Another Australian bank has announced it is waiving foreign transaction and overseas ATM withdrawal fees. As a result, the UBank USaver Ultra transaction account is now a competitive alternative to the Citibank Plus transaction account and a worthwhile option for travellers to consider.
The Citibank Plus transaction account has been extremely popular with overseas travellers for years, and for good reason. The debit card that comes with this free account can be used for fee-free overseas purchases and ATM withdrawals. This means you can withdraw cash at your overseas destination and pay no foreign transaction or ATM fees, other than any fees charged by the ATM operator.
The Citibank Plus transaction account is a great product, but UBank now joins a range of banks to offer an alternative. UBank is owned by National Australia Bank.
ING recently introduced a similar product with its ING Orange Everyday account. With this card, ING will even refund the overseas ATM operator’s fees. The HSBC Everyday Global account offers similar benefits.
The UBank USaver Ultra transaction account is available to anyone with a free USaver savings account. As this is a regular bank account with a debit card, you’ll be spending your own money – so no credit checks are required. Like Citibank Plus, this card would be ideal for withdrawing cash in foreign currencies when travelling overseas.
With these transaction accounts there is no need to pre-load foreign currency. Your Australian dollars will simply be converted to the foreign currency at the time of making a purchase or withdrawing from an ATM. The exchange rate is determined by Visa or MasterCard. In our experience, the Visa rate is slightly better – though there is little difference.
The USaver Ultra transaction account needs to be used in conjunction with a savings account. The good news is that this savings account earns interest. You’ll even earn bonus interest on your savings account if you open a transaction account and deposit at least $200 per month from a non-UBank account into your savings account. You must have less than $200,000 between your accounts to earn the bonus interest. The interest rate – currently 2.87% including the bonus – is only earned on the money in your savings account. But UBank’s “sweep technology” ensures you always have access to money in your transaction account while earning interest on as much of the remaining balance as possible.
By comparison, the Citibank Plus transaction account earns minimal interest.
Using a fee-free debit card to withdraw cash from overseas ATMs is not only easy, but usually more cost-effective than exchanging cash at a traditional forex outlet. So it’s good to see more fee-free debit card options for overseas travellers.
Join the discussion on the Australian Frequent Flyer forum: Ubank remove foreign transaction Fees