The Best Online Banks in Australia (2025 Guide)

Online banking has completely changed how we manage our money.

Gone are the days of waiting in line at a physical branch – now everything happens right from your phone.

But with so many options available in Australia, which online bank should you choose in 2025?

I've spent years testing different online banks, opening accounts, using their apps, and speaking with their customer service teams. This comprehensive guide shares everything I've learned to help you pick the best option for your needs.

What You'll Learn in This Guide (it’s a big one)

• The top online banks in Australia for 2025 (according to me)
• How to choose the right online bank for your specific needs
• Detailed comparisons of the banks I use – Ubank, upbank, ING, and Macquarie Bank
• The key features that make online banks worth switching to
• How to maximize your interest earnings and minimise fees
• How to integrate online banking into your broader financial strategy
• Tips for using online banks to improve your budgeting

The Rise of Digital Banking in Australia

Traditional banking is being disrupted, and that's a good thing for us consumers.

Digital-first banks are offering better rates, lower fees, and more innovative features than their brick-and-mortar counterparts.

The pandemic accelerated this shift, with more Australians embracing digital banking solutions out of necessity.

Now, in 2025, online banks have become mainstream, with even traditional institutions investing heavily in their digital offerings.

What makes online banks different?

They operate with lower overhead costs because they don't maintain physical branches.

This allows them to offer more competitive interest rates on savings accounts and fewer fees on everyday transactions.

What Makes a Good Online Bank?

Before diving into specific recommendations, let's look at what features you should prioritize when choosing an online bank:

1. User-Friendly App Experience

The app is your bank branch now, so it needs to be intuitive and reliable.

The best online banks offer apps that make it easy to:

• Check balances and transaction history
• Transfer money quickly
• Pay bills and schedule payments
• Track spending by category
• Set up savings goals
• Provide notifications for money going in and out

2. Competitive Interest Rates

With inflation still a concern in 2025, getting a good interest rate on your savings is crucial.

The best online banks typically offer rates that are at least 1-2% higher than the market averages.

There also shouldn’t be too many hoops to jump through just to get the good rates either.

3. Low or No Fees

You shouldn't be paying monthly account fees or transaction fees with a good online bank. Look for:

• No monthly maintenance fees
• Free ATM withdrawals (or rebates)
• No foreign transaction fees
• Free electronic transfers

4. Security Features

With increasing cyber threats, security is paramount. Top online banks offer:

• Two-factor authentication
• Transaction notifications
• Ability to lock/unlock your card
• Fraud monitoring systems

5. Customer Service Options

Even without branches, you need reliable customer support. Look for banks offering:

• In-app chat support
• Phone support with reasonable hours
• Email support with quick response times

Now that we've established what makes a good online bank, let's examine how Australia's top digital banks measure up against these criteria.

I'll share my firsthand experiences with each bank and highlight where they excel—and where they fall short—to help you determine which one best fits your needs.

The Best Online Banks in Australia (2025)

Based on my personal experience and extensive research, here are the top online banks in Australia right now (according to me):

Ubank

Best for: High interest rates, spending insights and those saving for multiple goals.

Ubank, owned by NAB, has transformed itself into one of Australia's leading digital banks.

After merging with 86400 in 2022, they've combined Ubank’s competitive interest rates with 86400's innovative technology.

Key Features:

• Top-tier savings rate (currently offering 5.10% as of March 2025)
• Connect accounts from other banks for a complete financial view
• Excellent spending categorisation and insights
• Desktop and mobile access options
• Quick to update rates after RBA announcements
• Multiple savings accounts to support envelope-style budgeting

Considerations:

• Requires $200 monthly deposit to earn the bonus interest rate
• More traditional in its approach compared to some newer banks
• Don’t offer credit cards
• More ideal for single transaction accounts and multiple saver type setups

Read my full ubank review here

UpBank

Best for: User experience and innovative features that gamifies personal finance.

Up Bank, backed by Bendigo Bank, has created one of the most innovative banking experiences available in Australia.

Their approach reimagines what a bank can be.

