Xinja will cut the interest rate on its Stash savings account from 2.25 per cent to 1.8 per cent, after being forced to freeze the opening of new accounts to continue offering this rate to its existing customers.
“We have kept the rate at 2.25 percent despite successive rate cuts from the Reserve Bank, and we are probably the only bank to have done so,” said Eric Wilson, chief executive of Xinja. “We felt it was the right thing to do to protect our current customers rather than looking for new ones, and we did this by taking a break from opening new Stash accounts.
“However, this is a variable rate, and we cannot ignore two rate cuts from the Reserve Bank indefinitely. That said, our rate remains very competitive, and without the conditions that banks typically apply to higher interest rate accounts.
The neobank just began rolling out its new Stash account and was targeting $1 billion in deposits by the end of the year after historically low rates sparked a $200 million rush of funds into the bank. start-up in less than a month.
“The absence of new Stash accounts means there will be no increased costs for Xinja and we can protect the interest rate for people who already have a Stash account,” Wilson said in March. “…Faced with higher-than-expected deposit flows and an RBA rate cut, most banks would simply cut interest rates on deposits, thereby harming existing customers while seeking new ones. new ones. This is not the goal of Xinja.
Xinja still plans to launch a host of new products, including personal loans in August.
