ubank savings interest rate cut

The NAB Reward Saver account pays a variable base interest rate of 0.05 per cent per annum and a bonus interest of 0.55 per cent. You're eligible for the bonus. Rather sad that you slashed the USaver savings interest rate by 0.31% and by more than the RBA rate reduction. accounts reduced by. Bonus rate condition Deposit at least 1000 from an appropriate bank mode to. C The standard fixed interest rates for. ubank savings interest rate cut

Ubank savings interest rate cut -

Historical CD Rates: Highs, Lows and the Stories Behind Them

If you’re searching for the highest rates for certificates of deposit, knowing some history can offer some useful perspective. What counts as high yields has changed over time.

CDs have been around in some form since the 19th century and they still appeal today. Unlike a regular savings account, a CD has a fixed rate and term.

In the early 1980s, CD rates reached highs unimaginable now: double digits. Fast-forward to 2019, when a five-year CD rate was just above 3% annual percentage yield. Continue on to the present and the best rates tend to be closer to 0.80% APY.

But these numbers don’t tell the whole story. Understanding why rates fluctuate can help adjust your expectations when you're looking for the best CD for you.

» Want to jump to present yields? See the best CD rates for this month

CD rates: 1980s to 2000s

The highest CD rates in modern history are decades behind us — around the start of the 1980s. A three-month CD in December 1980 earned 18.65%, according to data from the Federal Reserve Bank of St. Louis. But it wasn’t a time of economic prosperity, with two back-to-back recessions, high unemployment and double-digit inflation.

So why were CD rates decades ago astoundingly high by today’s standards?

During the 1970s and early 1980s, "the Fed raised [its] rates to keep up with inflation," says Gus Faucher, chief economist at PNC Financial Services.

Banks followed the Fed’s lead with higher CD rates. But these CDs' actual returns were much lower than the percentages suggest. The reason? High inflation.

Inflation cuts into the spending power of the dollar, making goods today cost more next year. If inflation is, say, 15%, and a CD rate is 17%, then it's beating inflation by 2% — and that would be the real return.

» Use our inflation calculator to learn more.

"Banks could afford to pay those [double-digit] rates because of the high interest rates from the Fed. It became competitive," says Robert Frick, corporate economist at Navy Federal Credit Union. "But as soon as the Fed took its foot off the gas" and lowered its rates, CD rates fell quickly, he says.

Through the '80s and up to today, CD rates have fluctuated in booms and recessions. You could find a 5% CD rate both in the mid-'90s and the mid-2000s, on either side of a short recession in 2001. Then, came the Great Recession from 2007 to 2009, which at the time was the biggest economic downturn since the Great Depression. Recovery in the 2010s didn’t lead to the high CD rates of previous decades.

"Since the Great Recession, we’ve had historically low interest rates," Faucher says.

Average CD rates: 2010-2021

During the 2010s, rates stayed relatively flat until December 2015, when the Federal Reserve raised its rate for the first time since the Great Recession. The ensuing rising-rate environment didn’t last long, though. The drop in rates started in summer 2019 when the Fed changed its stance on the economy and lowered the federal funds rate. When the Fed lowers its rate, banks and credit unions generally take their cue to do the same for savings accounts and CDs. These institutions typically don’t raise rates until the Fed does.

High-yield CD rates: 2018-2021

But the decade-long slump in rates for traditional bank CDs isn’t the full story.

The highest CD rates tend to be at online banks and credit unions. The rise of online, or internet-based, banks in the 2010s created a new opportunity for savers to lock in CD rates far above national averages. Online banks largely operate without branches and rely on shared ATM networks or none at all, rather than having their own networks. This helps them avoid overhead costs and offer competitive rates.

Credit unions can offer strong rates too, but unlike online banks, nationwide coverage isn’t common. Many restrict membership to certain regions or groups, such as the military.

At the peak in 2019, some online banks and credit unions had five-year CD rates that surpassed 3%. Those rates have since disappeared. Online banks and credit unions responded to the Fed’s rate cuts by reducing their own APYs. Here’s a look at the past couple of years.

The drop in rates started in summer 2019 when the Fed changed its stance on the economy and lowered its rate. Online banks and credit unions responded promptly.

Where we are now: 2020-2021

In March 2020, the Federal Reserve slashed its rates to nearly zero, and many CD rates dropped quickly in response. The Fed’s action was an effort to stimulate the economy as it struggled with the initial effects of the coronavirus pandemic.

Throughout 2020, high-yield CD rates steadily dropped below 1% across all terms. By March 2021, CD rates had stayed mostly flat for several months. In a March 17 statement, the Federal Reserve confirmed that there would be no change to its rate until economic conditions such as employment improved sufficiently. The Fed added that “the path of the economy [would] depend significantly on the course of the virus, including progress on vaccinations.”

» Learn more about why CD rates dropped

Choose CDs based on your goals

History provides a helpful snapshot of what counts as high CD rates over time, but the reasons why you would get a CD matter more. Generally, you might take advantage of certificates of deposit to earmark some savings for a big goal within five years, such as buying a car or house. And CDs protect your funds without the volatility of the stock market.

CD rates tend to have higher rates than savings accounts, and once you lock in a CD’s rate, you earn that until the CD expires. CDs are safe because banks and credit unions offer federal deposit insurance to protect your money in case they go bankrupt. This safety measure has been in place since the aftermath of the Great Depression.

