Up Bank: a long-term review of an Aussie neo-bank

Updated October 2023

Banks in Australia are all pretty good, and their features are all ahead of most other countries, but a few years ago it dawned on me that I’ve been growing increasingly dissatisfied with the Commonwealth Bank, who I’ve been using since I moved here.

The Commonwealth Bank of Australia, or Commbank as it’s thankfully abbreviated to, has a pointless and irritating runaround for their savings accounts which when I updated this in October 2023, could increase your interest rates from 2.2% to a little bit more for a few months. I thought this didn’t really communicate that they loved their customers very much.

Commbank also had some astonishingly immoral and bordering-on-illegal marketing of their Travel Money Card, which at the time claimed it had “no fees” to spend money abroad, while neglecting to tell you that the rates it used were around 4% higher than the normal card rate. After dimly realising this after a year, I calculated how much I’d lost — about $120 — and asked them for the money back. To their credit (and possibly assuaging their guilt), they paid up. They now openly say it’s 4% above the Visa rate.*

So, I thought: screw Commbank. I wonder if there’s a better option out there.

Back in mid-2019, I tried three new Australian neo-banks: Xinja, Volt and Up. All three let me open an account in about three minutes.

Up was quickest and cleanest: by the end of my three minutes on my phone, I had a new account, and an automatic Google Pay ‘card’ on my phone so I could use it immediately. A brightly-coloured plastic card came through the post within a week.

Xinja sent their plastic card through the post, and then I could sign-up with Google Pay, which seemed the wrong way round.

Volt, when I signed up, didn’t have a card: and were just about to launch their savings account.

Xinja offered the highest interest rate for savings. Their actual banking service wasn’t much good though: it took some time for money to transfer, since they didn’t have instant payments. Their card was the only one without ‘eftpos’, a relatively ubiquitous payment system used in Australia. Their marketing was a bit too-cool-for-school for me; their app a bit childish and not that well thought-out; and I used them for savings for a while. They closed their savings account for new customers, raised some more money from the Middle East, and made me a little concerned for the bank’s future; so I closed the account. Just as well, it turned out; it closed in December 2020.

Volt never offered a card, so I couldn’t do my banking with them. I could have used them for a savings account, but their rate turned out to be lower than Xinja’s, so I didn’t bother with them in the end.

And Up? I liked them so much, I no longer have a personal bank account with Commbank. Below, here’s a little on why I went with Up.

(And none of the below has anything to do with this signup link which will give us both $5 if you sign up. Don’t use it if you don’t want. But it’s there, so I might as well.)

CAUTION: This isn’t a review that tells you the features of the product

Chances are, you’re reading this because you already know about the product and you want to know what it’s actually like. This isn’t going to be a pointless re-hash of their website, which most lazy reviewers think is what people want. I really hate that. If you want that, you’re in the wrong place.

First, Up isn’t a neo-bank. When I joined, it was an independent company called Ferocia, using the traditional banking infrastructure, and licence, of Bendigo and Adelaide Bank. As of August 2021, the Bendigo and Adelaide liked them so much, they bought the company. All that gave them a few advantages over the new entrants, since they had some of the boring bank stuff sorted.

Like Volt and Xinja, and any fully-licensed bank, the first $250,000 of your money is guaranteed by the Australian government.

In many respects (and this will be a very niche comment that only Brits will get) Up is quite similar to firstdirect, the UK bank. Firstdirect used HSBC for their infrastructure, but they built everything new on top of that. (Until, that is, HSBC decided to make them a bit more rubbish and stop them from doing all that stuff, after which firstdirect made a slow decline to just being another branch of HSBC. But I digress.)

Up’s infrastructure for consumers is anything but traditional, though. They don’t have a banking website — it’s all done through the mobile phone apps (rather better for security, you’d assume). There’s one bank account number, but you can have a seemingly unlimited amount of savings accounts plus your main transaction account. And it sounds as if all of Up’s infrastructure is in the Google Cloud somewhere, rather than a traditional bank’s collection of 1970’s mainframe computers all running Unix, and code that was written by Bob who’s now in his nineties and the only bloke who knows how it works. (Up also post multiple releases a day, and as an inveterate “check for upgrades” button pusher on my phone, I like that.)

In no particular order, things I like about Up are:

