With all Australians increasing relying on the internet for work, entertainment and general communications, it’s hardly surprising online banks and online bank accounts are now extremely popular.
Online banking virtually gets rid of the need to visit your bank branch to deposit money, transfer funds or check account statement by letting you access your money from the touch of a button. And with new digital banks and neobanks constantly evolving with innovative features, you can now pay your bills, check your balance and transfer cash no matter where you are, anytime of the day or night.
But is banking online safe? What are the other advantages of online banks? If you need help, will you have access to customer support? We’ll run through all these questions and more in this detailed guide.
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Online only banks vs online banking
Online banks, which are often referred to as ‘digital banks’, offer many of the same products and services as traditional everyday bank accounts, only they let you carry out all your banking activities online.
This means you can make your credit card repayments, set up direct debits for your electricity account, use BPAY to pay your rent and check your account statement by tapping away on your laptop or smartphone
Most banks and financial providers in Australia offer online banking services, but there are some online only banks that don’t have any branches. However, even though these banks don’t offer face to face banking, they let you manage your money through Internet banking, phone banking and ATMs. Some of the popular online banks in Australia are, ING, RaboDirect and UBank.
Then what are neobanks?
Just like an online-only arm of a traditional bank, neobanks operate 100% online. However, the difference is they exist independently to traditional banks. Neobanks still offer all of the same financial services as traditional banks like savings accounts, money transfers and loans, but by being completely online, they don’t have any branches for you to visit. Instead, they target tech-savvy demographics with services that collect personalised data and customise the online banking experience.
As more people feel comfortable with this banking technology, fresh neobanks are beginning to emerge. This rise of neobanks is driven by their competitive approach to challenging traditional banks (especially the big 4) with low rates, minimal fees and innovative app features and other tech-savvy advances.
There are plenty of neobanks entering the market, and they are increasingly accessing unrestricted Authorised Deposit-taking Institution (ADI) licenses. This means more neobanks have the same licensing as traditional players.
Key advantages of an online bank account
Some of the main benefits of online banking are:
You can apply online. One of the most convenient things about opening an online bank account is that you don’t need to visit a branch in person to submit an application. Simply compare the best bank accounts with Mozo, head over to the bank’s website, fill out the form, enter the required information, upload documents and hit the apply button. The entire process hardly takes any time and can be done from the comfort of your couch.
You can access your funds on the go. Online banking lets you access your cash from anywhere in the world as long as you’re connected to the Internet. So whether you’re on the bus to work or vacationing in Bali, if you suddenly realise you need to pay a bill, you can tick it off with ease online.
You can set up automatic debits. Online banking lets you set up automatic payments via direct debits and BPAY, which means you don’t need to worry about being stuck with late payment fees ever again.
You can schedule payment alerts. If you’re not comfortable setting up direct debits through your bank account, and would prefer to be notified as to how much you’re being charged for different services every month, you can schedule reminders to tell you about payment deadlines.
Transfer money overseas. You can easily transfer money to bank accounts not just in Australia but also overseas using online banking.
Paperless banking. Online accounts are environment friendly because with instant access to all your banking information online, you won’t need printed statements and other documents.
One platform to manage all accounts. The online banking dashboard lets you manage all your linked accounts in one place. So if you have an everyday transaction account, a savings account and a super account with one bank, you can view your balance, set up transfers and schedule transactions for all accounts through one online login or mobile app.
Frequently Asked Questions
Is it safe to use online banks?
Online banks operating in Australia are as safe as regular banks and your funds are protected by the Australian Government Deposit Guarantee Scheme. This scheme guarantees deposits up to $250,000 in Authorised Deposit-taking Institutions such as banks, building societies and credit unions.
However, it’s always good to be cautious while sharing your personal and financial details online, particularly if you’re using a shared device. Your bank will have a range of security measures like system encryption and firewalls to protect you from fraudulent transactions online, but it never hurts to be extra careful and login to your bank account only when you’re connected through a secure network. You should also make sure you never share your password or PIN with anyone.
What about customer support?
While most online bank accounts also come with branch access for customer support, some financial providers are online only. But you don’t need to worry about that because you can have any concerns addressed online via email or online chat services as well as over the phone.
Do online banks provide access to ATM withdrawals?
Yes, like any other bank, online banks in Australia let you access your money through ATMs. Online banks generally tie up with a wide network of ATMs, which means if you have an online account, you should be able to access most ATMs in Australia for free. Some online banks may have conditions, like needing to deposit a certain amount in the account every month for the ATM withdrawal fee to be waived.
How useful are mobile banking apps?
Most major banks these days let you manage your money through a mobile banking app, which is at your fingertips 24 hours a day. Features include letting you transfer money across different accounts, check your bank balance, pay your credit card bill, find the nearest ATM and lock a lost debit card from your smartphone.
How to find and apply for an online bank account?
Finding an online bank account these days is very easy considering almost every financial institution in Australia offers online banking services. Shortlist your options by using Mozo’s bank accounts comparison table and then choose one that suits you best.
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