Get Stashing! 💰 With a 2.25% interest rate

@QuirkyXinja, @XinjaMaker, @brett Thank you for your responses.

@brett Looking back through this topic I see that you have actively advocated for Stash accounts with some type of direct debit facility. I support your position wholeheartedly.

@QuirkyXinja, a system that provides a ‘bills Stash’ or preferably multiple such Stash accounts, that allows for direct debits, or scheduled payments, would be great. I could understand if the interest rate for the ‘bills Stash’ was different than that for a normal Stash, provided it was not some useless percentage that did nothing to encourage financial planning. As an example only, assuming that interest is paid into the account at the beginning of the current month, I would suggest something like: 0% if more than 3 withdrawals were made in the previous month (i.e. the account is effectively treated as being transactional); 0.5% if 3 or less withdrawals were made during the previous month; 0.75% if there was no withdrawal in the previous month; 1.5% if there was no withdrawal in the previous two months; full interest (currently 2.25%) if there is no withdrawal in the previous three months. I think this gives a graduated incentive to clients not to withdraw from a ‘bills Stash’ account on a regular basis, but at the same time reduces the risk to the bank if those clients need to do so. Of course this only works if the client can set up multiple ‘bill Stash’ accounts, one for each direct deposit or scheduled payment. EFTPOS and ad hoc payments would continue to only be possible from the clients transactional account.

@XinjaMaker Please also refer to my reply to @QuirkyXinja earlier in this reply. I am not personally aware of any high interest savings account that allow DDs. This can be viewed either as (i) a reason not to introduce them or (ii) an opportunity to introduce them.

The two banks with which I am most familiar are ING and UP
Both banks allow users to create multiple savings accounts. ING allows clients to automatically schedule a transfer of funds from a savings accounts to a transactional account; however, they pay their highest interest rate on only one of those savings accounts. Direct deposits and scheduled payments have to be done from your transactional account. UP pays their maximum interest rate on as many savings accounts as you want to set up; however, at this stage I believe you can only manually transfer funds between a savings account and a transaction account. Direct deposits and scheduled payments have to be done from your transactional account.

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Thanks for the reply Eric @XinjaMaker

I’m not sure that BrettStash would resonate with the market, but I’d be honored all the same :sweat_smile:

Like you say, you won’t find another savings account at 2.25% that is full featured… hence why its completely acceptable that the account I’m proposing has a much lower rate.

For inspiration please check out the product I currently use with my existing bank. I have two - one for bills, and a second one for mortgage payments. Offers a lower 0.85% rate and allows direct debits, direct credits and BPay.
https://bankvic.com.au/savings/easyinvest-s7

  • I’m not promoting this bank or suggesting anyone open an account based on my post.

Cheers,

Brett

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Was thinking about the ‘bills stash’ concept

Wouldn’t an elegant solution be to pay the same interest rate as the main stash, but limit interest bearing balances to say $10-20k?

This would encourage people to use as intended while providing some protection from misuse.

I would personally prefer this to a lower rate on unlimited deposits.

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@Azzy I think they’re trying to keep the new Stash account simple, which is probably a good thing. It’s marketed as no strings, no BS.

Your idea isn’t bad, it just complicates the existing product a little.

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Yeah, I agree that is does complicate things and leave Xinja exposed from a marketing perspective.

I’m just trying to find a workable middle ground given the reluctance to allow DD/Bpay from Stash.

If no BS was truly a core value, then they would just allow it from the main stash

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I’d love to hear the in-the-works solution that @XinjaMaker mentioned.

To me, the best solution to this is to keep the transaction and Stash accounts separate, allowing DD/BPay/Mastercard only from the transaction account. This retains the separation of concerns for the two accounts. However, there should be much more interconnectedness between the two accounts, and by that I mean: automation.

The functionality of this should be two-fold.

  1. Similar to UBank’s “Live Sweep” feature, if a DD/BPay/ATM withdrawal request comes through on the transaction account and there is insufficient balance on the transaction account and sufficient balance in the Stash, the required funds should be automatically transferred from the Stash to the transaction account to pay the bill/DD/ATM withdrawal. This way bills are paid from the transaction account without needing to manually transfer money across, achieving psuedo-DD/BPay/ATM functionality on the Stash account without actually having it. No need for a separate “bills Stash”, and the transaction account balance can be kept at $0. You also retain the inability to make MasterCard purchases directly from your Stash, keeping that “moment of mindfulness” when you have to manually transfer money out of your Stash to make a non-bill purchase.

