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UBank USaver - online savings account with high interest

 
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Old 06-08-2009, 06:13 PM   #1
Sim
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UBank USaver - online savings account with high interest

NAB's UBank have just launched their USaver online savings account product: USaver - UBank - A good place for money. Backed by NAB

It's yet another entrant into the increasingly crowded market segment, but there are a few differences to the other accounts I've seen and used:
  • Very fast online setup - no paper forms to fill out and no branches to visit!
  • Can have your salary paid directly into it
  • Can pay money to pretty much any other bank account (pay anyone)
  • High interest rate - currently 5.11%pa (will be interesting to see how long this lasts)
  • Can transfer money in by cheque (handy for amounts higher than the typical EFT daily limits)

I've set up a couple of accounts - I am sitting on a bit of cash at the moment so I figure I may as well take advantage of the higher interest rates being offered (far higher than the account I have been using!)

Press release: UBank launches on-line savings account with unbeaten interest rate
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Old 06-08-2009, 07:10 PM   #2
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Hi Sim,

Why would anyone put money in their term deposits between 3.06% to 4.91% when you can get 5.11% at call?

PS How does UBank make money if they are paying those sorts of rates? Obviously not homeloans at about 4.99% from NAB.

Cheers,

Dan
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Old 07-08-2009, 08:23 AM   #3
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Quote:
Originally Posted by AsxBroker View Post
Hi Sim,

PS How does UBank make money if they are paying those sorts of rates? Obviously not homeloans at about 4.99% from NAB.
Easy, borrow from the depositor at 5.11%, write a couple of (say 2) home loans at 4.99%. Profit mad 4.99*2-5.11=4.81% profit.

I forget exactly how much a bank can lend on top of their deposit base. But it works something like that. They leverage the deposits to buy more investments (banks invest in loans).

5.11% is a pretty impressive rate though.
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Old 07-08-2009, 10:45 PM   #4
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You mean fractional banking?
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Old 28-08-2009, 09:41 PM   #5
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Hi Gang,

In regard to the interest bonus of 0.10% when a monthly savings plan of $100 or more is setup be aware that if you have more than $150K in the account it doesn't apply. This wording has caused confusion where some assume that you still get the bonus interest on the first $150K even if you have greater than this amount in the account.

Therefore simply setup multiple accounts with less than $150K in each. New accounts can be created on the fly once the first account is setup.

I'm really impressed with the USaver online banking facility. It will be interesting to see how long NAB maintain the current high rate of %5.11!

Cheers - Gordon
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Old 06-11-2009, 05:12 PM   #6
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I have a USaver now and I just received this email in regards to rate rises (and competition)

Quote:
Hello,

We wanted to share with you some good news - your USaver rate will increase from 5.11%p.a. to 5.46%p.a. effective from Tuesday 10 November. So with USaver you can now set and reach your savings goals even faster.

We’ve also just announced the 'USaver Rate Assurance' - for the duration of this rate assurance we will review the USaver interest rate each Friday against leading competitor products. If the USaver rate is lower than any of these competitor products (including ‘introduction rates’) we’ll raise the UBank USaver rate to at least that rate.

The competitor accounts covered by this rate assurance are:

- ING Direct Savings Maximiser
- Bankwest TeleNet Saver
- Commonwealth Bank NetBank Saver
- Westpac eSaver
- ANZ Online Saver

We may change this list at any time without notice by posting a revised list on our website ubank.com.au

Got questions? Give us all anytime on 13 30 80.

Speak soon,

Gerd Schenkel
General Manager - UBank

How we implement this rate assurance: The initial duration of this rate assurance is until 31 December 2009. We may at our sole discretion extend this rate assurance. If we do not extend this rate assurance, it will expire on midnight of 31 December 2009. We will review the relevant rates at least once per week on Friday - but we may choose to review rates more frequently. If a relevant competitor product has a higher rate than our UBank USaver, we will increase the UBank USaver rate by the following Friday from the rate review (this is to allow us to update all advertising to the new rate). For example, if we decide to raise the UBank USaver rate on Friday, the new rate will be effective on the following Friday. We will use the relevant competitors' websites as a source of the comparison prices. Advertised "introductory" rates areincluded in this rate assurance. Unadvertised rates are notincluded in this rate assurance.
Looks like its not just a 'headline' rate or such offered by other institutions, at least for now. 5.56% with that .1% bonus is quite a good rate of return imo!

