Afterpay banking – how it stacks up against the competition

Afterpay banking – how it stacks up against the competition

Buy now, pay later juggernaut Afterpay has released details of its new banking products due to launch in October. However, with around 100 banks to choose from in Australia, will Afterpay be able to win customers over?

Afterpay Money will offer fee-free transaction and savings accounts in its new app, which will provide customers with an overview of their spending and saving.

Customers will need an Afterpay buy now, pay later account to apply but the bank accounts will be managed by Westpac, with Afterpay acting as the distributor.

What Afterpay Money will provide What the app won’t include
Transaction account Home loans (incl offset and redraw facilities)
Savings accounts (up to 15) Credit cards
Summary of Afterpay BNPL purchases Other loans
Budgeting and savings tips Summary of other BNPL platform purchases

Note: other features may be added later. has analysed Afterpay Money’s new transaction and savings accounts and compared them to what’s already on offer.

Afterpay savings account – how it stacks up against the competition

  • 1.00% is the current Afterpay Money savings interest rate.
  • 0.35% is the average big four bank conditional savings rate.
  • 1.35% is the highest ongoing savings rate from ING available to all Australian adults.
  • 3.00% is being offered by Westpac and BOQ to young Australians, Afterpay’s current target market.
  • Afterpay Money has no monthly terms and conditions to earn the max interest, whereas most market-leading savings accounts do.

Afterpay transaction account – how it stacks up against the competition

  • Afterpay Money won’t charge customers fees, however, fees can be charged by third parties.
  • 8 banks don’t charge any standard fees (account, domestic/overseas ATM, currency conversion fees). Most banks don’t charge account keeping fees.
  • Only ING waives all standard fees and refunds third party ATM fees in Australia and overseas, if terms and conditions are met.
  • The big four banks charge account fees for currency conversion and overseas ATMs. CBA, Westpac and ANZ also charge account fees in some cases. research director, Sally Tindall, said: “Afterpay has a strong brand and more than three million Australians already on their books, but it’s entering a crowded market, dominated by four incumbents with deep pockets.”

“It’s hard to see this new money app blowing the big banks out of the water,” she said.

“A savings rates of 1 per cent is likely to attract customers, particularly with no hoops to jump through to qualify. However, Afterpay’s rate is still significantly lower than the 3 per cent its partner Westpac is offering young Australians.

The company says its new money app will provide “a single, seamless view” of a person’s finances.

“With access to just three products – savings, transaction and buy now, pay later – the app is likely to fall short of being a one-stop shop for many customers.

“Afterpay makes most of its money from merchant fees so its modus operandi is to keep people spending. It will be interesting to see how it weaves the saving lessons in,” she said.

Afterpay savings account vs. the competition

  Max ongoing rate Max deposit Monthly conditions for max rate
Afterpay Money 1.00% Up to $15M None
Big four banks (average) 0.35% No limit Make one deposit and no withdrawals.
Highest ongoing savings rate for all adults
ING 1.35% $100,000 Grow savings bal/mth, deposit $1K+ in linked account, make 5+ purchases/mth. No conditions for under 18.
Highest ongoing savings rates for young adults
Westpac Life

(ages 18 – 29)

3.00% $30,000 Grow savings balance each mth and 5+ purchases/mth with linked account.
Bank of Queensland

(ages 14 – 24)

3.00% $10,000 Deposit $200+/mth & make 5+ purchases/mth with linked account.

Source: Note: Big four accounts are the average of their goal saver accounts. Terms and conditions for max rate differs slightly between the big four banks. Max deposit listed is the maximum you can put in and still get the highest rate listed.

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Fact Checked -

This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.



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Today's top savings accounts products


Learn more about savings accounts

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can you have multiple ING savings accounts?

Yes, you can open up to nine accounts with ING at any particular time. If you’re saving money for various goals, such as buying a car or taking a holiday, you can name each of your multiple ING savings accounts differently.

To get a Savings Maximiser account, you’ll need to deposit more than $1000 every month and make at least five additional purchases. If you also want to grow your savings, from 1st March 2021, you can earn up to 1.35 per cent per annum variable interest on one account with a balance of up to $100,000 when you also maintain an Orange Everyday account.