When you compare CD rates today, you won’t find the highest yields of all time. But you can still lock in competitive ones, and that might be enough to help with your goals.

Источник: https://www.nerdwallet.com/article/banking/historical-cd-rates

We’re lowering the variable home loan rate for new owner occupiers

UBank is today lowering its variable home loan rate for new Owner Occupier customers paying Principal and Interest by 0.15 per cent per annum. 


Effective, Wednesday 6 October for new applications or those in the process of applying:

  • UHomeLoan variable rate for Owner Occupiers (P&I) up to 80% LVR will decrease by 0.15% p.a. to 2.19% p.a. (comparison rate 2.19% p.a.*)
  • UHomeLoan variable rate for Owner Occupiers (P&I) up to 85% LVR will decrease by 0.15% p.a. to 2.34% p.a. (comparison rate 2.34% p.a.*) with no requirement for Lender’s Mortgage Insurance.


In August this year, UBank also lowered its variable interest rate for new investors paying principal and interest by 0.19 per cent per annum (LVR up to 80%).

Who will get the new rates?

These changes will apply to new owner occupier P&I customers who are applying for a variable home loan, or switching to one, on or after Wednesday 6 October, 2021. This includes applicants who settle from this date onward.

 

About UBank

UBank was launched in 2008 as an Australian fintech providing simpler, better and smarter banking for its customers online and over the phone. In 2021, UBank announced it will join with neobank 86 400 to deliver smart, digital banking solutions that help more Australians take control of their money. UBank is a division of NAB and currently offers a range of products including competitive home loans, online savings and transaction accounts.

© National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.

*The comparison rate is based on a secured loan of $150,000 over a term of 25 years. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Terms and conditions, fees and charges, credit criteria apply to all UBank’s home loan products and are available on application.

Credit is provided by AFSH Nominees Pty Ltd Australian Credit Licence 391192. UBank is the mortgage manager for UHomeLoan products.

Источник: https://www.ubank.com.au/newsfeed/articles/2021/10/ubank-is-lowering-its-variable-home-loan-rate-for-new-owner-occupiers

UBank cuts its savings rate. Is it time to abandon savings accounts?

UBank cuts its savings rate. Is it time to abandon savings accounts?

Photo by Natalya Letunova on Unsplash

UBank has announced it will reduce the maximum interest rate on its popular USave account by 15 basis points on Friday.

The NAB-owned digital bank will lower the base variable interest rate on the account from 0.40% p.a. to 0.25% p.a., taking the maximum interest rate down to 1.31% p.a.

According to UBank, the conditions to earn the bonus interest of 1.06% p.a remains unchanged, requiring customers to:

  • Open a USave savings account;
  • Link a USpend transaction account; and
  • Deposit at least $200/mth from a non-UBank account

Need somewhere to store cash and earn interest? The table below features savings accounts with some of the highest interest rates on the market.

Virgin Money

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1.50%

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0.10%

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The cut coincided with UBank's decision to also pass on the 15 basis point cut to variable home loan customers, something few lenders opted to do. 

"Recently, the RBA cash rate has been cut by 0.15% to 0.10% and the rates that UBank receives for deposits have also continued to decline due to market movements," UBank said.

"We’ve adjusted our rates accordingly while still ensuring they are competitive for customers."

The USave's interest rate was last cut back in October, when its maximum rate was reduced from 1.60% p.a to 1.46% p.a following the RBA's 25 basis point cut that month.

UBank isn't the only bank cutting savings account rates - yesterday, ING said it would be cutting the maximum rate on its Savings Maximiser Account by 15 basis points to 1.35% p.a.

And prior to the RBA's rate cut decision, each of the big four banks had also cut savings account interest rates, as did popular neobanks like Xinja, Up and 86 400. 

Savings accounts now little more than 'parking accounts'

With yet another cash rate cut and a slew of savings rate cuts occurring, Aussies are hard-pressed to find a decent rate of interest with cash at the moment. 

It's not just savings accounts either.

Savings.com.au's analysis of big four bank data last week found roughly half of deposits (including term deposits) with the big banks are earning below 0.25% p.a in interest.

Over one fifth (22%) of NAB's deposits earn less than 0.01% p.a - basically nothing.

NABdpst1

Source: NAB

The Reserve Bank has hinted multiple times that the cash rate may stay unchanged for the next three years, meaning deposit rates are set to stay at these ultra-low levels for the foreseeable future as well. 

Raiz Founder and CEO George Lucas said rates are so low that savers may struggle to beat inflation. 

"To put it simply, inflation may be low, but interest rates are in many cases even lower," Mr Lucas said. 

“This has led commentators to label savings accounts as ‘parking accounts’, where savers may be going backwards as they’re not being compensated for the decrease in purchasing power of their savings, due to inflation.”

According to Raiz, as many as 85% of Australians aren't even aware of the interest rate they're earning on their bank savings account, mainly due to how they're advertised. 

Many customers take out savings accounts with an 'introductory rate' that is higher for a few months, before reverting to a much lower rate at the conclusion of the introductory period. 

“This is why a micro-investing app like Raiz may be a good alternative for Aussies to get automated saving features and the potential of higher returns than bank interest,” Mr Lucas said. 

Should you consider micro-investing or ETFs? 

Acknowledging that savers have it tough at the moment, Reserve Bank Governor Philip Lowe said those hardest-hit needed to carry a "heavy share of the burden for the collective good". 

"In reaching today's decision, the Board also considered the effects on medium-term financial and macro stability as well as the impact on savers," Mr Lowe said. 