  2. With current banks, you can schedule a transfer between your transaction and savings account for a certain date, but that’s the extent of the functionality. If I wanted to automate a bill payment for $x, I couldn’t schedule a $x transfer from savings to transaction and a $x BPay payment from transaction for the same date (the due date), because the finest timeframe you can schedule a transfer for is a whole day. Scheduled transfers will occur at an arbitrary time any time on the scheduled day, leading to the possibility that the BPay payment occurs before the funds are transferred into the transaction account from savings. This is just silly.
    What we need is the ability to have full control over automated transfers between transaction account and Stash: the ability to set the date AND TIME of the transfer, so we can schedule transactions in the correct order, and the ability to access the total available balance in each account as a variable (e.g. $bal). This way, you could schedule a daily transfer at 11:59PM (just before interest is calculated!) of $bal from transaction account into Stash, earning full interest, then schedule a daily transfer of whatever each user thinks should be their daily budgeted limit for spending (e.g. $200) from Stash to transactions at 12:01AM. If a MasterCard purchase needs to be made that’s more than that amount, this system retains the need to manually transfer money out of your Stash and make yourself feel slightly guilty.

To me that’s the best of both worlds. I think it’s silly that we have two accounts that we can freely transfer between, effectively having one combined account, yet all transfers between them have to be done manually.

And as an added bonus, the above functionality completely supercedes the “Stash round-up” feature. No point automatically saving <$5 every purchase (or whatever the threshold is) when you can automate your accounts to automatically save every last cent of excess.

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Hi @dysprosium and welcome!!! :ninja_emojis_pink_03: @brett, @James1 and @Azzy - great product being designed here. Funny you mention the UBank sweep function - I was looking at it yesterday and it reminded me of the 90s when you could set your savings account (talking about a British bank but I’m sure it was the same here?) to automatically top up your transaction account to prevent you going into overdraft, so no interest charged. Set and forget. Loved it…just took away the anxiety. As to bills account, and multi-stash and how they work etc. we are looking as @XinjaMaker said at all these options as we speak…we are likely to make changes to the roadmap shortly as we firm up the plan.

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Thanks for the update Cam @CaptainXinja. Definitely sounds like positive news.

For the record, I’m all for automatic scheduled transactions (or even sweeps) but ideally I’d only want that ‘from’ a transaction account and ‘to’ a savings account, not the other way around i.e. salary gets deposited into transaction account, and then $x automatically goes into Stash, $x goes into Savings (Bills account), and $x goes into other Savings (mortgage/rent).

The idea of money automatically coming ‘out’ of savings to top up a transaction account kind of defeats the purpose of limiting that account only to weekly, fortnightly discretionary spend. It would remove that ‘moment of mindfulness’ that @XinjaMaker mentioned in his post :point_up: and enforces bad spending habits.

Thanks again for the update and look forward to hearing more.

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So was there any consensus on the issue of whether to eventually support multiple stashes, for multiple savings goals, or have a single stash, with virtual buckets dividing up your total savings into amounts allocated to various savings goals?

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Agree with you and @XinjaMaker - the back and forth I liked back in the day to prevent unintended overdrafts but that is NOT the right direction! The main thing is to earmark/ring fence the money to make sure you’re left with your disposable income only in the transaction account, and help people automate the savings.

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Hi @David_Langham - multiple stashes will be virtual accounts - so one Stash account and then virtual buckets within it. Then a bills account from which you can make bill payments directly. :ninja_emojis_pink_03:

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Could the bill account be something like “I pay X bill on Y day of the month”, “I pay X bill fortnightly on Y day”, “Car rego is next due on 2020-07-02” and so on, and then it automatically pulls the required amounts out of your pay on whatever schedule that is, plus a “leave this here in case more gets pulled” type thing?
That’s how I used to bank anyway :joy:
The advantages then are that Xinja can know roughly in advance how much is going to be in that account and when, and so could offer a customised interest rate accordingly…
So say I set that I’d like 1.5 fortnight’s rent left in the account just in case, and it knows my bills it might calculate an interest rate of 1.45% (completely arbitrary) and automatically pull out of my pay the amount required to cover these bills.

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Awesome. Hopefully we can have multiple bills accounts? I like to separate mortgage from other bills. Mortgage in, mortgage out without me having to worry. I ‘could’ leave that with my current bank, but would prefer not to of course.

