Sydney-based neobank 86 400 has announced the addition of a number of new features to its Save Account this morning.
Customers will now be able to open up to three separate 86 400 Save Accounts to diversify their savings structure, all of which will be able to receive the maximum interest rate of 2.25% which is currently the joint highest ongoing savings bonus rate in the Mozo database.
Meanwhile, 86 400 has also lifted the maximum deposit limit available with the account to $300,000 - an increase from the existing $100,000 cap.
In order to hit the maximum 2.25% rate on the Save Account, savers will need to deposit at least $1,000 into an 86 400 Save or Pay Account each month, otherwise the 0.40% base rate will apply.
According to the digital bank, the vast majority of 86 400 customers are hitting this deposit requirement, with 90% of savings balances earning the bonus rate each month.
86 400 also called out the lack of competition being offered by Australia’s major banks, suggesting that Australians are missing out on around $240 a year in interest on the average savings balances with one of the Big Four.
“Australians are getting a raw deal from the Big Four. Rather than acting in the interest of customers, the Big Four continue to slug their customers with as many fees as possible and pay them low interest on their savings,” said 86 400 CEO, Robert Bell.
“We’ve always said that competition in this space is great news for Australia. Our new savings product gives Australians the opportunity to get more from their money with market-leading interest rates, and flexibility on how they arrange their savings. Plus we’ll actively help them to earn the bonus interest rate each month. This goes well beyond what the Big Four are doing.”
Neobanks vs the Big Four
So how exactly do 86 400 and Australia’s other neobanks stack up against the likes of ANZ, Commonwealth Bank, NAB and Westpac when it comes to savings accounts?
According to figures from the Mozo database, the average ongoing savings account bonus rate offered by the Big Four banks is currently 1.41% with the Westpac Life Account the highest among them at 1.65%.
Conversely, neobanks 86 400, Up, Volt Bank and Xinja currently occupy the four top spots in the Mozo database when it comes to highest ongoing savings account rates.
With a ‘no strings attached’ ongoing rate of 2.25%, the newly released Xinja Stash Account is the equal highest ongoing savings rate in our database - on par with the 2.25% rate offered with the Up Saver Account (minimum five card purchases a month) and the 86 400 Save Account.
Volt Bank’s Savings Account, which is currently in the process of being rolled out, is sitting just behind its counterparts at 2.15%, though like the Xinja account, Volt customers won’t need to meet any requirements in order to get the rate.
“Expectations about the competition neobanks might bring to the Australian market was high during their development phase, and they’ve really delivered in respect to savings accounts,” said Mozo Banking Expert, Peter Marshall.
“At present the average ongoing savings rate in our database is hovering around 0.98%, which just goes to show the gulf between some of the traditional players and these neobanks.”