Barefoot Investor bank accounts: best banks in 2022

You’ve read The Barefoot Investor, but want more information on how to actually set up the barefoot investor bank accounts? Check out the best banks in 2021

Barefoot investor bank accounts

The Barefoot investor Scott Pape is known for his ‘no nonsense’ and straightforward advice in his easy to read personal finance book ‘The Barefoot Investor‘. In the Book he gives readers very simple, actionable advice on everything from how to reduce your bills, setting up your super, and of course, what the best bank accounts are. This article will delve a bit more into The Barefoot Investors account recommendations for online banks, as well as what some of the best online banks are at the moment to use for setting up your barefoot buckets.

“Do I still use the ING Orange Everyday account? Yes, I do, though there are plenty of good accounts on the market at the moment (they change all the time). However, as of June 2020, here are some that are as good as ING and possibly better, depending on the feature set you’re looking for…”

The Barefoot Investor

The Good

  • Simple and proven money management strategy
  • No sign up or ongoing fees
  • Keeping emergency fund separate from daily accounts removes temptation to spend
  • Automated process requires no ongoing effort

The Bad

  • Annoying to change all your direct debits
  • Need to use two different banks
  • Not all banks will issue multiple debit cards

Verdict: Setting up the barefoot investor bank accounts is a simple money management technique with proven results. It is easy to do with the banks reviewed below

The Barefoot Investor
  • Pape, Scott (Author)
  • English (Publication Language)
  • 296 Pages - 11/14/2016 (Publication Date) - Wiley (Publisher)

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Barefoot investor bank accounts

Introduction to Barefoot Investor bank accounts

We all know the Barefoot Investor Scott Pape is legendary at sniffing out all the best deals and calling out companies on their bullshit deals. So what does he think about bank accounts?

The best way to get a good bank account with no fees and a decent interest rate is to go with a discount online bank, seperate from any lending products you might have. By saving on overheads like offices and front of house customer service representatives, they can pass the savings on to you by charging little to no fees and giving you a decent rate. In Australia, at the time of writing, the following five are my top picks for an online bank to use the barefoot investor accounts strategy with; however with the RBA changing the cash rate (and it just generally being so low at the moment), it is important to realise their rates are constantly changing (savings account rates just seem to be going down and down). You should keep an eye out online for any changes in interest rates and fee structures.

Be warned though – there are many banks out there that offer a short introductory periods of higher interest, but these quickly fizzle out and leave you with a paltry 1% or so. That is only going to assure you lose purchasing power through inflation and taxation! There are options for term deposits too, but I would steer clear of these as you don’t typically earn much more than these online savings accounts, and your money is locked up and can’t be used in an emergency – you might be better off using this for extra mortgage repayments (or putting it in your offset account), for investing, or contributing it to your super.

Typically banks will give you a good online rate and no fee accounts on a condition though; they want you to use them as transaction accounts, have your salary deposited into them or make a regular monthly contribution to your savings accounts. This is because the bank wants you as a customer (to potentially up sell loan products or insurance to) and then they also get to access and collect to your spending information which they can add to their consumer database to sell on to advertisers, researchers and investing firms.

This isn’t really a problem for most of us though, and these transaction accounts are some of the best ones I have found – ING charges no fees ever, and provides a great exchange rate for overseas purchases, Ubank wants at least $200 a month deposit to qualify for the higher interest rate, however Rams is the only one which will penalise you for withdrawing from your savings account. These terms and conditions are frequently changing though, so make sure to read the Product Disclosure Statement to keep abreast of any requirements

Barefoot investor buckets

These bank accounts can be used neatly to set up your barefoot investor buckets, and automate your splits (transfers) into your

  • Mojo account (Emergency fund)
  • Grow account (Long term wealth like Superannuation, Investment properties or Shares)
  • Blow account – Daily Expenses (recommended 60% or less of your total income)
  • Blow account – Splurge – 10% of your income on impulse spending
  • Blow account – Smile – 10% of your income to save for long term goals
  • Blow account – Fire extinguisher – 20% (or more) of your income directed to paying down debt – credit cards, personal loans, car loan and finally your mortgage, and then direct it into your Grow account to build your long term wealth).

Without any further adue, the following banks provide good website and app interfaces, low or zero fees, as well as a highly competitive rates among the other banks.