"The Board recognises that low rates can encourage some additional risk-taking, as investors search for yield. It also recognises that low deposit rates can create difficulties for some people.

“Lower rates will help support spending and ultimately will create jobs, so the broader community will benefit from today’s decision."

But there are other options out there for people who want to earn a return on their money, albeit ones that carry a significantly higher risk factor. 

One such option is micro-investing apps such as Raiz, which allows users to automatically invest their spare change in a selected mix of exchange-traded funds (ETFs), choosing from six different diversified portfolios with varying risk portfolios:

  • Conservative;
  • Moderately Conservative;
  • Moderate;
  • Moderately Aggressive;
  • Aggressive; and
  • Emerald, an ethical portfolio 

raiz-myfinance

Source: Raiz 

“It (Raiz) provides people access to a range of investment portfolios designed to suit differing investors and their goals," Mr Lucas said. 

"For example, the conservative portfolio may suit an investor who is not willing to accept a high risk of losing money, but still wants the potential to make higher returns than the interest rates at a bank.”

Such a conservative portfolio could perhaps suit older investors who might prefer cash for their retirement savings but are willing to consider an investment with a lower level of risk. 

As it stands, in a tough year for share trading, Raiz's conservative portfolio returned 1.41% p.a, above the Chant West benchmark of 1.00% p.a, while the ethical portfolio massively outperformed the benchmark at 4.33% p.a to -0.50% p.a 

Over two-years, the annualised investment performance of Raiz's portfolios has greatly outperformed what you can now get on a savings account or term deposit. 

Raizperf

Source: Raiz. Past performance is not a guarantee of future performance. 

"The rate of return varies, so future returns may differ from past ones, and they could even be negative. That’s why it always pays for Aussies to consider their investment goals and circumstances before investing," Mr Lucas said. 

"But taking more active control of their finances will ensure more people are proactive in doing what is best for them, and not the institutions who hold their cash.”

Other investment options for people looking for an alternative to low-rate savings accounts include the likes of ETFs and managed funds (compared here) or lower-risk fixed-income options like bonds. 

It is worth remembering when comparing term deposits and savings accounts with investments like ETFs, managed funds or micro-investing apps that it is not an apples to apples comparison, as they are quite different. 

Savings accounts at the moment are unlikely to compete with the average returns generated by many ETFs and managed funds, but offer both security and some useful features, depending on the bank. 

Savings accounts and term deposits are covered by the Australian Government’s Financial Claims Scheme (FCS), which provides a government guarantee for amounts held up to $250,000.

Investments don't provide this safety net, and also have the potential to generate losses, which cash does not. 

But investments do offer a greater degree of freedom and flexibility, and the possibility for much higher returns in exchange for elevated risk. 


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William Jolly William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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Источник: https://www.savings.com.au/savings-accounts/ubank-cuts-its-savings-rate-is-it-time-to-abandon-savings-accounts

Internet Banks: Pros and Cons

Figuring out where to bank starts with a decision about the type of institution you want. Do you prefer a bank with brick-and-mortar branches and its own automated teller machines (ATMs) or an online-only alternative that gives you a purely online or mobile banking experience?

Traditional and online banks—also known as direct banks—both offer you access to your account online, and the ability to transfer money or perform other tasks with a few clicks of your cursor or taps on your phone screen. They're both subject to the same laws and regulations—online-only accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) just like the accounts held at traditional banks. Security is the same overall, with both types employing such measures as encryption to protect your funds and identity.

But even if both types have become close cousins in some ways, important distinctions remain. Direct banks leverage their lower costs to offer better interest rates and, often, lower fees. Brick-and-mortar institutions offer a convenient array of options for deposits and other transactions including offering the option for face-to-face service at a bank branch when you need it. If you're on the fence about internet banks, this article may help you. It outlines the main pros and cons of this part of the banking industry.

Key Takeaways

  • Before choosing an online bank, it's important to decide what features are most important to you.
  • The lack of overhead gives internet banks advantages over traditional banks, including fewer or lower fees and accounts with higher APYs.
  • Internet banks lack personal relationships, no proprietary ATMs, and more limited services.

Online Banking: A Quick History

As the commercialization of the internet evolved in the early 1990s, traditional brick-and-mortar banks began looking for ways to deliver online services to their customers. Though limited at first, the success of these early efforts led many banks to expand their internet presence through improved websites featuring the ability to open new accounts, download forms, and process loan applications.

This led to the birth and rise of internet-only banks. These institutions offer online banking and other financial services without a network of branch offices. The first fully-functional direct bank insured by the FDIC was the Security First Network Bank, which began operations on Oct. 18, 1995. Security First and those that followed were able to offer higher interest rates on deposit accounts and reduced service fees all because of the lower costs due to a lack of overhead.

As the choice in virtual banks grew, so did customers' enthusiasm for banking online. More than 60% of account holders do at least some of their banking on the internet, according to the latest report on banking behavior from the FDIC.

Pros of Internet Banks

Despite the rising virtual presence of traditional banks, online-only competitors still offer some clear advantages for consumers.

Better Rates, Lower Fees

The lack of significant infrastructure and overhead costs allow direct banks to pay higher interest rates or annual percentage yields (APYs) on savings. The most generous of them offer as much as 1% to 2% more than you'll earn on accounts at a traditional bank—a gap that can really add up with a high balance. While some direct banks with especially generous APYs offer only savings accounts, most of them offer other options including high-yield savings accounts, certificates of deposit (CDs), and no-penalty CDs for early withdrawal.

