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The 2016 Online Banking Award Report looks at 51 providers and rates their online offering against each other.

 

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Helpful Information on Online Banking Accounts

What is online banking? What is an online savings account?

An online banking account is any savings and/or transaction account that allows you to perform your banking activities online via the internet.

An online savings account is a savings account where you manage your funds using the internet and earn interest on the balance. Many online savings accounts are “online only”, meaning you can’t make ATM withdrawals directly from the account. However, a growing number of online accounts are combined savings and transaction accounts, where you can make online and in person transactions using the account.

A combined online transactions and savings account can work out cheaper for those who make a lot of transactions in and out of the account. Earning interest adds value for someone who doesn’t want the fuss of transferring money in and out of a separate savings account.

According to the Canstar Blue 2015 banking survey of more than 3,500 Australian adults, online banking is now used by a staggering 90% of Australian customers. We were impressed to see how many seniors are getting online to do their banking.

  • 97% of Gen Yers aged 18-24 young adults use online banking.
  • 91% of Gen Xers aged 40-49 use online banking.
  • 89% of Baby Boomers aged 50-59 use online banking.
  • 86% of Baby Boomers aged 60 and over use online banking.
  • 76% of Seniors aged 70 and over who have internet access use online banking.

How Australian customers access their online banking

There are so many different ways to access the internet now – meaning so many different ways to do your online banking!

PC or Laptop

According to the Canstar Blue 2015 banking survey:

  • 59% do their online banking on a desktop computer.
  • 57% do their online banking on a laptop.

Compare this situation to ABS statistics from 1998, when just 16% of households had internet access at home.

Mobile smartphone

Over 12 million Australians (76%) use a smartphone to access the internet, according to the Australian Communications and Media Authority (ACMA). According to the Canstar Blue 2015 banking survey, 39% do their online banking on a mobile phone. The Commonwealth Bank advises that over 500,000 of their customers aged over 40 actively use their CommBank App.

And these figures look set to grow. The number of Aussies going online on their phones doubled between 2010 and 2014, according to ACMA. In fact, 21% of adult Australians are “mobile phone only” internet users who have no fixed internet connection.

Tablet

In just 4 years from 2010 to 2014, 50% of Aussie internet users had embraced the tablet, according to ACMA. 39% of tablet owners used their device for conducting financial activities online. Our Canstar Blue 2015 banking survey showed that 20% of Aussies use a tablet device for online banking.

What are the current interest rates for online savings accounts?

High interest savings accounts are popular and everyone wants to earn the best interest rates. The following interest rates for savings accounts are current at the time of writing in October 2015:

  • Min:05%
  • Average:30%
  • Max:40%

Average interest rates have dropped since the RBA cash rate cuts in 2016, so you’ll have to shop around to find a good interest rate.

What about combined transactions and savings accounts online?

Do you still need to have separate transactions and savings accounts? An increasing number of institutions are offering transaction accounts with a healthy interest rate for your savings – read our Everyday Banking & Savings Accounts Award report to see which ones.

Common features of online savings accounts

There are a few basic things you should be able to do using online banking or an online savings account:

Internet banking functions accessible in a browser:

  • Secure application process including ID verification
  • Secure log-in process
  • Make a wide range of transactions and payments
  • Create reports or e-statements for your account
  • Easy to use self-service menu
  • Use self-help education and tools as needed
  • Contact banking institution using online or email customer service
  • Find your nearest ATM or branch using online location services

Mobile banking functions accessible in an app:

  • Make transactions and payments
  • Make contactless payments in person using phone app instead of card
  • Get account information
  • Transfer money between your accounts
  • Access your transaction history
  • Calculators for home loan repayments, currency conversion, and share trading
  • Contact form through app
  • Apply for other banking products through the app
  • Find your nearest ATM using app location services

Common fees charged on online savings and transaction accounts

A combined online savings and transaction account may well have some fees because of the ability to make many transactions. Some of the more common fees may include:

  • Monthly account-keeping fees
  • EFTPOS transaction fees
  • Electronic transaction fees such as BPAY fee
  • Branch cash deposit or withdrawal fees
  • ATM withdrawal fees from your own bank and other banks
  • Cheque deposit and withdrawal fees

How good is the security for online banking accounts?

