Sydney-based neobank Xinja Bank will cut the ongoing interest rate on its ‘Stash’ savings account from 2.25% to 1.80% on Monday, May 11.
The 45 basis point cut is the first rate reduction Xinja will make to the account since it hit the market in January, but according to Xinja CEO and Founder, Eric Wilson, it is a move the bank has to make following the two recent Reserve Bank cuts.
"We held the rate at 2.25% despite successive rate cuts from the Reserve Bank, and we are probably the only bank to have done that,” Wilson said.
"We thought it was the right thing to do to protect our current customers rather than chasing new ones, and we achieved it through hitting a pause on opening any new Stash accounts.”
"However, it is a variable rate, and we can’t ignore two Reserve Bank rate cuts indefinitely. That said, our rate remains very competitive, and without conditions that banks typically apply to higher interest rate accounts.”
The rate change will only affect existing customers at the moment, as the Stash account remains temporarily closed to new customers.
While there’s no set date for a re-launch of the account, according to the Xinja website: “Stash is likely to be open again for new accounts mid-year but this is being monitored ongoing.”
However, the 2020 Mozo Experts Choice Award winning Xinja Bank Account is available to new customers.
Before its withdrawal from the broader market, the Stash account not only featured the highest ‘no strings attached’ savings account rate in the Mozo database, but one of the highest overall ongoing rates.
According to a recent savings account snapshot, the average ongoing savings rate in the Mozo database has dropped to just 0.75%, driven down by a flurry of rate reductions in response to the two consecutive RBA cuts in March.
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