You're less likely to be dinged with a wide range of fees at a direct bank including those associated with keeping an account open with a low balance, making direct deposits, or paying by check or debit card. Accounts at direct banks are more likely to carry no minimum balance or service fees.

Better Online Experiences

Traditional banks are investing heavily in improving their virtual presence and service, including launching apps and upgrading websites. But overall, direct banks appear to retain an edge when it comes to the online banking experience.

A 2018 Bain and Company survey of retail banking customers found traditional banks lagged behind direct banks in the areas that mattered most to customers, including the quality of the banking experience and the speed and simplicity of transactions.

1% to 2%

The gap between the interest rates earned by accounts in traditional banks and internet-only banks.

Cons of Internet Banks

Banking with an online institution also has its share of drawbacks and inconveniences.

No Personal Relationships

A traditional bank provides the opportunity to get to know the staff at your local branch. That can be an advantage if and when you need additional financial services, such as a loan, or when you have to make changes to your banking arrangements. A bank manager usually has some discretion in changing the terms of your account if your personal circumstances change, or in reversing a mandatory fee or service charge.

Less Flexibility With Transactions

In-person contact with a banking staffer isn't only about getting to know you and your finances. For some transactions and problems, it's invaluable to head to a bank branch.

Take, for example, depositing funds—the most basic of banking transactions. Depositing a check is possible with a direct bank by using its banking app to capture both the front and back of the check. However, depositing cash is downright cumbersome at many online banks. So, it's worth checking the bank’s policy if this is something you plan to do frequently. International transactions may also be more difficult, or even impossible, with some direct banks.

The Absence of Their Own ATMs

Since they lack their own banking machines, online banks rely on having customers use one or more ATM networks such as those from AllPoint and Cirrus. While these systems offer access to tens of thousands of machines across the country—even around the world—it's worth checking the available machines near where you live and work.

Check, too, for any fees you may rack up for ATM use. While many direct banks offer free access to network ATMs or will refund any monthly charges you incur, there are sometimes limits on the number of free ATM transactions you can make in a given month.

More Limited Services

Some direct banks may not offer all the comprehensive financial services that traditional banks offer, such as insurance and brokerage accounts. Traditional banks sometimes offer special services to loyal customers, such as preferred rates and investment advice at no extra charge.

In addition, routine services such as notarization and bank signature guarantee are not available online. These services are required for many financial and legal transactions.

The Bottom Line

Traditional and online-only banks both have their advantages. Basically, you have to decide whether a brick-and-mortar institution's services and personal touch outweigh the often higher costs, in terms of lower interest rates and more numerous fees, of banking there.

It's also worth considering dividing your business between one of each. True, this arrangement may not be practical for you, and the fees for holding multiple accounts may be an issue. But having accounts at both a traditional bank and an online bank can facilitate the best of both worlds—higher interest rates, along with access to in-person help with transactions and problems when you need it.

Источник: https://www.investopedia.com/articles/pf/11/benefits-and-drawbacks-of-internet-banks.asp

Everyday Offset 

** This is how much people saved on average when they had money in their offset account between July 2018 and June 2019. By way of example, you would need to have $30,000 in an offset account with a home loan interest rate of 4% p.a. for the full year to save $1,200 interest on your home loan.

The target market for this product will be found within the product’s Target Market Determination, available here.

Mastercard is a registered trademark of Mastercard International Incorporated.

As this advice has been prepared without considering your objectives, financial situation or needs, you should before acting on this advice, consider its appropriateness to your circumstances. Please view our Financial Services Guide (PDF). Full terms and conditions for transaction and savings accounts (PDF) mentioned are available here or from any branch of the Commonwealth Bank. If you have a complaint in respect of this product, the Commonwealth Bank’s dispute resolution service can be accessed on 13 2221.

Источник: https://www.commbank.com.au/home-loans/interest-offset.html
Buildings are reflected in a window at a National Australia Bank branch in Sydney, Australia, Tuesday, Feb. 8, 2011. National Australia Bank, one of the country's largest lenders, reported an 18 percent rise in first quarter cash profit, citing a boost in business lending and fewer bad debts. (AP Photo/Rick Rycroft)

NAB has been cleared to acquire neobank 86 400, raising questions about the interest rate 86 400 customers will receive.

The deal is due to be finalised by the middle of the year, however the two banks remain tight-lipped on whether 86 400 customers will retain their interest rates, or receive NAB or UBank interest rates.

According to Canstar, if 86 400 customers were to receive UBank or NAB interest rates, they would either end up paying more or less depending on the accounts they held.

Home loan customers

86 400 home loan customers with a three year fixed rate would save $35 a month by moving to NAB’s lower interest rate, or $80 by moving to UBank’s 1.75 per cent interest rate.

UBank has one of the lowest three year fixed rates on the market.

That’s based on owner occupier loans worth $400,000 with a 80 per cent loan-to-value ratio, and a 30-year term.

Similarly, home loan customers with 86 400’s one or five year fixed would save on interest by moving to NAB or UBank’s rates.

However, 86 400 customers on their 2.34 per cent variable rate would pay an extra $73 a month if they received NAB’s 2.69 per cent rate, or an extra $26,233 over the life of their loan. 

Image: Canstar.

Savings account customers

For 86 400 savings customers, the story is a bit different.

