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Volt joins fellow neobanks and announces a cut to its savings rate

Posted: 15 October 2020 12:19 pm
News

Young lady on her phone looking frustrated.

The total interest rate on the Volt Save account will be cut by 20 basis points, from 1.45% p.a. down to 1.25% p.a.

Volt will be dropping the total variable interest rate on its Volt Save account from 1.45% p.a. to 1.25% p.a., taking effect on Friday 16 October. The bank said in a note to customers that while it was making a 20 basis point cut to the total rate, this rate would still be offered on balances up to $245,000.

Volt Bank is the latest digital neobank to announce a cut to its savings account rate, joining Up, Xinja and 86 400 which have also announced cuts.

The biggest cut is by Up Bank, which will be reducing its total bonus rate by 50 basis points from 1.60% p.a. down to just 1.10% p.a. as of 1 November. However Up is also increasing the balance limit that this rate is paid on from $50,000 to $1 million. With this change, Up will have (by far) the most generous balance limit of all the neobanks.

Next comes 86 400, which has cut its total bonus rate by 25 basis points from 1.60% p.a. down to 1.35% p.a. This rate is still higher than that of Up's (come 1 November) and Volt's new rates. However, to earn this maximum rate customers need to open an 86 400 Pay account and deposit $1,000 per month into either account.

The Volt Save account, in comparison, has no conditions to meet to earn the total interest rate. That being said, the requirement to deposit $1,000 a month isn't a terrible thing; it encourages you to save regularly, and you can still withdraw it again if needed without losing your interest.

Xinja has made the smallest cut to its bonus variable rate, dropping the total rate by 15 basis points from 1.65% p.a. down to 1.50% p.a. However, the Xinja Stash account has been closed to new customers since March 2020. So unless you held an account before then, this account isn't available to customers.

It's not only the neobanks making cuts. Just last week UBank cut the rate on its popular USave savings account down to 1.46% p.a. from its previous 1.60% p.a.

Looking specifically at interest rates, one of the best ongoing rates in today's environment is 1.55% p.a. offered with the ME Online Savings account. Another leading rate is MyState's variable 1.50% p.a. offered on balances up to $250,000. You could get an even higher rate with an introductory savings account, like the Rabobank high interest savings account, however it'll only last for around four months.

If you're not happy with your interest rate, compare savings accounts and consider switching.

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