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

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.

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

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.

Opening a bank account for someone under 18

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

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.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

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.