Compared to anything else it is a very different type of banking experience

Key Features:

• Outstanding app design with intuitive gesture controls
• Savings “challenges” to help you reach goals
• MayBuy feature to save for specific purchases
• Automatic bill prediction and reminders
• No foreign transaction fees
• Round-up savings feature to automate your savings habit

Considerations:

• Slightly lower interest rates than Ubank (currently 4.35%)
• App-only experience (no desktop option)
• Requires 5 transactions monthly to earn bonus interest
• Don’t offer credit cards

Read my full Up Bank review here

ING

Best for: Good interest rates, ATM rebates and global accessibility with the feeling of a traditional bank

ING has been a pioneer in the online banking space and continues to offer a solid experience in 2025.

Key Features:

• ATM fee rebates (conditions apply)
• No foreign transaction fees
• Competitive savings rates
• Established brand with proven stability
• Full suite of financial products (home loans, insurance, investments)
• Simple, clear and obvious interface

Considerations:

• Stricter conditions to earn bonus interest rate
• App experience not as modern as Up Bank or Ubank
• Missing features common to most banks now (like bill planners, spending insights)

Read about ING Savings Maximiser or how it compares to Ubank.

Macquarie Bank

Best for: Full service banking and customer service that includes home loans, credit cards and high interest with no requirements to get it.

Macquarie offers a high-end digital banking experience with excellent customer service.

Key Features:

• Consistently high interest rates with no triggers
• No foreign transaction fees
• Local customer service
• Detailed transaction categorisation
• Integration with accounting software
• Open banking compatibility
• Excellent transaction search functionality for budget reviews

Considerations:

• Not as feature-rich for budgeting as some competitors
• More focused on home loan customers
• Dated looking app and interface

Read my full review on the bank and my experiences using Macquarie

Head-to-Head Comparisons

Ubank vs. upBank

I've used both these banks extensively, and they each have their strengths.

Here's how they stack up against each other:

App Experience:

• Up Bank offers a more innovative, gesture-based interface that feels very modern, plus a lot of automation available.
• Ubank has a more traditional but still well-designed app with the advantage of desktop access as well

Interest Rates:

• Ubank typically offers about 0.75% higher interest than Up Bank

Unique Features:

• Up Bank: Savings challenges, conversational payment history, MayBuy feature, heaps of visual settings and options
• Ubank: Connect other bank accounts, detailed spending analysis, better visualisation of savings growth

Who Should Choose Each:

• Choose Up Bank if you value innovative features and a cutting-edge mobile experience
• Choose Ubank if you want higher interest rates and a more comprehensive financial overview or need joint accounts

Read my detailed ubank vs Up Bank comparison

ING vs. Macquarie

While I've focused more on Ubank and Up Bank, ING and Macquarie represent two other excellent options:

Interest Rates:

• Both offer competitive rates, with Macquarie often slightly higher
• ING requires more conditions to earn their maximum rate

Unique Strengths:

• ING: ATM rebates, established digital banking history
• Macquarie: customer service, multiple offset accounts and high interest rates without any minimum requirements

Who Should Choose Each:

• Choose ING if you travel frequently and value ATM access worldwide
• Choose Macquarie if you want premium service and multiple saving accounts

How Online Banks Can Improve Your Budgeting

The right online bank can transform your approach to budgeting. Here's how to leverage these digital tools:

Automated Tracking and Categorization

Most online banks now automatically categorise your spending, giving you insights without the manual work.

This addresses one of the biggest barriers to effective budgeting – the chore of data entry.

Multiple Account Structure for Zero-Sum Budgeting

If you follow the zero-sum budgeting method (where every dollar has a job), online banks can make this significantly easier:

1. Create separate savings accounts for different purposes (emergency fund, holiday, new car)
2. Automatically distribute incoming funds across these accounts
3. Monitor progress toward specific goals visually

This approach ensures you're not just saving randomly but allocating funds with intention.

Automation for Consistency

The best financial systems are the ones you don't have to think about.

Online banks excel at automation:

• Schedule regular transfers to savings on payday
• Set up bill payments to avoid late fees
• Use round-up features to build savings from everyday spending

See my full guide on setting up your budget to get this going for you today

Real-Time Spending Alerts

Instant notifications when money leaves your account creates awareness around spending – a crucial element for staying on budget.