Cheers,
David
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Old 06-01-2010, 06:02 PM   #7
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Raboplus may also be worth a look.

They're an online arm of Rabobank (probably a familiar name if you're a fan of watching the Tour de France. ) and their AAA rating is apparently the only one at that level in Australia.

Raboplus

When you open an account you automatically get 3 - the High Interest (4.5% currently), Premium Saver (5.5% if you make a small monthly increase) and Managed Fund trading a/cs. You can choose to use only the one(s) you like and leave the others unused. Same deal with linking it to an account with your regular bank to shift funds backwards and forwards as needed.

I'm currently using mine to park cash between term deposits and also build the next parcel to invest. Their term rates bob up and down too, so I've been watching those. In the last few weeks their 5 year rate has gone from 7% to 6.8 to 6.6 and now back up to 7%.

Cheers,

Chris

EDIT:

Incidentally, Raboplus provide you with a free Digipass, which is a small hand held gizmo that generates additional numbers to increase the level of log-in security. This might be an attraction for some, or seen as an unwanted extra task by others. I have a similar thing from Bendigo Bank (which they charged $20 for) and Westpac use a text message system sent to your mobile for some 'extra security' tasks.

Last edited by Magpie; 07-01-2010 at 06:58 PM. Reason: Add info
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Old 10-01-2010, 10:17 AM   #8
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Just for fun...


Would anybody like to take a punt on guessing where these online accounts will stand by the end of the year?

At present Ubank is a new 'product' that seems to be being aggressively priced to attract attention and funds. Their site even contains the sort of rhetoric more familiar in certain retail sectors. Retailers often say "If you can find a better price we'll beat it by....X%" and Ebank has promised to review the rates of six of their competitors every week and at least match them. (Offer valid until end of March).

As far as I can see, Ubank, Bankwest and Raboplus are all pretty much level pegging with Ubanks's nose currently in front on the basis that they don't require a saving pattern to be maintained. Westpac aren't far behind, but you have to ring every 4 months and prompt them to renew the 'Introductory Rate' (which they will apparently currently keep doing as long as you remember to ask). As far as I can see, Westpac currently seem more interested in staying in front of the term deposit pack with aggressive pricing of 'specials'.

Anybody like to guess how this particular arm wrestle (the online at call accounts like Ubank and various eSavers) will unfold this year?

Cheers,

Chris
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Old 03-03-2010, 11:14 AM   #9
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To me, Ubank's single most appealing factor is that there is no conditional "bonus" interest rate. If you read the fine print, other accounts have much lower "base" interest rates, and they pay a higher interest rate on some condition - in the case of Bankwest, you only get the higher rate if you don't withdraw any money within the month. So you could leave your savings untouched for 30 days, but withdraw $1 on the 31st of the month, and bam, you get penalised.

The overall effect of such "bonus" systems is to make it something of a hybrid between a term deposit and a true on-call account. You only get the higher rate if you don't touch it, which negates the entire reason for having it on-call in the first place.

Ubank pays the one rate regardless of whether or not you withdraw during the month, or whether or not you deposit more money during the month. Combined with the best rate on the market, and also the fact that you can transfer to third parties directly, Ubank is by far the superior product on the market IMO. Even if other accounts had a higher rate, if it's conditional on not withdrawing during the month, Ubank would still be better IMO because they don't have such penalties (at least at the moment anyway)... hopefully they realise this factor is an advantage their product has over the rest of the market.
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Old 05-03-2010, 08:42 AM   #10
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Quote:
Originally Posted by mustgroove View Post
To me, Ubank's single most appealing factor is that there is no conditional "bonus" interest rate.

...

Ubank pays the one rate regardless of whether or not you withdraw during the month, or whether or not you deposit more money during the month.
Technically there is a conditional bonus interest rate - they pay an additional 0.1% pa if you set up an automatic monthly savings plan of at least $100.

... but I do get your point ... this bonus is relatively trivial - icing on the cake, rather than necessary to achieve a decent rate.

Their base rate is so much better than anyone else's and they have far more flexibility in how you can manage your money than just about any other product, which I why I like it.
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