Australia’s first new digital bank has launched a saving account but not a transaction account. Given Xinja has a transaction account but no saving account maybe you should get together with Volt and someone like Athena then you would have transaction accounts, savings accounts and home loans ? Just a thought.
Xinja have “stash” coming
Just taken a look at their website which talks about this new savings product. It’s a good rate, with none of the condtions that every other bank has. Pretty compelling.
I am anticipating that Xinja would be planning something similar in terms of rate (offer 0.05% more??), conditions and messaging.
It’ll be interesting to see what everybody comes up with. More out of curiosity, chasing an extra 0.10% is a bit silly unless you have $100 000+ in an account to play with. 86400 have launched with 2.25% if you deposit $1000 monthly, Volt have countered with 2.15% with no conditions.
I swear Up started with 2.50% but have cut it back to 2.25% after seeing what the competition have done and their condition is 5 transactions per month with no minimum deposit requirement. One thing I noticed about Up, they only give the rate up to a total of $50 000 whereas all the others apply their rate on balances up to $250 000. give or take.
As I said, fractions of a percent in interest rates tend to only become a big deal when you get a significant sum in your savings. For Xinja, I think what will be attractive, will be their conditions, or lack thereof, needed to achieve their maximum savings rate.
That’s a really interesting summary, thanks @David_Langham. I had seen some of these things, but not put them all together in this way. My extra 0.05% was just a cheeky thing to be more than Volt.
Having seen all of your research, something around 1.95% to 2.5% seems plausible - realisticially, it’s going to have to be in line with other higher % products across the whole sector.
The % rate is also a little bit about the marketing, as fractions of % of a small-modest savings account, as you say, are not particular here nor there but as a brand new product you need something to gain attention, but in a sustainable, reasonable way.
I think you are right about the conditions will be key and I think the inference from earlier comments is that it’s likely to be a no (or minimal) conditions savings product, which will be good.
I am also expect other interesting little features over time - tiers / bonuses / incentives etc. but again, in a way that leaves out or minimises conditions, apart from ones that increase reasons or opportunites to save. I would not be completely surprised to see some element of the product where you could get a really really high rate - “Save More. Earn More.” or even having the messaging as like an investment - “Invest More. Get More Back.” or ways that you can spend the money in interesting ways… say… you can share part of your interest with another Xinja account holder. Just musing…
Interesting that Volt are allowing customers to transact from Savings accounts using ‘pay anyone’ to a bsb/account. BPay coming early 2020 presumably also from Savings.
For some stupid reason Xinja is not going to allow that from Stash. I really don’t understand the logic.
The teal card that Volt are offering on launch is a huge improvement on the horrible pink we’ve got.
Still a lot of work to do Xinja. Behind the eight ball not just on product offerings, but also policy.
@brett not really when you think about it. They have no choice but to allow transfers in and out because otherwise it would be impossible to fund. Remember it a saving account only - no transaction account or card. BPay is harder than people think because it is owned by the big four banks - that might be why Xinja don’t have yet ( nor do 86400 or Volt and from memory it even took Bendigo’s UP more than a year I think…
Ps I wasn’t serious about volt and Xinja getting together but would be cautious of claims that features/products are only weeks away. Track records today’s suggest months.
If anyone has early access to Volt yet would love to know what the experience is like compared to Xinja.
Anyway hoping both do really well.
@T_Armer To clarify, Xinja are allowing external transactions ‘into’ stash, but not out of it. So in order to pay a bill or pay anything out of stash - even for example to the the actual thing you were saving for - you will first need to do an internal transfer to your transaction bank account and transact from there.
I’m sorry, that’s just an inconvenience and I challenge you to name one other bank that operates in that way…I don’t think you will. Yes, you don’t need a debit card for your savings accounts, but you absolutely need to be able to transact from it.
That was my point anyway, Volt are allowing that normal behaviour, Xinja have made a point in the t’s & c’s that they are not. Very strange decision that will lose customers I guarantee it.
I bank with ING, currently, and they do not allow transactions from the savings maximiser account. I know someone who banks with ME and it’s the same, there. As far as I know, no bank allows transactions from their savings account, that’s the reason they seperate everyday transaction accounts and savings accounts. One has interest for saving, the other has features for spending.
@David_Langham My banks (BankVic and Qudos) have always allowed Direct Debits/Credits and BPay from any account, even savings. My mortgage is with ING where I can also BPay from its redraw facility.
I figured this was pretty standard. For me, paying bills isn’t an everyday transaction so I never pay them out of an everyday account. Everyday account is just that, everyday transactions, while bills come out of a second savings account that is used just for that purpose.
Forcing people to have to pay bills out of an everyday transaction account is just bad banking practice in my opinion.
It’s all about freedom.
@brett pretty sure you are in the minority there sorry. The way I see it is that a savings account is for, well, saving money and not sending it anywhere, whereas a transaction account is for transactions…
When I was with Westpac you couldn’t do transactions from savings except to a transaction account, and from memory talking with previous housemates CommBank is the same.
In fact, I’d consider it a disservice to allow transactions straight out of a savings account - that knowledge would be tempting for some people and having to make the extra transfer into their transaction account might give them pause to think and improve their financial management…
I currently still do most of my banking with one of the large banks - I can and can’t do certain things with their different account offerings. Some accounts I can transact freely into and out of, some accounts I either don’t have the option or the “penalty” of doing so is so great that it’s not worth it. That’s what’s available to me if I choose to continue using their services.
Xinja is one of many banks and they are offering any number of products based on their business objectives. If you want more “freedom”, maybe Xinja is not the right set of banking services for you.
ps. I do really like the Volt card - very visually appealing (to me).
Just to let you all know, I am happily banking with all the freedom I need with my current bank, so if Xinja doesn’t deliver, well I’ve lost nothing - apart from my investment because I think it’s plain dumb to lock an account down like that.
Spoken to other friends who are also happily transacting out of a savings account (even with CBA) so I know I’m definitely not a minority.
Transaction accounts are designed for daily, in store and online spending, hence the debit card. Other accounts are for saving and paying bills - don’t get mixed up by the semantics, ‘savings’ is just a word, at the end of the day savings account products are just another account with money in it for a purpose. In a lot of cases that purpose is to pay household expenses, in other cases it’s to save.
I’m with CBA and I am not able to do it out of my savings account.
I run 3 accounts - splurge (transaction) aka everyday spending - household (transaction) aka bills and rainy day (savings), savings only.
I really want to see Xinja do the round up option that automatically goes from my transactions accounts to my savings.
The $2 challenge this year has saved me over $1,000 with almost no effort.
Up launched with 2.75%. They reduced it due to the RBA lowering the cash interest rate. First to 2.5%, and now 2.25%.
86 400 are the same. They launched with 2.5% and now offer 2.25%
86 400 will pay that rate up to $100,000.
If the cash rate does not change, their interest rates won’t change.
You’re not restricted to only having one savings account, so using those accounts in tandem if you have more than $50,000 in savings would work well, as you don’t pay fees for either.
There’s also nothing stopping you from transferring $1000 out of the 86 400 account and straight back in to hit the minimum deposit required to activate the rate.
I’d personally put all my money in whoever has the highest interest rate, so that extra 0.1% does make a difference for some people. Anything above their maximum balance can go to whoever has the next highest rate.
I’m also not going to leave my money in a low interest account in another bank while waiting for this Stash account to finally launch.