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

Every Friday, UBank reviews the competition and makes changes as they see fit. The question is: will UBank take the bait and add the Citibank Online Saver to its list? If it does, it will be forced to match Citibank’s introductory rate of 5.5%. If it doesn’t, would UBank’s customers feel it is shirking its promise to lead the field? With the fickle high-interest savings account market largely driven by interest rates, can UBank afford to concede defeat over Citibank’s introductory period?

If Ubank fails to match the Citibank rate we could well see a raft of increasingly technologically and fiscally savvy consumers opening a Citibank Online Saver account for six months to take advantage of the higher rate and then transferring it back across to their USaver when the promotional period ends. With the ease of online money transferring and account application, this could pose a real and direct threat to the USaver.

As the adage goes, ‘you can’t win a war on a peacetime budget’, and the longer UBank fails to acknowledge the threat posed by Citibank, the greater chance it has of losing what market advantage it currently has.

So will battle lines be drawn? Keep your eye on the fireworks right here, as we bring you UBank’s response from the front lines tomorrow.

Compare savings accounts at mozo.com.au

The answer lies in the little asterisk that sits next to Citibank’s brand new interest rate, making me a little bit uneasy – like sitting next to unexploded ordnance. First, let’s check out the big print numbers:

UBank USaver = 5.46%
Citibank Online Saver = 5.50%
UBank USaver = maximum amount of money you can have before you are subject to lower interest is $1,000,000.
Citibank Online Saver = maximum amount of money you can have before you are subject to lower interest is $2,000,000.

Pretty convincing, huh? But before you take that spare $1,999,999.99 and plunk it into the Online Saver, let’s dig a little deeper.

While Citibank does have the higher interest rate, it’s only for the first 6 months after opening the account. And then USaver has the option of setting up an automatic savings plan which gives you an extra 0.10% (for balances of up to $150,000) if you put away a minimum of $100 per month. So if you’re prepared to commit a small amount more to your savings (and $100 a month isn’t such a hard ask), you’re looking at a variable rate to 5.56% with no other strings attached.

The only real benefit that the Citibank account has over the USaver is that you can have up to $2,000,000 in your account before the interest rate drops back to their standard variable rate of 4.25%. Whereas the USaver rate stays at a minimum of 5.46% for balances up to $1,000,000.

Compare savings accounts at mozo.com.au