Neobank Xinja is once again cutting the interest rate on its Stash account from Wednesday, as well as slashing the amount of money you can earn interest on by $95,000.
It’s the fourth interest rate cut in the nine months since Stash was launched in a blaze of publicity as “Australia’s best savings account”, paying 2.25% interest on up to a $245,000 cap.
Less than two months later, as Covid-19 hit and the RBA cut the official cash rate by 25 points to 0.5%, Xinja put a freeze on anyone opening a Stash account and in May, cut the interest rate by 0.45% to 1.8%. It cut it again to 1.65% following the second RBA 25 point rate reduction and last week quietly revealed a fourth cut to 1.5% from October 14.
But the even bigger hit for the neobank’s early customers who dropped up to the $245,000 limit into their Stash account is that they’ll lose interest payments on $95,000 of that figure, with Xinja reducing the cap on the total amount that you can earn interest on to $150,000.
Rival Volt now offers 1.45% interest on up to $245,000. 86 400 offers up to 1.35% – base rate of 0.10% and bonus rate of 1.25% – if certain conditions are met.
In March, following a $50 million crowdfunding round, Xinja announced a $433 million investment over two years from Abu Dhabi investment company Emirates’ World Investments, which tipped in $160 million immediately, with the remaining A$273 million available to be drawn down in multiple tranches to fund Xinja’s growth over the next two years.
On Sunday in a blog post, the company’s customer experience director, Camilla Cooke, announced the bank was also closing the Trello roadmap it had opened for public scrutiny in July 2019
“Setting dates means if you miss them, you disappoint,” she wrote.
“We don’t want to go on setting expectations that we might not meet. Circumstances and direction can change. We want to keep some information to ourselves for competitive reasons. And we are also moving towards adding products to the ecosystem and away from multiple bank account features, so the format of the roadmap based on rapid iteration of one product, is too micro and not really relevant.”
Cooke said Xinja is launching Dabble, its US Share trading product, “soon: and personal loans “not that long afterwards”.
“Beyond that, we’re not going to say anything at the moment,” she said.
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