86 400 has a base rate of 0.10 per cent and bonus rate of 1.10 per cent, taking it to 1.20 per cent provided customers deposit at least $1,000 into an account each month.

Over the course of the first year, that means someone with a $10,000 deposit meeting the conditions would earn $186.88 in interest.

Someone with the same deposit amount would earn a smaller $171.24 at UBank, or $46.56 at NAB.

Image: Canstar.

Interest rates in Australia are currently at record lows after the Reserve Bank of Australia (RBA) cut rates to 0.10 per cent in March 2020 to curb the effects of the COVID-19 downturn.

The RBA is expected to keep the interest rate on hold when it meets on Tuesday 6 April, however banks are now beginning to move rates.

CommBank broke ranks recently to increase its four year fixed rate, with Bendigo Bank and Aussie Home Loans also now having increased their four year fixed rates.

Image: Yahoo Finance
Источник: https://au.finance.yahoo.com/news/nab-to-buy-86-400-interest-rates-013030455.html

Super-low fixed rate mortgage party looks over

Any doubts that the best is over for fixed-interest rate mortgages were quashed last week when the Ubank savings interest rate cut Bank increased its longer-term fixed rates – a move quickly matched by Westpac.

CBA did cut the interest rate on its lowest variable-rate mortgages gm costco cash card 0.4 percentage points – to 2.29 per cent – but only for new customers with a deposit of at least 30 per cent. It also cut its 1-year fixed rate.

The moves signal that Australia’s biggest banks are expecting a rise in their funding costs within the next two years, despite the Reserve Bank of Australia (RBA) repeatedly saying that it does not expect to start increasing the cash rate until 2024, at the earliest.

“These fixed-rate hikes suggest the days of ultra-cheap funding could be numbered,” says Sally Tindall, research director at RateCity.

“While the RBA is insistent the next rate hike won’t be until at least 2024, the banks are anticipating an increase to the cost of funding once borders reopen and the economy rebounds,” she says.

There has been a big lift in inflationary expectations, with consumers forecast to demand higher wages and businesses increase the prices of their products and services.

With the latest lockdown in NSW now ended and the resumption of international travel to begin November 1, spending in cafés, restaurants, retail outlets and airlines is set to surge.

With Victoria not likely far behind NSW in opening up, the banks are likely going to need to pay higher interest rates to attract savings.

Most rate cuts from lenders in recent months have been to their variable interest rates and one-year fixed terms, with higher rates on southwest capital bank online 2, 3, 4 and 5-years mortgages.

Competing on variable-rate mortgages makes sense for lenders, as they can always increase their rates later – something they cannot do for fixed-rate customers.

The best variable mortgages rates are being offered to new customers and to borrowers that lenders assess as having a low risk of defaulting. They include people looking to refinance who have substantial equity in their homes.

RateCity figures show there are still some attractive fixed-interest deals on offer, particularly for borrowers with a good deal of equity in their homes who have well-established repayment records.

However, fixed-rate mortgages have a downside. Many do not have attached mortgage offset accounts, where significant savings can be made.

Money held in an offset accounts owen wilson night at the museum the overall debt and the interest paid.

Lowest mortgage rates

  • 1-year fixed: UBank, 1.79 per cent
  • 2-year fixed: St George Bank/ Bank of Melbourne, 1.79 per cent
  • 3-year fixed: Community First Credit Union, 1.79 per cent
  • 4-year fixed: Freedom Lend, 2.27 per cent
  • 5-year fixed: Freedom Lend, 2.27 per cent
  • Variable: Reduce Home Loans, 1.77 per cent

SOURCE: RateCity 18/10/21. Rates available for owner-occupiers paying principal and interest. Some LVR requirements apply

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

From our partners

Источник: https://www.smh.com.au/money/borrowing/super-low-fixed-rate-mortgage-party-looks-over-20211015-p590do.html

Challenger banks mimic big four with 15 basis point cuts

Stockbroking analysts say each 25 basis point reduction shaves about 5 per cent off bank profits, but if anything the equation could be worse for smaller banks, which face higher funding charges.

Jessica Power, HSBC’s head of retail banking and wealth management, said: ‘‘In making this decision, we carefully considered the needs of both our home loans and savings customers.’’

Her remarks closely resemble the delicate balance thesis put forward by the big banks this week – and backed by large investors – in response to the RBA rate cut.

Analysts have singled out Macquarie, HSBC and ING as the primary beneficiaries of shifting dynamics in the home loan market. According to UBS, Commonwealth Bank was the only big bank to increase its mortgage book in August, while the three second-tier banks reported mortgage book growth of 3.5 per cent, 1.5 per cent and 1.1 per cent respectively.

Bendigo and Adelaide Bank also cut its rates by 15 basis points, after shedding 20 basis points in June and July. It also lowered rates on its variable business loans by 0.20 per cent.

‘‘These rate changes carefully consider the diverse interests of all stakeholders, the performance of our business, our market competitiveness and our deep connection with, and responsibility to, communities right across our national network,’’ said Bendigo Bank managing director Marnie Baker.

Bank of Queensland is cutting standard and variable principal and interest rates by just 10 basis points, with a 25 basis point cut for owner-occupier and investor interest-only loans.

According to data from comparison site Mozo, just four companies passed on the recommended 25 basis point cut in full: fintech lenders Homestar, Freedom Lend, Athena and NAB-owned Ubank.