These days, the security is pretty good! Since the invention of the first savings account, banks and financial institutions have been at the forefront of new security measures to keep your money safely tucked away.

Some of the most common security measures for online banking include the following:

  • Customers log in with a password.
  • Customers can confirm their password log-in with an additional security code that is texted to your mobile phone or other device – known as “two step verification” or “two factor authentication”.
  • Banks use advanced anti-virus protection and firewalls to stop virus threats and other unauthorised access from reaching their centralised computer network.
  • Banks use encryption technology when sending any electronic instructions or information between you and the bank, such as when making payments or viewing account information.
  • Online banking log-in entries cannot be cached, meaning your account log-in entries are erased as soon as you log out from the site. This means no one who has access to your computer or device can retrieve your password from your app or web browser and log in to your account.
  • Customers may have to authenticate the validity of a transaction before payment is made, e.g. by entering a security code or by entering the numbers and letters shown in a picture.
  • Online banking will automatically log out (“time out”) after a period of inactivity by the customer when logged in to online banking.
  • Access to online banking account will be locked out after a number of unsuccessful log-in attempts.
  • Online banking will show customers the time and date of the previous log-in to the account, so that customers can confirm there has been no unauthorised access.
  • Fraud detection teams will contact customers via phone if unusual activity is detected on your account, and the card may be stopped so that funds are frozen and cannot be used by thieves.

When it comes to near field communication (NFC) payments such as making a contactless payment using a mobile phone app instead of your bank card, banks are using the same measures to keep your phone secure as they use to keep your card secure. Other measures can include biometrics, a fingerprint sensor technology where you can sign in to your mobile banking with a single touch if your phone has a touch screen. Bank of Melbourne was the first institution in Australia to launch this form of technology with their Touch ID security.

How can you keep your online banking account safe?

Criminals know that it is very difficult to get past the advanced security systems of banks, so they usually focus on tricking customers into giving away their own confidential information. You can avoid becoming a victim of online monetary theft or identity theft fraud by protecting your information and protecting your online banking devices.

First off, you need to create a secure password that is easy for you to remember without writing it down but hard for anyone else to guess. Here are our top tips for a good password:

  1. Create different passwords for all the websites, emails and mobile devices you use.
  2. Change all your passwords regularly.
  3. Use letters, numbers, symbols and spaces in your passwords to make them harder to guess. Any password that is just a word you can find in a dictionary can be hacked. For example, “Slip Slop Slap” could become “51ip 510p 51ap” instead.
  4. Don?t use any publicly available information about yourself in your password, such as your birthday, age, address, or phone number.
  5. Don’t use the names of any of your family members or pets in your password.
  6. Personalise your passwords with something that would be hard for someone else to guess, like the title of your favourite book, or a catchy advertising jingle you?ve always been able to remember.
  7. If you?re alone when you?re keying in a password, say it out loud as you type. This will help it stick in your memory.

Apart from creating a secure password, you can also keep your information secure when doing your banking online by following these tips:

  • Never use unsecured public Wi-Fi to do your online banking.
  • Install anti-virus software on your computer and mobile devices, and update the software regularly.
  • Always access your online banking through your bank?s main web address or their own app, not any address or app created by a third party.
  • Make sure no one can view your screen.
  • Set your smartphone and tablet to automatically lock when not in use, so that no one can access your device without your password.
  • Store your mobile devices in a safe place.
  • Always, always, always log out of your online banking site by clicking on the ?Logout? or ?Sign-out? icon.
  • Close the browser by clicking on the ?X? icon before you move on to any other websites.
  • Regularly clear your browser’s cache to wipe out any stored copies of web pages from your device.
  • Don?t give anyone else your customer ID or online banking password.
  • Keep your PIN and internet banking log-in details and passwords safe and don’t keep them written down anywhere if you can help it.
  • Do not use the same password for your online banking as for any other website. Do not use the same password for unlocking your phone as for logging into your online banking app.
  • If you suspect someone has your online banking details, change your password immediately.
  • Contact your bank if you lose your smartphone or tablet, especially if your bank uses an SMS text message as a security measure to authenticate transactions.
  • Whenever you receive a text message from your bank to authenticate a transaction, delete the message immediately after using the code.
  • Delete all text messages from your bank on your mobile device before sharing or selling the device.
  • If you are having trouble accessing online banking when you are overseas, call your bank?s phone number.
  • Read the privacy policy before providing personal information to any website.
  • Be wary of free downloads or screensavers, as they can sometimes contain malware or spyware. Only download apps from reputable app developers, using an official app store.
  • Always delete spam hoax emails. No bank will ever send you an email with a link to your online banking or ask you to provide your account information by email or online. If you receive a suspicious email but you’re not sure if it is legitimate, call your bank and ask.
  • Check every bank statement and call your bank if you see anything you don’t remember paying for.

Online banking has come a long way from its humble start in the late 1980s.

‘Home banking’ was its first form, created in 1981. Banks would mail to us a floppy disk with software that we could install on our home computer, so that we could check our account balance over a dial-up modem connection. Being able to check balances and making transfers this way was expensive for banks, so a hefty fee was attached for customers.

In the mid-1990s, banks set up their own websites for customers to access product information and contact information. By the late 1990s, banks had made a giant leap forward and were launching internet banking. Customers could now pay bills, order statements, and view up to 90 days of transaction history online.

Not much has changed since then. Many facilities still only provide 100 days of transaction history. You probably still have to call your bank if you need to query a transaction.

However, online banking has gotten a lot smoother over the past few years. Apps and websites have better functionality and are much easier to use, with better security in place. Secure messaging using online banking is making it faster to get a response from your bank than in the days of snail mail.

Please note that these are a general explanation of the meaning of terms used in relation to online banking accounts. Your bank or financial institution may use different terms, and you should read your product disclosure statement carefully to understand everything that may apply to your account. You cannot rely on these terms in relation to any product you may purchase.

Account-keeping or administration fee: An ongoing fee charged to cover the bank’s administration costs of creating and maintaining the account. Usually charged monthly, and usually waived if you deposit a certain amount per month into the account.

Annual equivalent rate (AER): An interest rate that can be compared between lenders so that you can compare the return you might expect over time from different savings accounts.

At call: “At call” transaction or savings accounts allow you to immediately withdraw your money from the account whenever you like.

ATM (Automatic Teller Machine): A machine that allows you to withdraw cash from the funds in your account. These usually operate 24/7 and can be found in public places such as shopping centres or petrol service stations.

Balance: The amount of money available in your account.

Basis points: A unit of measurement used to describe the percentage change in interest rates or the value of a financial product. One basis point is 0.01%.

Bpay: An electronic bill payment system in Australia, where bills are paid through a financial institution’s online or telephone banking facility to registered merchants (‘billers’).

Branch: The physical building where your bank or financial institution exists. Branches are only open during normal working hours.

Cash: Money in the physical form of notes and coins.

Consumer: Someone who buys and uses products or services.

Debit: Withdrawal.

Debit card: A card that is linked to a transaction account and allows the cardholder to make payment transactions and ATM withdrawals. Also known as a bank card or cheque card.

Deposit: Money that you put into an account with a financial institution. (A “deposit” can also refer to a down-payment on an item you are purchasing, paid as a promise to purchase.)

Direct deposit: When a transaction is automatically removed from an account and received into a different person’s account. For example, you can set up a direct debit to pay your electricity bill when it comes due.

EFTPOS (Electronic Funds Transfer at Point of Sale): A payment system where you use your debit card to make payment for goods or services or withdraw cash.

