Ubank Tricks: Non-Zero Account-Keeping Fee on Zero-Interest "Ultra" Account

You KNOW you're dealing with another Non-Competitive, Aussie dinosaur when:

Mug's bank, IMO: NAB's "Internet-wannabe" UBank claims to offer its "USaver Ultra" account with "No monthly account keeping fees" but a required deposit, in Zero-Interest "Ultra" account comprises a de facto monthly fee - from $3.62 to $18.10 per Year, in interest loss, by each customer, who wants (free) Visa debit card access to their "Ultra" money.

In fact, they require loss-of-interest up to $18.10 / Year (at current interest rates), ie, by requiring that $100 (after arranging 5 times as much) be kept in each Zero-interest "USaver Ultra" account.

UBank actually start up a new "USave Ultra" account set to keep 500% more in the account - ie, $500 - which (if customer doesn't know to reduce it) can cost interest-losses of $ 18.10 / Year.

Not much, perhaps, but (up to) over $1.50 / month (if $500 default stays).

=== Here's how a new UBank "Ultra" account-holder put it (in a Secure eMail to UBank, offering "Online Banking Feedback"), edited by us:

"I'm disappointed that UBank would set, for newly-created Ultra accounts - by default - a 500% (ie, 5 times) HIGHER-than-Minimum-required 'Sweep-balance' for these Zero-Interest "Ultra" accounts.

Specifically, UBank sets the new account's Sweep balance at $500, when only $100 is actually required to lose interest in, each day, by sitting in the Sweep category, from the start of each day.

UBank's default thereby insults its customers' intelligence by assuming they'd choose - by default - to pay FIVE TIMES the minimum required de facto monthly Account-Keeping fee.

I suspect this costs some (to many) UBank customers unnecessary losses of interest, each month, eg, if they don't know or think to change it, ie, down from default $500 to the minimum required $100 Ultra balance.

The implication of NOT manually doing so, is that - if customer spends or withdraws from their Ultra account (using their Visa debit card), across the day - an end-of-day auto-Sweep process tops it up, daily, from the only interest-bearing account of the two (ie, USaver), thereby causing a loss of interest, from the customers' perspective.

This amounts to a de facto Acc't Keeping fee (currently, up to $3.62 / mon) - for the Zero-Interest Ultra account, and CONTRADICTS the claimed "No Account-Keeping fees" attribute of the (& these) account(s), stated elsewhere.

If UBank needs Donations to survive, I suggest it request them, openly."

===

Here's how UBank say their "Sweep" works:

"Every night, the SWEEP automatically moves available funds between your accounts to help ensure you keep just the right amount of cash available in your Ultra account.

The SWEEP is based on limits you set, with a minimum ‘sweep to’ limit of $100.

To set your limits, go to:

My Money > Managing > Accounts

When setting your limits, remember that balances held in your Ultra don’t earn interest.

You can set the minimum ($100) and maximum amount of cash you want to keep in your Ultra by going to My Money > Managing > Accounts.

Ultra balance too low?

The SWEEP will automatically top up your Ultra from your USaver (assuming there are sufficient funds available) to make sure you have cash available the next morning.

Ultra balance too high?

The SWEEP will transfer money back from your Ultra to your linked USaver to make sure your extra cash benefits from the competitive interest (and bonus rate if eligible) in the USaver.

Earn up to 3.62% p.a.* on balances held in the USaver Savings account linked to your Ultra.

(*Variable interest rate including the Ultra Bonus currently 1.06% p.a.)

To earn the Ultra Bonus Rate you must:

Deposit at least $200 into your Ultra or linked USaver from an external source.
Maintain a total balance of not more than $200,000 across all your USaver and USaver Ultra accounts, inclusive of all joint accounts.

If you meet these criteria in any month, the Ultra Bonus Rate will be paid on your linked USaver for the following month."

Note: That NO mention is made of UBank's default Sweep setting ($500);
customers have to notice it themselves; who would think to look for it?

===

Interest - I'm told - is "calculated Daily" but "NOT compounded" (rather, it's paid in the following month, resulting in lower interest earnings).

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Comments

  • +1

    Steer clear of them then,stash your money to ING or RAMS.No need to complain.

    • RAMS? Tell us more… What's their highest interest rate?

      • Currently highest among major banks,3.80%p.a.,no withdrawal.

        • When did they -last- drop their rate?
          (Perhaps they're just about to do so?)

          IF YOU WITHDRAW $$ from RAMS,
          YOU LOSE 1.6% Variable Bonus,
          for that Month!!!

          RAMS look like Home Loan brokers…
          Are Savings deposits there Insured

          Do they do Continuous Interest Compounding?

          (UBank do NOT, per their call-centre staff;
          they say they compute interest daily, but
          pay it monthly.)

  • +4

    Hi IVI, completely agree with you that there is an interest loss/indirect account keeping fee. But, auto sweep is a very good feature which allows me to draw as much as I want from my account (more than whats in Ultra by sweeping from the linked usaver account) exactly when I need.
    In my opinion, this saves me interest and effort of switching funds to my transaction account from savings account exactly when direct debit triggers for insurance, gym, car loan etc.
    When it comes to the minimum 100$ that we have to maintain, I am sure most of us maintain around 100$ in transaction account for easy ATM/POS transactions without having to login and transfer from savings account. Again, this is just my opinion.
    With interest calculation, that's exactly how every bank does - calculate daily , compounded monthly. This is same even for loans where customers pay interest to bank.