This immediate feedback loop helps you maintain spending discipline.

ubank, upbank and Macquarie all offer these alerts.

Online Banking for Couples

Managing finances with a partner?

Online banks now offer some distinct features to help you keep transparency strong:

Joint Account Capabilities

Most of the banks mentioned above offer joint account options with features that make shared finances easier:

• Individual logins with equal access
• Transaction notes to communicate about specific purchases
• Clear visibility of all transactions for transparency

The “Yours, Mine, Ours” Approach

Many couples find success with a hybrid approach to finances – shared accounts for joint expenses and individual accounts for personal spending.

Online banks make this easy:

1. Joint everyday account for shared bills and expenses
2. Joint savings accounts for common goals (holidays, home deposit)
3. Individual accounts for personal discretionary spending

This system provides both transparency and autonomy – crucial for healthy financial relationships.

Read more on this topic in my article on combining money with a spouse

Real-Time Visibility

The ability to check balances and transactions instantly helps prevent miscommunications about money – one of the most common sources of relationship tension.

How to Choose the Right Online Bank for You

With so many good options, how do you decide? Consider these factors based on your personal needs:

For Savers Focused on Maximum Interest

If your primary goal is earning the highest interest on your savings:

1. Ubank currently offers the highest readily accessible savings rate
2. Macquarie Bank is very close behind and has no requirements to get the good rates
3. Consider whether you can meet the conditions (like minimum deposits) to earn bonus rates for banks like upbank or ING.

For Tech-Savvy Users Who Value Innovation

If you want the most cutting-edge banking experience:

1. Up Bank offers the most innovative features and interface
2. Ubank provides a good balance of modern features with traditional banking stability
3. Consider how important desktop access is to you (upbank does not offer this)

For Frequent Travelers

If you travel internationally often:

1. ING offers global ATM fee rebates (conditions apply)
2. Up Bank and Ubank both offer no foreign transaction fees
3. Consider which bank offers the best exchange rates for international transfers

For Budgeting and Financial Management

If tracking spending and budgeting is your priority:

1. Up Bank offers excellent automatic categorization and insights
2. Ubank allows you to connect accounts from other banks for a complete financial picture
3. Consider which visual style of reporting you prefer

For Couples Managing Joint Finances

If you're managing money with a partner:

1. Look for banks with true joint account functionality like ING or Macquarie
2. Consider those with multiple sub-accounts for different savings goals

3. Assess how easily you can transfer between shared and individual accounts
4. Understand whether all your savings accounts get the good interest rates or just one

Integrating Online Banking Into Your Financial Strategy

Online banks work best when they're part of a broader financial strategy.

Here's how to incorporate them into your overall financial plan:

The Foundation: Emergency Fund

Before investing or tackling other financial goals, establish an emergency fund in a high-interest online account.

Aim for 3-6 months of essential expenses in an account you can access quickly but aren't tempted to use regularly.

The Structure: Account Hierarchy

Consider structuring your accounts in tiers:

1. Everyday spending account – Where your income arrives and bills are paid
2. Short-term savings – For goals within the next 12 months
3. Medium-term savings – For goals 1-5 years away
4. Long-term investments – For retirement and goals 5+ years in the future

Online banks excel for the first three categories, while the fourth might involve investment platforms or superannuation.

The System: Regular Money Flow

Create a system where money flows automatically through your accounts:

1. Income deposited into everyday account
2. Automatic transfers to savings accounts on payday
3. Regular sweeps of excess funds to higher-interest accounts

This “pay yourself first” approach ensures saving happens before discretionary spending.

Making the Switch: How to Open an Online Bank Account

Ready to open an account with one of these banks? The process is typically straightforward:

1. Download the app of your chosen bank
2. Verify your identity using your driver's license, passport, or Medicare card
3. Link an existing bank account to make your initial deposit
4. Set up your payroll deposit if you want to make it your primary account
5. Explore the features and set up any automatic savings plans

Many of these banks offer sign-up bonuses for new customers:

• For Ubank: Get a $30 bonus when you download the app and create a free account using code PM5BLA6 and make 5 purchases within 30 days
• For Up Bank: Receive a bonus of $20 when you create a new account

FAQs About Online Banking in Australia

What is the most trusted online bank in Australia?

