Xinja pauses inflows into savings account amid rate cut
Xinja Bank has hit the “pause button” on inflows into its savings account as it seeks “to manage costs” following the Reserve Bank’s latest rate cut.
On Tuesday, the Reserve Bank of Australia cut the official cash rate by 0.25 percentage points to 0.50 per cent.
In a statement, the neobank said the move was in part because it wanted to “look after existing customers following the RBA’s rate cut and unprecedented inflows”.
“When faced with higher than expected deposit flows, and an RBA rate cut, most banks would just drop deposit interest rates, hurting existing customers while chasing new ones. That’s not what Xinja is about,” Xinja CEO and founder Eric Wilson said.
“We are holding our rate steady, at 2.25 per cent, but hitting the pause button on customers opening Stash accounts.”
Wilson said that the RBA rate cut makes it more expensive for Xinja to hold deposits.
At the same time, the neobank is planning to launch its mortgages.
“There has been an unprecedented uptake of Xinja Bank by Australians; and now, how we - as a new bank - manage the costs of those deposits”.
Its savings account , branded as ‘stash accounts’ will be available again as new customers who have only a transaction account will get access.
This week, Xinja also announced that the launch of Series D capital raising aimed at sophisticated investors, with a minimum of $20,400 to invest.