Electronic banking: A broad term used to refer to the banking system where you use online banking, telephone banking, ATMs, or EFTPOS to access your account. You can use electronic banking to make withdrawals or other payments, deposits, or transfers.

Financial Ombudsman Service (FOS): Australia’s free and independent dispute resolution service that helps consumers make complaints and resolve disputes with their banks, insurers and other financial institutions.

GST (Goods and Services Tax): The Australian tax levy on payments for goods and services.

Income: Money you earn, including wages, salary, interest, government benefits, and rental income.

Inflation: The percentage by which the price of goods and services rises each year.

Interest: An amount of ‘extra’ money that you earn by having a positive balance of money deposited into your bank account, earned over time and calculated as a percentage of the balance of your account.

Introductory rate: An introductory offer where a bonus interest rate applies to the savings account for a set time period. At the end of the bonus period, rates revert to the base rates.

Online banking: Internet banking. This can be done in an internet browser on any computer, smartphone, or tablet device that has internet access. It can also be done using an app on a smartphone or tablet.

Pay Anyone: A payment system where you can transfer money to any individual or organisation using online or phone banking, as long as you have their account name and number.

Reserve Bank of Australia (RBA): The central government-owned institution in Australia that issues bank notes, sets the official cash rate to meet the inflation target, maintains a financial payments system, and manages Australia’s gold reserves and foreign exchange currency reserves.

Savings account: Bank accounts that pay significant interest back to the account holder and cannot be used to make transactions. Savings accounts typically have higher interest rates than transaction accounts. They can be linked to transaction accounts to make savings available as funds for transactions as needed.

Transaction: The movement of money in or out, including deposits, withdrawals, and transfers between bank accounts.

Transaction account: A deposit account where your money is available for day-to-day transactions. Provides frequent access to funds in your account for making payments through EFTPOS machines, online, ATMs and branches, and also for the use of cheques.

Withdrawal: When instructions are carried out to pay money out of your account and it is paid, e.g. when you get cash out from an ATM.

Who offers online banking accounts in Australia, and how do we rate them?

To compare online banking accounts, take a look through the results detailed in our report on the latest Award for Online Banking. See how your current institution stacks up with what is available on the market, and switch if you’re not satisfied.

The below list is current to 2016. For more information on how CANSTAR rates online banking accounts, read the Methodology in the Online Banking Award report.

  1. AMP Bank
  2. ANZ
  3. Australian Military Bank
  4. Auswide Bank
  5. B&E Pedrsonal banking
  6. Bank Australia (formerly bankmecu)
  7. Bank of Melbourne
  8. Bank of Sydney
  9. BankSA
  10. BankVic
  11. Bankwest
  12. Bendigo Bank
  13. Beyond Bank
  14. BOQ
  15. Commonwealth Bank
  16. Community First CU
  17. Community Mutual Group
  18. CUA
  19. Delphi Bank
  20. Easy Street Financial Services
  21. ECU Australia
  22. Encompass Credit Union
  23. FCCS Credit Union
  24. First Option Credit Union
  25. G&C Mutual Bank
  26. Gateway Credit Union
  27. Heritage Bank
  28. Horizon Credit Union
  29. HSBC
  30. Hume Bank
  31. IMB
  32. Macquarie Credit Union
  33. ME
  34. My Credit Union
  35. NAB
  36. Newcastle Permanent
  37. Northern Beaches Credit Union
  38. P&N Bank
  39. People’s Choice Credit Union
  40. Police Bank
  41. Queensland Police Credit Union (QPCU)
  42. QT Mutual Bank
  43. Queenslanders CU
  44. Rural Bank
  45. SERVICE ONE Alliance Bank
  46. George Bank
  47. Summerland Credit Union
  48. Suncorp Bank
  49. The Capricornian
  50. The Mac
  51. The Mutual
  52. UBank
  53. Victoria Teachers Mutual Bank
  54. Westpac
  55. Woolworths Employees Credit Union
  56. Your Credit Union