Compressed profit margins owing to funding cost pressures in a low rate environment are widely cited as a factor in the banks not honouring the federal government or central bank’s wishes by passing on the cut in full.

The advantage of no deposits

However, JP Morgan analyst Andrew Triggs said that because many of these online lenders were not authorised deposit-taking institutions (ADIs), they were not subject to the same profit constraints or reliance on deposits as a cheap source of funding.

"Non-banks, who are not able to take deposits, do not face [this] issue of margin impact from the inability to reprice certain deposits lower," Mr Triggs ubank savings interest rate cut should not be a surprise, therefore, that some of the non-banks that we track [for example, Athena] have passed on the rate cut in full.

"We also believe that new entrants such as Athena are likely to prioritise ubank savings interest rate cut growth over margins at this point. If the cash rate falls further, as the market is pricing, we expect this will help to reinforce market share loss by the major banks over the coming years."

Brett Le Mesurier of Shaw & Partners agreed that some of the second-tier banks, particularly Macquarie, HSBC and ING, had been successful in grabbing some market share, but said banks outside the big four were facing the same profit pressures.

“The gain in market share is not as significant as the potential damage to profit from having reducing margins, which may have happened if they passed on more," he said.

Triggs said that because many of these online lenders were not authorised deposit-taking institutions (ADIs), they were not subject to the same profit constraints or reliance on deposits as a cheap source of funding.

‘‘Non-banks, which are not able to take deposits, do not face [this] issue of margin impact from the inability to reprice certain deposits lower," he said.

‘‘It should not be a surprise, therefore, that some of the non-banks that we track [for example, Athena] have passed on the rate cut in full.

‘‘We also believe that new entrants such as Athena are likely to prioritise loan growth over margins at this point. If the cash rate falls further, as the market is pricing, we expect this will help to reinforce market share loss by the major banks over the coming years.’’

Источник: https://www.afr.com/companies/financial-services/challenger-banks-mimic-big-four-with-15-basis-point-cuts-20191004-p52xqd

ACCC wants to protect neobanks — and their customers — from big four bank takeovers

Australia's competition watchdog has put the country's big banks on notice, warning it is keeping a very close eye on their efforts to buy up emerging fintechs and digital banks.

Key points:

  • The ACCC is investigating whether to allow NAB's takeover of neobank 86 400
  • Rival neobank Xinja closed down last year and returned customers' deposits
  • Fintech researcher Cynthia Cai says neobanks need to offer more than just high interest rates on savings

"I think there's a tremendous parallel with what Google and Facebook have done," Australian Competition and Consumer Commission (ACCC) chair Rod Sims said, referencing the concerns about the market dominance of the major tech companies, which bought up smaller rivals.

"It does have lessons for the banking sector and we're acutely aware of those and watching them very carefully," he told The Business.

The ACCC is currently investigating NAB's proposal to take over 86 400, a digital-only bank, or "neobank", in a $220 million deal that would see it merge with its online bank, UBank.

Mr Sims said it was "early days" and he did not want to pre-empt a decision on the ubank savings interest rate cut, which is due in April.

However, he does consider it a test case of sorts for major banks attempting to swallow up their smaller competitors.

"Clearly it's a concern when an established, fairly dominant player purchases one of the emerging neobanks, fintechs," he said.

"It ubank savings interest rate cut have implications for competition, innovation and consumers if the big four start buying all the neobanks."

He drew comparisons to the foreign currency exchange market, where new players have challenged the major banks by offering lower conversion fees.

"If the big four banks buy them, of course they won't want that player to undercut them, so that will be bad for consumers."

86 400 chief executive Robert Bell argued the transaction would strengthen competition, by bringing his bank's tech-focused offering to more customers.

"We are confident this doesn't change the competitive landscape," he said.

"It'll actually force the other major banks to respond in terms of their digital offering."

A light blue bank card with the brand 86 400 in top right corner.

Customers go where interest rates blow

The neobank sector has had a slow start in Australia, compared to other markets including the UK.

After delays, the open banking regime, which allows consumers to access their bank data to make switching institutions easier, was phased in from mid-last year.

From late 2019, Australian neobanks began to roll out savings accounts, offering higher interest rates than the majors in an effort to lure customers.

Engineering graduate Callum Kraal was one of those swayed by the offers.

He opened a savings account with Xinja, which had been awarded an unrestricted banking licence.

A man in a grey t-shirt looks at a small pile of coins in front of him on a table.

However, as the pandemic hit and the Reserve Bank slashed the cash rate, Xinja cut the rate on its savings account three times in six months.

Despite his fondness for the bank's app and its animation and game-like qualities, Mr Kraal shut his Xinja account.

"When they were just starting to drop the interest rate down, another bank just popped up … I think it's all about marketing," he said.

Fintech researcher Cynthia Cai agrees that while savings rate offers are useful for luring customers, there needs to be something more to retain them.

A woman seated at a desk, with a Bloomberg terminal behind her

"You will really have to stand out and find a new feature on top of the traditional services that you can offer," Dr Cai, a senior lecturer at Macquarie Business School, said.

"[Xinja] attracted a lot of customers but they couldn't find a way to generate the sustainable revenue resources."

According to data from banking regulator APRA, Xinja had over $480 million in customer deposits at the end of September.

Less than two months later, that had almost halved to around $250 million.

In mid-December, Xinja announced it would quit the banking business, hand back its licence and return customers' money.

Despite the high-profile failure, ACCC chair Rod Sims says he is not concerned about the viability of neobanks in Australia.