While trust is subjective, banks backed by major financial institutions tend to have more established reputations. Ubank (owned by NAB) and Up Bank (backed by Bendigo Bank) both have the security of established banking partners while offering innovative features.

Which bank has the best app in Australia?

Up Bank consistently wins awards for its app design and user experience. Its intuitive gesture controls and clean interface make banking feel almost enjoyable.

Which bank is most secure for online banking?

All Australian banks must meet strict security requirements set by APRA and other regulatory bodies. That said, look for banks that offer two-factor authentication, instant notifications, and the ability to lock your card instantly from the app.

Can I deposit cash with an online bank?

Yes, though the methods vary. Up Bank offers Bank@Post services, allowing you to deposit cash at Australia Post locations. Other online banks may offer similar services or partnerships with ATM networks that accept deposits.

What happens if an online bank goes out of business?

Deposits up to $250,000 with authorized deposit-taking institutions (ADIs) are protected under the Australian Government's Financial Claims Scheme. All the banks mentioned in this guide are ADIs.

How do I transition from traditional banking to online banking?

Start by opening an online account while keeping your traditional account active. Move services over gradually – first your everyday spending, then savings, then automatic payments. Once everything is running smoothly for a few months, you can decide whether to close your traditional accounts.

Can online banks handle all my financial needs?

For most everyday banking, online banks are more than sufficient. However, for complex needs like business banking, trust accounts, or certain investments, you might still need traditional banking services or

The Future of Online Banking

As we move through 2025, the distinction between “traditional” and “online” banks continues to blur. Traditional banks are investing heavily in their digital offerings, while online banks are expanding their service ranges.

Some trends to watch:

• Open Banking initiatives making it easier to switch between banks
• AI-powered financial advice becoming more sophisticated
• Embedded banking services appearing in non-financial apps
• Cryptocurrency integration becoming more mainstream

My Personal Banking System

Since many readers ask about my own setup, here's how I personally manage my banking:

I use multiple banks for different purposes:

• A traditional bank in Macquarie for my mortgage and income salary from work
• Up Bank for everyday spending and short term savings
• Ubank for my emergency fund and higher-interest savings for long term goals
• Investment accounts through Stake

This multi-bank approach allows me to take advantage of each bank's strengths while maintaining a diversified financial setup.

I've arrived at this system after years of testing different online banks, including all those reviewed in this guide.

What I've learned is that no single bank excels at everything.

By strategically using multiple banks, I can maximize interest on my savings with Ubank, enjoy the innovative features of Up Bank for daily spending, and maintain access to more complex financial products through a traditional institution.

This approach might seem complex, but digital banking makes managing multiple accounts easier than ever.

The key is being intentional about which bank you use for each financial purpose.

Final Thoughts: Which Online Bank is Best?

There's no single “best” online bank for everyone. Your ideal choice depends on your specific priorities and financial habits.

If I had to recommend just one option for most people in 2025:

• Ubank offers the best all-around package with high interest rates, good app experience, and comprehensive features
• Up Bank is the best choice if you value innovation and user experience above slightly higher interest rates

The good news is that competition between these banks continues to benefit consumers. Whichever you choose, you'll likely get a better deal than you would with a traditional bank.

Remember, you can always open accounts with multiple banks to test them out – there are typically no fees to maintain accounts, and the sign-up process takes just minutes.

Getting Started: Your Next Steps

If you're convinced to make the switch to online banking, here's what I recommend:

1. Start with one account – Begin with either a savings account or everyday account at one of the recommended banks
2. Set up your financial infrastructure – Create automatic transfers, savings goals, and spending alerts
3. Gradually transition – Move your regular payments and direct deposits over time
4. Review after 90 days – Assess how the new bank is working for your needs

The beauty of online banking is that you can test drive without commitment. The small effort to switch could result in thousands of dollars in saved fees and additional interest over the years.

Disclosure: This article is not intended to be financial advice and information should be taken as educational only. Read the disclaimer.