1. Actually instant payments to other banks. (Let’s compare this with Commbank: if you use their mobile app, and the bank you’re sending to supports it, and you’ve made the payment before, it’ll go instantly through a thing called Osko; but if you use Commbank’s website to make the same payment to the same account details, it takes upwards of six hours and sometimes takes two days, because Commbank hate you).
   As an addendum to the above: Commbank will always make you wait 24 hours for the first Osko/PayID payment you make to someone, because either Commbank have some spurious security reason for this, or they deliberately want to dissuade you from using instant payments because they hold on to your money for less time. Or they hate you. Up Bank? Most small payments are really instant; when sending larger ones for the first time, they make you wait two hours, and send you an alert and an email, just in case it was your four year-old messing about on your phone. That’s very clever.
2. A decent savings rate. At the time of writing, it’s 4.35% which is more than you’ll get in most other banks without a lot of fiddling about. The only catch is that Up Bank would like you to use your card (or pay by phone) 5 times a month for this rate; otherwise you don’t get any interest at all. (Commbank? 2.2% on everything, unless you mess about and get a bit more for a random amount of time, because they don’t really care, and/or hate you.)
3. No fees for spending overseas. I mean, there are no fees with Up at all, but they don’t charge fees for any overseas payment either. (Commbank charges 3% for all overseas card payments, because that’s the standard thing to do). Up also don’t charge for overseas cash withdrawals. (Commbank charges $5 plus 3% for virtually all overseas withdrawals, because they’re jealous of you being able to go overseas, and therefore they hate you. They also charge $4 a month to have a transaction account in the first place, but waive that if you put $2,000 into it every month). It’s also of use if you buy things overseas, like anything online from the US at all.
4. The app is built for humans. The main transaction screen doesn’t tell you you’ve made a payment with NLD INVST TRUST PTY, which is what the credit card machine tells the bank: instead, it tells you that you’ve made it at The Friendly Coffee Shop, adds a logo for it, and a link to their website. It correctly marks it as a coffee shop, tells you how many times you’ve been there, how much you’ve spent there in total, and on average. It does this for the big supermarket down the road, sure, but it also does it for the little family-run coffee shop at the bottom of the street. There’s almost a fun game of being the first “Upsider” to a new place: then it makes a guess at the name of the business, and you can help the team by giving them a URL for a website to grab a logo. (Commbank? Yeah, nah. NLD INVST TRUST PTYwhether you like it or not. And whatever category they set up their machine as, because they hate you.)
5. They don’t invest in fossil fuel projects. At all. Any bank that does is, in my mind, communicating that they hate you and the planet, which, er, ah, Commonwealth Bank loaned $14.2 billion during 2016–2020, making them the biggest bank for loans to fossil fuel companies. Bravo.
6. They have a responsible attitude towards saving money. They have a thing called “May Buy”, which is a savings tool to help you afford that thing you wanted to buy with the money you actually have. Commonwealth Bank, it may not surprise you to know, has a thing called Step Pay, which lets you spend money you don’t have, then automatically takes four payments every two weeks until a) you’ve paid for it, or b) you’ve not got enough money in your account for that payment (probably likely if you need these services), and then they charge you a fee. This is because they want you to spend money you don’t have and earn money from it.
7. The app has a ‘round-up’ thing. Spend $7.95 on lunch somewhere? You can set the app to ‘round-up’ that payment to $8, or even $9 if you want, and put the extra in your savings account automatically. Drag down the main transactions screen, and the annoying .34 cents that you have cluttering up your main balance goes, with a little animation, into your savings account. It’s a clever way to save a little more and to stop you spending as much. It also gives you savings “challenges”, if you want one, to get you in the habit of saving regularly.
8. The app has an ‘upcoming’ view. It’s quite clever at spotting recurring payments, and warns you when they’re about to happen. Occasionally, it even spots when payments are going to be recurring (that Netflix charge is unlikely to be a one-off after all). The last time I signed-up with a Netflix-like service, Up spotted that they’d checked that my card was valid, and then asked me which subscription plan I’d signed up to.
9. The app does clever things with pay days. Because the app knows when my pay has come in, I can split it automatically into savings and spending money; and because the app also knows what I have coming up, it can show a “available to spend” balance, bearing in mind the other payments I have waiting. That’s rather good.
10. They’re quite satisfyingly techie: they’re open with their roadmap, they have a read-API (which they announced in binary in their newsletter), and their customer service is like instant-messenger within their app and seems to be staffed with intelligent techie humans, not automatons grasping for a script (hello again Commbank). They genuinely like bug reports, too. (Yes, I’ve made some). Updates are frequent, and decent.
11. A partnership with Wise means overseas payments are very cheap. I believe it’s the same as if you signed up with Wise personally anyway. I’ve done that, so don’t use this: but it’s good to see.

What’s rubbish about it? Surprisingly little for me. In earlier versions of this article, I whinged about having no joint accounts and no virtual cards for online use. They now have joint accounts (“2Up”, a bit of a rethink about how a joint account works), and a virtual card (“Zap Card”). Commbank, of course, have joint accounts; but don’t do virtual cards yet, surprisingly (though, not surprisingly, because, remember, they hate you).

Up has also launched home loans, which are offset. I don’t need a home loan, but I highly recommend offset home loans: In the UK, I paid my house off using one. They don’t do credit cards, because they don’t hate you.

As Up Bank has grown, I have noticed a few little things that irk me. The customer “chat” support is now run either by automation, or someone who really, really likes copy/paste; a few questions I’ve asked have been answered with obviously copied responses that don’t answer the question. And the image at the top of this review is of the quite arresting and exciting welcome pack for new users, but a replacement card after my old one expired came in a much less personality-filled ordinary envelope, on a piece of brightly-coloured paper.

The slightly frustrating thing here is that Commbank could do most of this. The NLD INVST TRUST thing is a few database calls (and I believe there are companies that do this as a service these days); round-up is a relatively simple piece of programming; ‘upcoming’ is similar. Commbank could offer rather lower fees, too, but I guess they need to pay for their expensive branch network somehow. I also don’t dismiss that, while Up is a good bank for me, it might not be a good solution for a 70-year-old, who probably likes going into branches and talking to the staff there. But Commbank’s complacency is my gain, since Up is a rather better bank for me.

And for you, if you want to give it a go.

This signup link gives you (and me) $5 if you use it. Or give my Upname if you sign up in a different way: it’s _$james007_ , though don’t try paying me via PayID to that address, since I’ve blocked it after some weirdo sent me random amounts of money. Or don’t use it at all, that’s also valid; I wrote this as a review, and not as a complicated way to earn $5. If it was rubbish, I’d have told you.