"The possibilities of neobanks, fintechs generally, is just fantastic … but they don't all succeed," he said.

"That's the way with new and small business… so I think that's just what happens when you've got new players in new markets."

Big banks a capital source for challengers

Xinja had its own specific issues, with a promised cash injection from a Dubai investment firm that never materialised.

However, Dr Cai also noted its failure to establish a lending business to bring in revenue.

Rival neobank 86 400 has built a home loan book alongside its savings and transaction account offerings.

"Strategically, it was really important," the bank's chief executive Robert Bell said.

"That's banking 101, to make sure you have a balance between your savings accounts and your home lending, so that you can actually make use of the deposits you take on board."

Loan deferral shock

Around 80 per cent of customers who were on home loan deferrals have resumed repayments, but financial counsellors warn some banks are making unrealistic demands on many of these customers.

Read more

Growing a loan book, however, comes with increased capital requirements, and while 86 400 had another successful capital raising last year, it is now hoping for a takeover by one of Australia's biggest banks.

NAB has proposed a merger of 86 400 with UBank, utilising the neobank's technology platform.

"We think it's a really good outcome for our shareholders, we think it's great for our team to be able to take our platform and put more and more customers on it," Mr Bell said.

He said the current plan was to do away with the 86 400 brand name and operate under UBank, given its bigger customer base and recognition, but retain 86 400's fast approval times and app features.

The acquisition is subject to approvals, not just from the ACCC but also from shareholders, the Treasurer, and APRA.

Mr Sims said the ACCC would consider the ubank savings interest rate cut on its merits and the assessment would be "very intensive".

The investigation is gathering views on whether 86 400 "plays a critical role in the market" and "is uniquely placed to provide significant competition", as well as the likelihood of other, similar players emerging.

ACCC chairman Rod Sims sits at his desk with a pen marking up documents.

In the meantime, Mr Sims cautions other neobanks and fintechs to look elsewhere if they're after an easier approval process.

"I think if you're after quick capital, it'll be a faster process as far as the ACCC's concerned if you're going to a second tier bank, rather than a top tier bank," he said.

"Occasionally they will be bought by the big four, but it's something we're going to watch very carefully."

Источник: https://www.abc.net.au/news/2021-02-12/accc-wants-to-keep-big-four-from-swallowing-up-all-neobanks/13145256

We’re lowering the variable home loan rate for new owner occupiers

UBank is today lowering its variable home loan rate for new Owner Occupier customers paying Principal and Interest by 0.15 per cent per annum. 


Effective, Wednesday 6 October for new applications or those in the process of applying:

  • UHomeLoan variable rate for Owner Occupiers (P&I) up to 80% LVR will decrease by 0.15% p.a. to 2.19% p.a. (comparison rate 2.19% p.a.*)
  • UHomeLoan variable rate for Owner Occupiers (P&I) up to 85% LVR will decrease by 0.15% p.a. to 2.34% p.a. (comparison rate 2.34% p.a.*) with no requirement for Lender’s Mortgage Insurance.


In August this year, UBank also lowered its variable interest rate for new investors paying principal and interest by 0.19 per cent per annum (LVR up to 80%).

Who will get the new rates?

These changes will apply to new owner occupier P&I customers who are applying for a variable home loan, or switching to one, on or after Wednesday 6 October, 2021. This includes applicants who settle from this date onward.

 

About UBank

UBank was launched in 2008 as an Australian fintech providing simpler, better and smarter banking for its customers online and over the phone. In 2021, UBank announced it will join with neobank 86 400 to deliver smart, digital banking solutions that help more Australians take control of their money. UBank is a division of NAB and currently offers a range of products including competitive home loans, online savings and transaction accounts.

© National Australia Bank Limited ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.

*The comparison fifth third bank brunswick ohio hours is based on a secured loan of $150,000 over a term of 25 years. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

Terms and conditions, fees and charges, credit criteria apply to all UBank’s home loan products and are available on application.

Credit is provided by AFSH Nominees Pty Ltd Australian Credit Licence 391192. UBank is the mortgage manager for UHomeLoan products.

Источник: https://www.ubank.com.au/newsfeed/articles/2021/10/ubank-is-lowering-its-variable-home-loan-rate-for-new-owner-occupiers

Internet Banks: Pros and Cons

Figuring out where to bank starts with a decision about the type of institution you want. Do you prefer a bank with brick-and-mortar branches and its own automated teller machines (ATMs) or an online-only alternative that gives you a purely online or mobile banking experience?

Traditional and online banks—also known as direct banks—both offer you access to your account online, and the ability to transfer money or perform other tasks with a few clicks of your cursor or taps on your phone screen. They're both subject to the same laws and regulations—online-only accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) just like the accounts held at traditional banks. Security is the same overall, with both types employing such measures as encryption to protect your funds and identity.

But even if both types have become close cousins in some ways, important distinctions remain. Direct banks leverage their lower costs to offer better interest rates and, often, lower fees. Brick-and-mortar institutions offer a convenient array of options for deposits and other transactions including offering the option for face-to-face service at a bank branch when you need it. If you're on the fence about internet banks, this article may help you. It outlines the main pros and cons of this part of the banking industry.

Key Takeaways

  • Before choosing an online bank, it's important to decide what features are most important to you.
  • The lack of overhead gives internet banks advantages over traditional banks, including fewer or lower fees and accounts with higher APYs.
  • Internet banks lack personal relationships, no proprietary ATMs, and more limited services.

