Neo banks are live – but do they live up to the hype?

Neo banks are live – but do they live up to the hype?

Australia’s neo banking market is heating up with 86 400 officially opening its doors today, and neo-rival Xinja receiving its full banking licence from APRA yesterday.

These digital start-ups face an uphill battle to wrestle market share from the big four banks. But are they just marketing hype, or are they putting good deals on the table?’s research team unpacks the latest craze in Australian banking:

Who are the neo banks?

Neo bank

Full banking licence?

Current products


Future products

86 400

Granted 18 July 2019

Transaction account, Savings account

Max savings rate of 2.50% if you deposit $1K per month

Home loans


Granted 9 September 2019

Early offering of transaction account


Deposit accounts and loans


Granted 24 April 2019

Term deposits

2.00% for terms of 2 years and over.



Using Bendigo and Adelaide Bank licence

Transaction account, Savings account

Max savings rate of 2.50% if you make 5 transactions.



Granted 22 January 2019



Deposit accounts and loans

Q&A with research director, Sally Tindall 

What are neo banks?

Neo banks are digital banks, controlled from your mobile phone typically with a customer service platform within the app. Already at large in the UK, Europe and US, Australia now has three banks offering live products with more to follow. 

Most banks already offer a banking app. What’s the difference?

Neo banks say their advantage is that they have no cumbersome legacy technology, and as a result, they can offer faster, smarter, streamlined banking.

The neo banks also differentiate themselves in their marketing. They’re presenting themselves as the Uber of the banking world in the hope this will resonate with customers fed up with the incumbents.

Are they a threat to the big four banks? 

The big four banks have deep pockets and they don’t like losing market share. The big banks are already investing heavily in retail banking technology. If the neo banks start gaining traction, the big four are likely to respond in spades to make sure they appeal to tech savvy Australians. 

We’re in an age where people are taking to disrupters with huge enthusiasm in other industries. But Australians are notoriously loyal to their bank. More than three-quarters of our savings are with the big four and their subsidiaries. Neo-banks are unlikely to rock this boat any time soon. 

Are they competitive? 

Neo banks are going to have to be competitive on two fronts: technology and price. 

So far, 86 400 and Up are both offering a maximum savings rate of 2.50 per cent, which is the equal highest rate on our database, while Judo Bank is offering term deposits of up to 2.00 per cent which is one of the most competitive rates on the market. 

When it comes to transaction accounts, the neo banks will find it near-impossible to compete on cost. Up and 86 400 transaction accounts include some international fees and don’t waive all domestic ATM fees when a growing list of banks do. 

High interest savings accounts


Max savings rate


My State


Deposit of $20/mth and 5 transactions



Mthly deposit of $1k



5 card transactions /mth



Mthly deposit of $1k

Note: excludes kids accounts and introductory rates. 

How neo transaction accounts stack up with market leaders


Domestic ATM fees

Currency conversion fees

O/S ATM fee
(from your bank)

O/S ATM fee
(from the provider)






Macquarie Bank




Set by ATM provider

ME Bank




Set by ATM provider


Set by ATM provider



Set by ATM provider

86 400

Set by ATM provider



Set by ATM provider

*ING account requires you to deposit $1K and make 5 purchases per mth for the free ATMs. Otherwise ATM and currency conversion fees apply. 

Will neo banks live up to the hype?

There’s no question neo banks will help drive innovation in the sector. Neo banks don’t have cumbersome banking systems that have been known to slow the bigger banks down. They also don’t have branches which will help them save on costs.

In order to be successful, neo banks will have to patiently chip away at the market. But the big banks won’t go quietly into the night.

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Learn more about bank accounts

Can you open another account at the same bank?

Yes, you can open another account at the same bank if you already have an account there, but some banks place a limit on how many specific accounts you can open.

Generally, though, it is possible to have more than one everyday account, one personal account and one joint account, or have different types of accounts – such as a transaction account and a savings account.

Keep in mind that some bank accounts come with fees, so you could be charged twice for having two types of the same account at the same bank.

Also, if you have more than one high-interest transaction account at the same bank, only one account will be able to earn the highest rate of interest.

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

Do you need a bank account to get a credit card?

To get a credit card, you need to show proof of income, which will almost certainly require you to have a bank account.

Can I close my bank account over the phone?

In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.

By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.

In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.

Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

How can I close an ANZ Bank account from overseas?

There are two ways you can close your ANZ Bank account from overseas:

  • Call +64 4 472 7123 (toll charges apply)
  • Send a bank mail request via ANZ internet banking

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

Can foreigners open bank account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

How long does it take to open a bank account?

The length of time it takes to open a bank account varies, depending on whether you want to open it online or in person.


Most banks and credit unions have simple online applications that usually take no more than 10 minutes to fill out. It can be especially fast if you have your identification documents like your driver’s licence and passport handy. Sometimes you will instantly be approved and the bank account opened. However, depending on the financial institution, it may take a day or so to be processed and your account number issued. Your account information and ATM or debit card will then be mailed to you, which usually takes between five to 10 days.

In person

If you decide to go into a branch or office to open a bank account, it may take about half an hour. Make sure you bring your identification documents with you. Also book an appointment if you can, otherwise you might be forced to wait in line. Sometimes your ATM or debit card will be issued on the spot, otherwise you’ll need to wait for one to arrive by mail, which usually takes between five to 10 days.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

Can foreigners open bank accounts in Australia?

Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. You will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

How do you delete your bank account from PayPal?

Deleting your bank account from PayPal is a simple three-step process:

  • Go to your Wallet
  • Choose the account you’d like to delete
  • Click ‘Remove bank account’