Neobanks 86 400, Up and Volt Bank cut savings account rates
The fallout from the March Reserve Bank cut has finally trickled down to neobank savings offers, with three of Australia’s digital banks reducing their respective rates by 0.25% in the past few days.
86 400 was the first to move last Friday, cutting the maximum interest rate on their Save Account by 25 basis points from 2.25% to 2.00%. That maximum rate is available on balances up to $300,000 for borrowers who deposit at least $1,000 a month into either an 86 400 Save or Pay account.
The move also followed 86 400’s decision to cut their variable home loan interest rates by the full 25 basis point RBA cut earlier in the month.
Volt Bank was the next to follow on Saturday, passing on a 25 basis point cut to savers with a Volt Savings Account. The move means the maximum rate available on balances of up to $245,000 has dropped from 2.15% to 1.90%, though there are no requirements attached.
“We are acutely aware of the need for the Australian public to trust neobanks to do the right thing for our customers,” said Volt Bank CEO and Co-Founder, Steve Weston, in a statement released on Friday
“This includes building a viable and financially sustainable business over the longer-term. In this endeavour, the responsible move right now is to cut our rate,” concluded Mr. Weston.”
Melbourne-based Up was the last of the neobanks to amend its savings rate, announcing a 25 basis point cut to the maximum interest rate on the Saver Account which now sits at 2.00% on balances of up to $50,000.
Savers will also need to complete five card transactions each month in order to hit that maximum rate.
Australia’s other neobank, Xinja, had already frozen the 2.25% maximum rate available on the Xinja Stash account in response to the March RBA cut.
However, in a surprising move, the bank also put a pause on new savings account customers, citing costs associated with falling interest rates and a desire to maintain rates for existing customers.
RELATED: Why neobanks offer better savings rates than the big four banks
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