ING Bank

Barefoot investor bank accounts

I’ve been a personal customer of ING bank for over 5 years now, and to be honest, I couldn’t ask for a better bank. I use it conservatively (no credit cards for Captain FI just yet!) with just a couple of Orange Everyday accounts for my ‘barefoot buckets’ and a Savings maximiser for my emergency fund. I don’t think I have ever paid a cent in fees or ATM charges – and I even get a bit of interest paid out to me on the balance of my emergency fund (though it is not much at all!). This is a perfect bank for me, since I am frequently travelling the globe and need an easy way to access my cash without getting stung with hefty international transaction fees or ATM fees. ING Bank has actually saved me thousands in fees since I switched!

You can read my Full review of ING bank here.

Up Bank

Barefoot investor bank accounts

Up Bank is an innovative Australian digital bank that offers entirely digital, cloud based personal banking through the Up mobile application. Because of this, and their strong focus on technology and rapid development, they are often categorized as a ‘neobank”. With over 200,000 customers, Up bank is targeted at a millennial audience and has had two years of proven functionality with outstanding reviews, winning Up several industry rewards such as ‘Digital disruptor of the year’ and ‘Best digital bank’.

I will be using Up bank more and more for my personal uses (but I still use my ING account). I keep pressuring them to remove all ATM fees. When Up Bank can assure me they will remove all ATM and international transaction fees, I will happily make the full switch.

You can read my full review of Up Bank here.

86400 Smart Bank

Barefoot investor bank accounts

86400 is an Australian digital bank that launched in July 2019. It operates entirely via a mobile app, and there are no physical bank branches or web client. 86400 is very intuitive and easy to use, and focuses on simplifying clients banking, as well as using AI to help manage and reduce your bills, providing opportunities for you to save money on things like utilities, mortgages and other loans. This review will cover 86400 bank, how to create and use an account and the features you will get.


Barefoot investor bank accounts

I have had a U Bank account for going on 10 years now, and its been…. acceptable. These guys are the ‘no frills’ subsidiary or ‘low cost branding’ branch of NAB bank (think of them as being the NAB version of what Jetstar is to Qantas). They offer a very competitive interest rate on their online savings account, and have a very useful sweep functionality which can allow you to automatically move money from a transaction account into a savings account and vice versa, which is quite novel.

However, I will be brutally honest, the customer support is average, their IT system sucks and the user interface is very archaic – typical of a big 4 banking system, and the opposite of newer ‘neobanks’ like Up bank. I have also been locked out of funds for days at a time when their system goes down. When I tried to get support in person from an NAB bank branch, they wouldn’t help me. This could make a great account for sticking your Mojo (emergency) funds in to make it hard to get to unless absolutely necessary (and then keeping the linked debit card somewhere handy) but I just can’t see myself using them full time as a transaction account.

They also aggressively market online for home-loans and offer some pretty amazing rates – I’m sure you are all familiar with the green advertisement bars for U Bank popping up on Google Ads or banners all over various websites and social media pages. This is something that worries me – if a product is good enough, it shouldn’t really need to waste money advertising itself – should it?

ME Bank

Barefoot investor bank accounts

I’ll be honest here – I haven’t had much experience with Me Bank at all! I opened an account when it was competitive with ING bank and I had a significant emergency fund saved in cash ($80,000!) – However, I invested this money into a mix of shares and a deposit on a property and when I realized I was only keeping a $1000 emergency fund, suddenly it seemed like to much effort to have multiple online savings accounts. The 12 cents per month different in interest that I would be gaining over ING did not sway me and I didn’t want yet ANOTHER bank account I needed to keep track of, so I didn’t bother doing anymore with my account.

ME Bank, or Members Equity Bank, is actually owned by a conglomerate of 26 different Superannuation funds, which is really interesting. This includes AustralianSuperUniSuperCbusHESTA, and Hostplus. It actually used to be called ‘Super member home loans’, and has been around since 1994 where it has had a few mergers with other financial services organisations. They are also massive, managing over (AUD) $27 Billion worth of assets. They only have a few offices and follow the structure of most modern online banks, but still employ over 1800 people.

They offer competitive interest rates for online bank accounts, as well as home loans and other financial products.


Barefoot investor bank accounts

RAMS are actually a bit of a strange one to add to the list but bear with me. Whilst the company is actually better known as financial services or mortgage broker franchisee service, they also offer a ‘no frills’ online savings account called myRAMS. This is actually a subsidiary of Westpac banking corporation. I have found the MyRAMS saver account to have a competitive interest rate in the past, and so I had used this interchangeably with U Bank for my Mojo (emergency fund).