With ING, multiple savings accounts can help keep track of all your savings goals. All the accounts offer flexible withdrawals where you can withdraw as low or as high as you want without impacting your earning interest rate. However, you can only earn the bonus interest on one account. To apply for a Savings Maximiser account, you can visit

What is an ANZ locked savings account?

An ANZ locked savings account locks your money and prevents you from spending. You may use a standard savings account as the account where your salary is deposited. You can then withdraw funds when needed, but aren’t able to make purchases with it. However, this account may not grow much as the continual withdrawing of funds will limit the interest you can earn.

With a locked savings account in ANZ, you know your savings will grow because you can’t access the money. You can also qualify for a bonus when you deposit at least $10 per month and don’t make any withdrawals. To help you with this further you can set up an automatic transfer from your regular ANZ savings or transaction account so you don’t forget to make a monthly deposit.

Your ANZ locked savings account offers you a base interest rate of 0.1 per cent per annum plus an additional bonus interest of 0.49 per cent per year. The interest is calculated daily and credited to your account on the last working day of the month.

Should I open a Commonwealth locked savings account?

If you have trouble saving money, a Commbank locked savings account could be a potential solution. A locked savings account won’t let you make withdrawals and as such, it can help you grow your savings balance if you keep topping it up. 

The Commonwealth locked savings account advertises high-interest rates and minimal maintenance fees, along with a host of other incentives that will encourage you not to touch the money. 

The account offers a higher interest rate for each month that you make limited or no withdrawals, as well as regular deposits. 

To qualify for a Commonwealth locked savings account with the advertised features, you will need to fulfil specific criteria such as:

  • Depositing a fixed minimum amount into the account every month.
  • Making a fixed number of deposits each month.
  • Making a minimum or no withdrawals each month.
  • Maintaining a minimum account balance.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

What is a Westpac locked savings account?

The Westpac locked savings account (also known as "Westpac Life") can help customers reach savings goals faster through bonus interest. Customers receive 0.2 per cent standard base interest with a variable bonus rate of 0.35 per cent when the closing balance at the end of the month is higher than the opening balance.

There are some conditions to earn the bonus interest on Westpac's locked savings account, though. First, you’ll need to increase the balance each month either through a deposit or not making any withdrawals, and then link it to a Westpac Choice account and make at least five eligible payments using your debit card. Please consult your bank as to what an eligible payment is. 

Should I open multiple savings accounts with UBank?

UBank offers customers an opportunity to make the most of their savings by opening multiple savings accounts. Having multiple savings accounts with UBank may be ideal for savers tracking different goals in separate accounts. 

It’s important to note that to earn bonus interest, you will still need to meet the conditions of the UBank savings account every month. If you don’t make these deposits, you will receive the standard interest rate, which is typically lower. 

Keep in mind that you won’t earn bonus interest on your UBank savings account in the month an account is opened and if you open multiple savings accounts with UBank, you'll start earning any bonus interest the following month. 

It's also not yet known how long the special interest rate will hang around for, so please check with your bank for more information. 

What are the requirements of an ING Bank locked savings account?

An ING bank locked savings account - also called a term deposit - offers you interest in exchange for holding your money for a period of time.

The terms offered include as little as 90 days or as long as two years. Generally, the longer you lock your money away, the higher the rate of interest. 

The minimum deposit amount for an ING locked savings account is $10,000. 

To be eligible to apply, you must: 

  • Be an Australian resident for tax purposes
  • Be aged 13 years or older
  • Hold the account for personal use (ING offers business term deposits as a separate product). 


How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

What are the two types of NAB locked savings accounts?

With a locked savings account in NAB, you can earn bonus interest and learn financial discipline. NAB offers two types of locked savings accounts, each with their own terms and conditions.

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 if you make a minimum of one deposit on or before the second last banking day and have no withdrawals in the month.

Meanwhile, the NAB iSaver account provides 0.05 per cent as the standard base interest rate and a fixed bonus margin of 0.55 per cent during the first four months from the date of opening the account. You can park your cash in the account and enjoy unlimited monthly transfers between linked daily bank accounts without impacting the interest rate.

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.