Xinja Bank has reported that its Stash savings accounts have reached $200 million as at 14 February, after launching in January.
The bank previously reported inflows had exceeded $30 million in the first seven days of operation, while inflows hit $100 million within three weeks.
Xinja Bank chief executive and founder Eric Wilson said the demand demonstrates customers are seeking alternatives to traditional banks, particularly in a post-banking royal commission world.
“In the past, the big banks would tell you that customers were inert and lazy about their banking,” Mr Wilson said.
“We’ve all seen those surveys that show a very large number of people held on to the same bank account they had as a kid.
“But this really shows that Aussies will try something new, won’t be taken for granted on low interest rates, or sold a shiny new brand owned by an old bank. They want change and real competition.”
Stash has a 2.25 per cent interest rate, which is paid from the first dollar to $245,000, the bank said. The interest rate is calculated daily and paid monthly.
There is no condition that states customers must deposit a set amount each month or hold a minimum amount in the account. There is also no requirement to log a set number of transactions each month from the transaction account before customers can qualify for the savings account interest rate.
Xinja customers have an average of just over $10,000 in their Stash accounts. About half of the deposits have come from the four major banks.
The bank said its infrastructure has been built with lower-cost, cloud-based technology.
“Unlike the major banks, we aren’t spending money on legacy technology systems, high numbers of staff in branches or naming stadiums after ourselves,” Mr Wilson said.
The bank currently has more than 20,000 customers holding over 32,000 accounts.
The Australian Prudential Regulation Authority (APRA) granted Xinja its full bank licence in September 2019, after first being conceived in May 2017.
Plans for home lending
Speaking to Mortgage Business, Mr Wilson said Xinja Bank is targeting a fourth quarter, or October 2020 release, of a suite of home loan products, aimed at the residential market.
However, he did not specify the number of products that would be available in the suite.
The neobank had previously stated it had plans to add lending products in the first quarter of 2020, including home loans.
The bank is aiming to design an application process that is 100 per cent digital, which would offer conditional approval in minutes rather than hours or days.
“There will be a big focus on paying the home loan off as soon as possible,” Mr Wilson said.
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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.