The bank’s new Stash savings account is a smash hit.

Australian digital bank Xinja launched Stash, its high-interest savings account, on January 15. The remarkably successful product garnered deposits of $30 million within a week, jumped to $100 million in three weeks, and thereafter doubled to $200 million by the end of the month.

Xinja became a fully licensed Australian Deposit-Taking Institution (ADI) only in September 2019. The bank already has more than 20,000 customers. (mozo)

The power of being a digital challenger

Over half of the tsunami of deposits that rolled into Xinja originated from Australia’s Big Four traditional, mainstream banks.

Eric Wilson, chief executive and founder of Xinja Bank, was understandably elated. “We have been well and truly inundated,” he said. “We welcome onboard each and every one of our 20,000 customers, who’ve made a leap to join the revolution and bank with a new, totally independent digital bank.”

He attributed the response to Australians’ willingness to try something new, and their desire for change and competition.

Xinja: WYSIWYG

“What You See Is What You Get: a great bank and a super great rate,” said Wilson to mozo. Neobanks are able to keep costs down by not having a physical branch network. Instead, they use technology to offer convenient services online or on mobile phones. Therefore, these factors give these banks a competitive edge because they can pass on the savings to customers through higher interest rates and lower service charges.

Xinja Stash features

The Stash savings account offers a base rate interest of 2.25% per annum, with no minimum deposit required. The interest rate applies to balances up to a maximum of $254,000. The bank pays the interest monthly. There are no ongoing account fees and unlimited free transactions if carried out via the Xinja mobile app.

Aussie neobanks turning on the heat

However, Xinja is not alone in mopping up deposits. Other neobanks have also been very successful in growing their customer base and balances.

Judo received $1 billion in deposits in its very first nine months of operation, according to Business Insider. Meanwhile, 86 400 notched up $100 million in deposits in the last four months.

According to Wilson, neobanks will account for a fifth of Australian consumer banking by 2023. These banks have reportedly agreed not to poach customers and deposits from among themselves in a kind of “co-opetition” truce.

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