Best savings account but read the fine print
After getting married at the start of the year, my wife and I did some research on how to best consolidate our separate saving accounts and which products were the best on the market. For the purposes of newly-married, middle-class, young adult...
Full review
After getting married at the start of the year, my wife and I did some research on how to best consolidate our separate saving accounts and which products were the best on the market. For the purposes of newly-married, middle-class, young adult workers wanting to save from somewhat scratch (i.e. you don’t have close to $200K in savings!), UBank’s USaver with Ultra was hands down the best option we came across, with the highest interest rate of 4.37% (with at least $2000 deposited into a linked USaver account from an external source) and no account keeping fees. The Ultra account is technically a transaction account that comes with a Visa Debit Card which gives you free access for your money from a rediATM or NAB ATM. You can access your savings directly with no reservations as there is no bonus interest rate based on a “can’t touch this” money policy. You just need to deposit the minimum $2000 per month. The UBank smartphone app also makes for easy online banking. There are just a couple of fine print details that should be clarified. First of all, any money in the Ultra account DOES NOT EARN ANY INTEREST! When you first read the account description and see the high interest rate, you’d assume that you need to transfer all your savings into the Ultra account. But the interest is actually applied to the linked USaver account! Therefore, in order to earn the most amount of interest, you need to keep your savings in the USaver (which is a separate account) and minimise the amount in the actual Ultra account. UBank has introduced a ‘sweeping’ mechanism that rolls over money into your Ultra (transaction) account from its linked USaver when there is less than a certain amount of money in the Ultra. This minimum balance is preset to $500. Below this, your Ultra gets topped up to $500. Vice versa, your excess Ultra money trickles down into the USaver when there is more than a certain amount, which is preset to $2500. The thought here is to make savings money available to you, with the help of a Visa Debit Card which makes cash withdrawals free from certain ATMs. But I think this also helps to encourage spending. If your intention with UBank is just to save as much as you can, don’t use the Visa Debit Card (in fact, you can even cut it up like my wife and I did). In order to maximise interest in your USaver, go to the Accounts settings and lower the sweeps limits of your Ultra account to the lowest possible range of $100-$1000 (cf. preset range of $500-$2500). Secondly, it should be clarified that the Ultra bonus interest rate does not accumulate with the USaver Savings Bonus of 0.70%. If you qualify for the Ultra Bonus, you do not receive the USaver Savings Bonus. This means that if you already have at least $2000/month coming into your Ultra or linked USaver, it is redundant for you to also set up scheduled Automatic Savings Plan (ASP) transfers of $200/month into your USaver thinking that you’ll get the additional USaver Savings Bonus. You won’t!
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