Of course, these days I run a pretty tight ship, and my finances are much leaner. I keep much less in cash, and consider a mortgage offset a much better place to have my traditional ’emergency fund’ because it saves me on interest, and interest savings are tax free – meaning a mortgage offset account is always going to blow an online savings account out of the water anyday!

This means I don’t use myRAMS anymore, but it was a very straightforward online account to use. I didn’t use a linked debit card or anything – purely a place to stash my cash, but these days my small Mojo stays with ING.

Frequently asked questions

Answers to frequently asked questions about the barefoot investor bank accounts

What bank accounts does the barefoot investor recommend?

The Barefoot investor recommends looking into the following banks: ING, Up Bank, Me Bank, 86400 Smartbank and Ubank.

What are the barefoot investor accounts?

The barefoot investor accounts are a set of 6 labelled accounts to manage your money with a proven cashflow strategy. There are;

  • Mojo account (Emergency fund – $2000 and then 3 months living expenses)
  • Grow account (Long term wealth like Superannuation, Investment properties or Shares)
  • Blow account – Daily Expenses (recommended 60% or less of your total income)
  • Blow account – Splurge – 10% of your income on impulse spending
  • Blow account – Smile – 10% of your income to save for long term goals
  • Blow account – Fire extinguisher – 20% (or more) of your income directed to paying down debt – credit cards, personal loans, car loan and finally your mortgage, and then direct it into your Grow account to build your long term wealth).

How many accounts to use Barefoot investor?

You will need six accounts, split across two different banks (to keep your emergency fund separate from your day to day finances).

What are the barefoot investor account names?

The Barefoot investor account names are Mojo (emergency fund), Grow (long term savings), Daily expenses, Splurge, Smile and Fire Extinguisher

Barefoot investor offset accounts?

A smart way to set up your Mojo or Grow accounts are to use offset accounts on your mortgage (PPOR). This way you earn more interest and it is tax free as compared to opening a high interest savings account.

How to set up the barefoot investor accounts?

Setting up the barefoot investor bank accounts is just a matter of opening two seperate bank account memberships. Once you have opened and verified these accounts, you create two savings accounts (Mojo and Grow) and four transaction accounts (Daily expenses, Splurge, Smile and Fire extinguisher) and label them as such. Then set your income splits appropriately.

Conclusion to Barefoot investor bank accounts

The Barefoot Investor gives readers very simple, actionable advice on setting up your personal banking using the ‘Barefoot Buckets’ technique. This is as simple as opening a no fee online savings account, directing your wage into it and then automating your income to be split between the various buckets – Your Blow accounts (Splurge, Smile and Daily Expenses), your Grow accounts (Superannuation, shares and investment properties), Your Fire Extinguisher account (for paying off debt) and of course your Mojo account (emergency fund).

ING Bank and Up Bank are two of the best online bank accounts to do this with, and both make it incredibly easy – these are the two banks I predominantly use these days. Other banks to consider looking into for setting up your barefoot investor accounts are U Bank, ME bank and RAMS – I have had accounts with these banks but I don’t really use them much anymore or have closed them as they were not as competitive as the former.

Remember though, the personal finance space is constantly evolving and changing in response to new technology and buisness demands, so keep abreast of whats going on by periodically conducting a financial health check each year or so, and looking into what the latest and greatest offers are.

eBusiness Institute

eBusiness Institute

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2 thoughts on “Barefoot Investor bank accounts: best banks in 2022

  1. Hey Captain,
    Been reading your blog for a few weeks now. Love your insights.

    What do you think of this so called 3% p.a. savings account. I’m 18 and just switched. Because I am under 21 the fees are waived. Am I missing something, is there some huge catch here. I looked into it quite a bit the only conditions are to use the card 5 times a month and make sure the savings account goes up by the end of the month and deposit $200, all things I can do.

    See link below
    Keen to hear your thoughts.

    1. Hey Daniel, I don’t think there are any catches here. This is a loss-leader promotion from Westpac to try and attract a younger demographic, which are being targeted by digital banks like Up or 86400 and the like. To be honest mate, this sounds like a good place to stash some cash for an emergency fund if you can’t put it on a home loan offset etc, 3% interest is better than the 1-2% I think I am getting in my banks. If you can meet the terms to qualify for the bonus interest then I’d say go for it. Just make sure to regularly check around and see if there are any better deals… of Course Westpac are hoping you don’t, and that you just blindly stay with them forever, and use their credit cards, home loans etc. Check what happens after you turn 21 too. Cheers

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