Powered by MOMENTUM MEDIA
subscribe to our newsletter

Xinja suspends uptake of savings product

The neobank has ceased offering its savings product to new customers in a bid to ease funding pressures and preserve its savings rate.

Xinja Bank has suspended its Stash saving account offering to new customers, in order to maintain its 2.25 per cent rate for existing customers in light of the latest cut to the cash rate from the Reserve Bank of Australia (RBA) and “unprecedented inflows”.

“As always, Xinja wants to break the traditional banking model,” Xinja Bank chief executive and founder Eric Wilson said.

“When faced with higher than expected deposit flows, and an RBA rate cut, most banks would just drop deposit interest rates, hurting existing customers while chasing new ones. That’s not what Xinja is about.

“We are holding our rate steady, at 2.25 per cent, but hitting the pause button on customers opening Stash accounts.”

Advertisement
Advertisement

Mr Wilson insisted that the bank would not cut savings rates in the near term but concede that managing margins have become increasingly difficult in the absence of a fully operational lending business.  

“We won’t drop the rate on Stash accounts now, just because the RBA has dropped the cash rate and demand is much higher than expected,” he said.

"But there are three things we have to balance: the RBA rate cut makes it more expensive for Xinja to hold deposits at the same rate before the launch of our lending [program].

“Managing those costs as a new bank in a way that cares about existing customers means pushing the pause button on opening new Stash accounts for a while.

“When we make new Stash accounts available again, new customers who have only a transaction account will get first access.

PROMOTED CONTENT


Xinja’s announcement follows the launch of its capital raising last week, designed to fund its lending ambitions.  

To date, Xinja has raised around $70 million total, from Australian and offshore investors, through its series A, B, C and the first 40 per cent of series D funding rounds.

This included two equity crowdfunding rounds, the first held in January 2018, and the second in January 2019, both of which were also in partnership with Equitise.

[Related: Xinja launches capital raise to fund lending ambitions]

Xinja suspends uptake of savings product
Xinja Bank
mortgagebusiness

Latest News

An industry poll has been launched to understand the key issues impacting mortgage and finance industry professionals leading up to the 2022...

The mutual bank has confirmed that it has reached a milestone figure of $10 billion in assets. ...

The financial complaints body has recruited a new leader for its compliance and monitoring team. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think APRA's bank buffer changes will see more borrowers use non-banks?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.