Australia's Lowest Rated Banks: Who Has the Worst Bank Rating?

Key Points: What You Need to Know About Australia's Worst Rated Banks

• Banks get rated badly for poor customer service, high fees, and digital issues.
• Online reviews and official rating agencies reveal which banks struggle most.
• Australia's biggest banks aren't always the best rated—smaller players often do better.
• It's smart to check bank ratings before picking where to put your money.
• You can switch banks easily if you're fed up with your current one.

Direct Answer: The Bank With the Worst Rating in Australia Right Now

Alright, if you just want the no-nonsense answer—according to recent data in August 2025, Westpac currently holds the spot as the worst bank rating among Australia’s major banks. This is based on a mix of customer feedback on ProductReview.com.au (where it’s sitting at around 1.4 out of 5 from 5,000+ reviews), complaints tallies from the Australian Financial Complaints Authority, and satisfaction surveys like Canstar and RFi Group’s tracking study. Most complaints are about clunky digital banking, slow responses, and annoying fees. Runner-ups in the low-rating club are NAB and ANZ, but Westpac has a clear lead in customer grumpiness this year.

Behind the Curtain: Why Do People Hate Certain Banks?

Ever find yourself yelling at your phone because your bank app just froze again? Yep, you’re not alone. One of the top reasons Aussie banks cop flak is bad digital experiences. In a 2025 independent survey, over 63% of Australians said that frustrating online banking is a dealbreaker. Westpac has annoyed plenty with unexpected outages and awkward app updates—one update in March killed basic transfers for hours, sparking a Twitter meltdown.

Fees are another source of rage. Hidden charges, costly ATM withdrawals, or a random $5 account keeping fee—people hate surprises, especially when their salary is already stretched. In the case of Westpac, stories of being hit with fees after an account was supposed to be closed have flooded review platforms. It’s enough to make anyone shop around.

Then there’s plain old customer service. Try calling during a busy time and be prepared for a 45-minute hold (that’s not a joke; several reviewers clocked it). Some even joke about growing grey hairs before a bank rep picks up. Face-to-face service at branches? With closures everywhere, you’re sometimes dealing with an office that’s only open three hours a day. No wonder people are frustrated.

But how does a bank get a “bad” rating, exactly? Platforms like Canstar, RateCity, Finder, and ProductReview.com.au all let actual customers rate their bank each year. They focus on trust, fees, tech, customer service, and how easy it is to fix stuff. The financial complaints authority also publishes reports showing which banks have the most issues that end up as formal cases (hint: Westpac and NAB seem to take turns competing for that top spot). So, it’s not just one dude having a bad day—these are real trends driven by thousands of voices.

How to Spot a Bad Bank Before You Get Burned

Picking a bank shouldn’t feel like Russian roulette, but let’s face it—most of us don’t bother researching until something goes wrong. If you want to avoid ending up in a banking horror story, watch for these red flags:

• Low star ratings anywhere you look. If a bank can’t crack 2 stars on Google or ProductReview and the comments are angry, something’s up.
• A track record of IT crashes. Search the bank’s name plus “outage” and see what comes up. You’ll get a sense real fast.
• Fee confusion. If the bank’s website buries its fees in pages of fine print, expect surprises.
• Tons of unresolved complaints with AFCA, the complaints authority. They publish this stuff quarterly, so it’s not a mystery.
• Poor accessibility. If you can’t get hold of a real human, or the branch is never open, that’s a warning sign.

Are Smaller Banks and Neobanks Actually Any Better?

So, should you jump ship to a neobank or one of the smaller local options? Good question. Some Aussies have found digital banks like Up Bank or 86 400 offer quicker customer service (think live chat responses in 60 seconds—not 60 minutes), better savings rates, and simple no-fee accounts. Their apps are slick, too. Canstar’s 2025 customer satisfaction report put Up Bank at 4.7 stars, which dwarfs Westpac’s gloomy score. But it’s not all sunshine—if you love walking into a branch and chatting to real people, smaller players might not have a branch at all.

Some feel that smaller mutual banks, such as Newcastle Permanent or Heritage Bank, offer a more personal touch. Their size means they’re less likely to act like a money-printing machine and more likely to treat you as a person. These guys reopened branches in rural towns where majors had pulled out, which genuinely helped locals. But be ready for limited ATM access or strict eligibility requirements.

When you compare side by side, Australia’s ‘Big Four’ (Commonwealth, Westpac, NAB, ANZ) still hold most of the national market. But all four regularly score three stars or less from everyday customers. It’s a bit wild when you think about how much money they rake in. Still, keep in mind that being “worst” is always changing. In 2022, ANZ was getting hammered; this year, it’s Westpac’s turn. The moral of the story? Always check for recent ratings and read recent stories, not just out-of-date articles or ads.

Simple Steps to Escape a Terrible Bank and Find a Better Fit

If your bank isn’t cutting it, you don’t have to accept second-rate service or sneaky fees. Here’s how to bail out, quick and easy:

1. Do a side-by-side comparison using sites like Canstar or Finder. Look for interest rates, fees, app reviews, and service hours.
2. Open your new bank account online—almost all the smaller banks and neobanks promise signup in under 10 minutes. Some even use digital ID checks (no paperwork headaches!).
3. Move your direct debits and salary payments. Many banks now have a “switch kit” that auto-updates your regular bills. If not, the ATO has a helpful checklist for switching banks safely.
4. Make sure all your money lands safely in the new spot, and only then close your old account. Take screenshots of everything just in case—you never want to chase missing funds.
5. Test out your new setup. Use the app, call the helpline (even if you don’t really need to) and see if their support matches their hype.

We’ve all got busy lives—my dog Zeus pretty much demands half my weekend just to keep him happy—so you don’t want to waste spare time fixing someone else’s mess. Do your future self a favor and pick a bank that leaves you with more peace of mind and less paperwork. And if anything changes, don’t be afraid to hit that eject button. Your money, your rules.