of years ago). So, there are still some teething problems.

Nevertheless, let’s look at some of the drawbacks to digital banks in Australia. 

Customer service 

This is arguably the most significant disadvantage over big banks. Because there are no physical branches, you have to do all your troubleshooting online. This can be a less than perfect solution, especially if you have a time-sensitive and costly problem to deal with. 

Although all the apps have a chat function, sometimes there might be a substantial waiting period, or there’s only a chatbot available to answer your questions. Granted, some big banks are offenders as well.

Fewer financial products 

Some digital banks have a barebones account with just a few add-ons and that’s it. That doesn’t necessarily have to be bad. Not everyone needs savings, investing, mortgages, loans, and so on from their bank account. Sometimes, simpler is better.

Fewer options for depositing

This one comes down to the lack of physical branches. If you have cash on your hands that you want to deposit into your account, you might find yourself at a dead end. The same goes for cheques, as all neobanks can’t scan a cheque with your phone.

How safe is digital banking?

So far, digital banks have primarily appealed to millennials whose lives are already largely integrated with technology; however, many people may still be slightly sceptical about the security of newer services. 

Digital banks are at the forefront of security technology, and in many cases, they are leading the way for traditional banks to follow. Digital banks’ hi-tech security methods can be seen in the signup process where fingerprint scanning, voice recognition, and facial recognition are used to authenticate customer identities before approval. 

They also offer instant freeze and unfreeze features that provide customers with peace of mind about their money security.

The available banks either hold an Authorised Deposit-Taking (ADI) licence or a restricted ADI license, meaning some offer a fully-functioning current account and debit card with deposits of up to $250,000 guaranteed by the Australian government, while others are still on their way to offering a fully licensed and guaranteed account.

What features do digital banks offer that traditional banks don’t?

  • Quick and easy online application
  • Approval within minutes 
  • No tedious paperwork required
  • Advanced analytics features
  • No hidden fees
  • Fewer to no fees for transactions and ATM withdrawals abroad
  • Savings accounts or non-savings accounts with interest
  • Monthly reports and forecasting
  • In-app customer service
  • Bill splitting

How to get started with digital banking

The best thing about digital-only banks is that you can apply for most online accounts in 5-10 minutes or even less. Visit your mobile bank’s website and click or tap ‘Get started’. You can also download the banking app from Google Play or Apple’s App store yourself. 

To open an Australian online personal banking account, you have to be 16 years old or over,

an Australian citizen or permanent resident with an Australian residential address, and have:

  • an Australian driver licence, birth certificate, passport or Medicare card handy (you’ll need at least one of these)
  • an Australian mobile number.

The bottom line

Each of Australia’s digital banks offers a different service that will suit different personal finance needs and goals.

Many of the current accounts on offer, from Hay, Up, and 86 400, come with little to no fees to create more transparency between the bank and the customer. Their current accounts also come with a range of tools and features that help customers understand their finances better and make more informed decisions. 

This includes monthly spending reports and spending categorisation that allows customers to gain more in-depth insight into their finances. 86 400 is one of the banks that offers bill detection and reminders, so their customers never miss a payment. Some banks also provide future projections that help you plan for spending and saving.

Some of Australia’s digital banks, including Up, 86 400, and Volt, also offer their customers innovative saving solutions. There are options for savings accounts with good interest rates, 86 400 is offering withdrawals without losing interest, and Volt is offering to provide particularly high rates on interest on customer savings. 

Up also features a round-up feature that allows customers the chance to turn their spare change into savings.

Whichever digital bank you choose, they’ll continuously be working on updating their products, features, and services in line with the latest fintech innovations, allowing their users to be the first to benefit from them.