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NEOBANK DEPOSIT RATES MORE DOWN THAN UP
Neobanks follow the big four and slash deposit rates
● Neobanks 86 400, Up and Xinja join the big four in cutting at-call savings rates ● Big four bank average on-going at-call savings rate is 0.54%, 121 basis points below the leading rate ● Top ongoing at call savings rate is 1.75%, with the average savings 0.68% ● Rates fell on 70 out of 86 term deposit accounts (is this accounts not providers)last month, including all four of the big banks term deposits ● The top one-year term deposit is 1.40% through Judo Bank, 40 basis points above the average ● Westpac targeting under 30s with 3.00% rate for balances up to $30,000
4 August 2020: Analysis by financial comparison site Mozo has found neobanks 86 400, Up and Xinja have followed the big four banks and made significant cuts to their at-call savings rates.
Over the past month Mozo found Up was anything but, slicing 25 basis points of its Saver Account (1.65%), while 86 400 and Xinja both cut 15 basis points off their popular accounts taking their rates to 1.70% and 1.65% respectively.
“While the neobanks had managed to offer a glimmer of hope for the nation’s savers, these out of cycle cuts are a worrying sign,” says Mozo Director Kirsty Lamont.
“As they seek to attract new customers, we’ve come to expect the neobanks will buck the downward trend of the banks but with their savings rates also heading South they appear to be rejoining the pack.”
The research comes in the wake of Xinja closing access to its Stash savings account to new customers earlier in the year.
The leading at-call savings rate in the Mozo database of 1.75% offered by Australian Unity and MyState Bank, is coming in 1.07% higher than the average. Big four bank average on-going at- call savings rate is 0.54%, 121 basis points below the leading rate.
While most of the big bank rates are falling, Westpac is targeting younger savers with under 30s able to access a 3.00% rate for balances up to $30,000.
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It was also a tough month for term deposits, with 70 of the 86 accounts tracked by Mozo seeing cuts - including all four of the big banks.
“For the second consecutive month our biggest deposit takers have cut their term deposit rates,” says Lamont.
“Unfortunately there is not a lot of good news around if you’re trying to get a decent return on your savings but with a significant gap between the highest and lowest rates in the market, it still pays to compare.”
Mozo found the top one-year term deposit is 1.40% through Judo Bank, 40 basis points above the average. It’s also significantly higher than the best of the big four, 0.85% offered by NAB.
For data or interviews contact: Tom Godfrey, 0477 486 095, [email protected]
About Mozo.com.au Mozo compares more than 1,800 products from over 200 banking, insurance and energy providers to help thousands of Australians find a better deal each month via its award-winning comparison tools and calculators. As one of the most visited comparison sites in Australia, our team of experts routinely provides financial commentary and advice for major news outlets in Australia.
TOP 5 ONGOING SAVINGS ACCOUNT INTEREST RATES On $10,000 after 12 Provider Product Best ongoing rates Months
Westpac Life (18-29 years old) 3.00% (0.40% base rate) $10,304
Australian Active Saver 1.75% (0.25% base rate) $10,176 Unity MyState Bank Bonus Saver Account 1.75% (0.25% base rate) $10,176
86 400 Save Account 1.70% (0.25% base rate) $10,171 Bank of Fast Track Saver 1.65% (0.20% base rate) $10,166 Queensland Account
Source: mozo.com.au 4 August 2020, conditional bonus rates at $10,000, interest paid monthly
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BEST 1 YEAR TERM DEPOSIT RATES
Provider 1 year term deposit Balance after 12 Months
Judo Bank 1.40% $10,140
Australian Military Bank 1.35% $10,135
Teachers Mutual Bank 1.30% $10,130
Australian Unity 1.25% $10,125
Qudos Bank 1.25% $10,125
Source: Mozo.com.au 4 August 2020 at $25,000, interest at maturity