    • How can / does Sweep -save- you interest?

      To save interest, I would just keep almost all $$ in the only interests hearing account of the two.

      Just before making a payment or a withdrawal, I'd use their alp to move just what I need to the Zero-interest Ultra.

      Sweep has another Interest-losing problem:

      • if you get a big deposit, into your Ultra, I presume, it can auto-move some $$$ into the interests bearing account (sounds good, so far)..BUT

      • the lowest amount it leave in the interest Losing account is $1,000 (good only for UBank), which is WAY to high for most mugs, & could make vulnerable people (eg, fraile elderly) targets, unless they MANUALLY move more of the large deposit out, so anyone pressuring them to make a withdrawal at an ATM can only get a little $$.

      To build a tool, but inflict arbitrary limits (initially, the $500 default Sweep min. &, forever, an unduly High Sweep upper-limit, that sets up the mug for loss of even MORE interest than typical customers would want / need to lose… This is what I detest about UBank!!

      They work AGAINST their customers' interests, tarnishing both UBank's & NAB's reputations, for a few dollars each month.

      I've been unaware of such tricks, for decades, because i'm with a bank that hasn't been playing them, AFAIK: ING Direct.

      • AGAINST their customers' interests

        You just realised that banks are a business, not a charity? Perhaps you should submit a feedback form to them demanding they give you a free $200 cheque every month.

      • +1

        Here is how it saves me interest:
        I have many direct debits which trigger on different days of the month. Inorder for these direct debits to be successful, I need required amount in transaction account on the day the direct debit triggers. There are two options here:
        1. For direct debits on a given day , login and transfer (or setup auto transfers) the funds from savings account to transaction account. But this has to be done atleast a day before as we dont have control on the time when direct debit triggers. This will result in interest loss for that amount (which can run into thousands considering rent, insurance, loans etc). If we forget to transfer the amount before direct debit triggers, we will end up paying fine for failed direct debit.
        2. Leave the funds covering all direct debits in transaction account from pay day - loss of interest again.

        With auto-sweep, we can leave all our money in savings account and auto-sweeps takes care of the funds transfer at the time of direct debit. This saves (atleast I believe it does) me the effort and interest. Before this feature was available I was with another bank (I still have salary account there) where I used to maintain more than 100$ in transaction account to cover ATM/POS transactions. ATM/POS transactions can still be handled by logging into app and transferring funds. But I need not worry about adhoc transactions (Ex: myki money auto-topup) with auto sweep.

        With big deposit scenario, unlike the online savings account from other banks, you can deposit the amount directly into linked usaver.

        Having said that, its a fact that ING and some other banks are paying more interest on savings and ING in particular gives a cash-back.But interest benefit depends on the amount in savings account. Depending individual scenario it may be beneficial to switch funds into one of the other bank's accounts.

        Changing the minimum from 500 to 100 is something that the customer must be aware - but given UBank is complete online , I am sure most are aware. All I intend to say is that the minimum 100$ is not a trick and auto-sweep can be used to benefit us.

        This is all based on my financial scenario as a Ubank customer.

  • +2

    many people leave lots of $$$ in low interest transaction accounts. $100 is nothing really. many sadly people can't give a hoot about switching to a bank that gives a higher rate.

    ubank don't hide the fact that they sweep a minimum of $100 each day, so it is not really a trick.

    • -3

      Really? What about the $500 default? Most would assume it's the min., I bet (& so does UBank!)

      I hope i'm wrong…

      PS So, why put boulders in the path of the blind? Earn a reputation for honesty, without tricks.

      This kind of nonsense permeates the society, with apologists for the bank (eg, above) claiming people don't mind losing $$$, rather than EXPECTING better service & customers focused tools.

      Hey, one thing UBank's app has got right is a suggestion collector, that sorts ideas by no. of votes othser give them. You can only vote a +1 (so, don't vote on an idea, if you don't like it)… There's No Negging, something OzB could learn from, IMO.

      • some people wilfully pay monthly account keeping fees because they feel it provides value. value is a subjective thing. what might be best for you might not be best for everyone else. and of course there will be some people who are ignorant or simply don't care.

        one could make an argument that you are getting value by enabling you to have most of your cash stored in a high-interest account and swept when you need it. yes, you could achieve the same outcome using a mobile banking app.

        i have all my money stashed in a ingdirect savings maximiser account, even when ubank's rate was slightly higher than ingdirect's because i perceived ingdirect's service as better value for my needs.

        (i didn't neg you btw)

  • That's how everyone calculates interest. Non-story.

    • Customer-focused banks compound continuously.

      This should be the norm. I hope it is for credit unions, at least.

      It's like insulting the mobile Internet buyer with a min. Charging Block size of 1 MB, so that a 5 GB quota doesn't go as far. Other providers win my business by using a 1 KB block.

      Scamming mugs is like a car maker not installing seat beats or out-of-sight airbags, to save $$$, IMO. OK, not quite the same… But not good.

      • +1

        Name the providers who compound continuously. And as KK mentioned, do you want the same treatment on loans?

  • +1

    The $100 in the account is not an issue for me, but nonetheless I haven't been pleased with UBank's rate cuts and I'm planning on shifting funds back to ING Direct.

    • iNG has cut a bit, too. But they remain a bit above:

      3.62% UBank vs 3.77% ING

      And, as you may know, ING's app is world class best, especially on iPad, IMO.

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