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It sounds like people didn’t properly understand what I posted - my proposal already addresses all the downfalls everyone mentioned. Only Direct Debit/BPay/possibly ATM requests would trigger an automatic sweep from Stash to transaction (i.e. bills ONLY). It doesn’t trigger on any discretionary spending, RETAINING the “moment of mindfulness” as you will still need to manually move money across if you don’t have enough for a MasterCard purchase.

Then, with the ability to have full control over automated transfers between the accounts, you can set whatever limits to your spending you want for your discretionary spending - ensuring it’s only disposable income left in the transaction account.

For example: let’s say you budget your disposable income to $1000/week. You would be able to schedule a transfer of all the funds left in your transaction account into Stash for every Sunday 11:59PM. Interest is calculated on 100% of your money at midnight. Then, for every Monday 12:01AM, you schedule a transfer for $1000 from Stash into transaction. It gets spent over the week, but every day at 11:59PM you schedule a transfer of the whole transaction balance into Stash (e.g. let’s say you have $945 left), it gets counted for interest at midnight, then the same amount back out ($945) at 12:01AM every day. So you are never able to spend more than $1000 a week on discretionary spending without needing to manually transfer money across (“moment of mindfulness”), but if it’s a Direct Debit/scheduled BPay (i.e. a BILL ONLY), it will go through regardless of your transaction account balance.

The best part is it’s fully customisable for each person. If you budget daily, weekly, fortnightly or monthly you could schedule it how you want and for how much you want.

To me this is the most elegant solution because it offers a superset of functionality to everything I’ve seen requested on this forum (Stash you can pay bills out of, Stash round up, “drip feed” money from Stash to transaction, scheduled bill payments), while keeping it super simple. One transaction account for all money out, one Stash for all money in, with no conditions about getting the highest interest rate. You earn interest on 100% of your money in both accounts.

Am I wrong about it being the simplest way to achieve a superset of everything everyone wants?

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The point is that Stash is exactly that - a place to Stash away savings for a particular goal or rainy day. Having discretionary spend and bills coming out of it is counter productive to good money management, which is something Xinja wants to promote. A separate bills account solves that issue and teaches good habits by having that money in a separate silo. Teaches people to budget effectively.

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Hi there - we’ll start with 1 bills account - whether we move onto more depends on how it’s received AND the facilities around it. But hear what you are saying.

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The key thing reading this is that people want to be able to customise it to earn maximum interest. And they want their way automated. One of the things that will be relevant is our identifying regular payments and asking people if they are bills they want to pay from an interest earning bills account and suggesting a minimum amount to hold in it from payday to cover what we can see. So if they don’t do their own budget (most people don’t) it starts to be come obvious - by the time they see the amounts moved out for stash and bills, they can see what they’ve got left and whether they can survive on it! The scheduled transfers is a critical piece we’re prioritising now.

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Thanks @CaptainXinja - from your comments I think I finally understand why there’s some disagreement/misunderstanding. I have always budgeted and tracked my income and expenditure, so to me how you silo your money is irrelevant - all of it is your money either way, so it might as well all sit in the high-interest account to earn maximal interest on it until it’s needed as planned. I’ve always saved 100% of my income as soon as I’ve received it, and then only made any necessary expenditure out of savings.

I’ve never considered that people might do it the opposite way; spend from their paycheck and only save anything left over. You miss out on a little bit of interest every day that way, but I suppose it could be useful to someone who isn’t as on top of their finances. Just goes to show how different saving habits can be.

If I could control the exact time - not just the date - of a scheduled or recurring payment, then I could achieve all the automation I’m looking for by myself, so I’m glad that you’re prioritising it. Old-school banks do scheduled transfers at an arbitrary time on the scheduled date due to legacy systems, so the possibility to be able to automate my finances with much finer control was the number one thing I was excited about when I heard about neobanks that aren’t bound by legacy systems (it’s 2020 and I can’t even properly automate a bank transfer?).

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I suppose the only issue with automating transfers in and out of the high interest stash account is that the reason ‘Stash’ is that high an interest rate is because Xinja want you to leave it there :blush:
Otherwise I’m completely on board with two accounts and timing transfers.
As a note, Xinja doesn’t prevent Tasker+AutoInput from working, so you can kinda achieve the same thing right now if you’d like (I have a setup that runs on my pay to transfer everything as I like it :grin:)

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Billstash would be awesome. I just gave up on ING and went back to my old bank because I didn’t feel that 2 hours of managing transfers and incorrect transfers was worth $2 in interest. Direct debits and a MasterCard are a must for this service. Seems such a waste to transfer thousands of dollars into a bills account if it’s not going to earn interest (getting paid monthly sucks).

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