Online Banking: A Quick History

As the commercialization of the internet evolved in the early 1990s, traditional brick-and-mortar banks began looking for ways to deliver online services to their customers. Though limited at first, the success of these early efforts led many banks to expand their internet presence through improved websites featuring the ability to open new accounts, download forms, and process loan applications.

This led to the birth and rise of internet-only banks. These institutions offer online banking and other financial services without a network of branch offices. The first fully-functional direct bank insured by the FDIC was the Security First Network Bank, which began operations on Oct. 18, 1995. Security First and those that followed were able to offer higher interest rates on deposit accounts and reduced ubank savings interest rate cut fees all because of the lower costs due to a lack of overhead.

As the choice in virtual banks grew, so did customers' enthusiasm for banking online. More than 60% of account holders do at least some of their banking on the internet, according to the latest report on banking behavior from the FDIC.

Pros of Internet Banks

Despite the rising virtual presence of traditional banks, online-only competitors still offer some clear advantages for consumers.

Better Rates, Lower Fees

The lack of significant infrastructure and overhead costs allow direct banks to pay higher interest rates or annual percentage yields (APYs) on savings. The most generous of them offer as much as 1% to 2% more than you'll earn on accounts at a traditional bank—a gap that can really add up with a high balance. While some direct banks with especially generous APYs offer only savings accounts, most of them offer other options including high-yield savings accounts, certificates of deposit (CDs), and no-penalty CDs for early withdrawal.

You're less likely to be dinged with a wide range of fees at a direct bank including those associated with keeping an account open with a low balance, making direct deposits, or paying by check or debit card. Accounts at direct banks are more likely to carry no minimum balance or service fees.

Better Online Experiences

Traditional banks are investing heavily in improving their virtual presence and service, including launching apps and upgrading websites. But overall, direct banks appear to retain an edge when it comes to the online banking experience.

A 2018 Bain and Company survey of retail banking customers found traditional banks lagged behind direct banks in the areas that mattered most to customers, including the quality of the banking experience and the speed and simplicity of transactions.

1% to 2%

The gap between the interest rates earned by accounts in traditional banks and internet-only banks.

Cons of Internet Banks

Banking with an online institution also has its share of drawbacks and inconveniences.

No Personal Relationships

A traditional bank provides the opportunity to get to know the staff at your local branch. That can be an advantage if and when you need additional financial services, such as a loan, or when you have to make changes to your banking arrangements. A bank manager usually has some discretion in changing the terms of your account if your personal circumstances change, or in reversing a mandatory fee or service charge.

Less Flexibility With Transactions

In-person contact with a banking staffer isn't only about getting to know you and your finances. For some transactions and problems, it's invaluable to head to a bank branch.

Take, for example, depositing funds—the most basic of banking transactions. Depositing a check is possible with a direct bank by using its banking app to capture both the front and back of the check. However, depositing cash is downright cumbersome at many online banks. So, it's worth checking the bank’s policy if this is something you plan to do frequently. International transactions may also be more difficult, or even impossible, with some direct banks.

The Absence of Their Own ATMs

Since they lack their own banking machines, ubank savings interest rate cut banks rely on having customers use one or more ATM networks such as those from AllPoint and Cirrus. While these systems offer access to tens of thousands of machines across the country—even around the world—it's worth checking the available machines near where you live and work.

Check, too, for any fees you may rack up for ATM use. While many direct banks offer free access to network ATMs or will refund any monthly charges you incur, there are sometimes limits on the number of free ATM transactions you can make in a given month.

More Limited Services

Some direct banks may not offer all the comprehensive financial services that traditional banks offer, such as insurance and brokerage accounts. Traditional banks sometimes offer special services to loyal customers, such as preferred rates and investment advice at no extra charge.

In addition, routine services such as notarization and bank signature guarantee are not available online. These services are required for many financial and legal transactions.

The Bottom Line

Traditional and online-only banks both have their advantages. Basically, you have to decide whether a brick-and-mortar institution's services and personal touch outweigh the often higher costs, in terms of lower interest rates and more numerous fees, of banking there.

It's also worth considering dividing your business between one of each. True, this arrangement may not be practical for you, and the fees for holding multiple accounts may be an issue. But having accounts at both a traditional bank and an online bank can facilitate the best of both worlds—higher interest rates, along with access to in-person help with transactions and problems when you need it.

Источник: https://www.investopedia.com/articles/pf/11/benefits-and-drawbacks-of-internet-banks.asp

5 Replies to “Ubank savings interest rate cut”

  1. noooo, dont hide your credit card information with your finger, ur so sexy ahahah

  2. The type of people who are not going to want to put their kids into a state-run childcare facility. I don’t know why they were selected as an example for regular people.

  3. @Kevin Conway thank you so much for the advice ! I've been wanting to switch for for a while now .but I've been hesitant because didnt know what bank to switch to but since I came across your video i thought about switching there but then i read some of the comments about the money not being secure for bit . so then i paused and thought i might ask you can i I really trust that my money will be deposited.. have you had any issues with your money being taken?

  4. Mam mujhe job ki bhut hi jada jrurt h me 12th pas hu but 2 sall gafe h to mere liye koyi b job ho to pls mam reply me chattisgarh se hu

  5. Yar Kya Sadi huyi app hai....me Shimla me hun or bank sirmour me....ab user id lene vha Jana pdega had hai.......

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