Xinja cuts savings rate: Where can you get the best interest rate now?
Xinja Stash has been a popular choice for savers due to its market-leading rate, but there are now several savings accounts offering a better deal.
Digital bank Xinja has offered one of the best savings rates in the market for a while now at 2.25% p.a., but that's about to change. The bank has announced that as of 11 May 2020 it will cut its savings rate by a huge 45 basis points down to 1.80% p.a.
Just two months ago on 5 March Xinja announced it was closing its Xinja Stash savings account to new customers in order to maintain its market-leading 2.25% rate for existing customers. At the time, many other banks dropped their savings rates following two cuts to the official cash rate by the RBA. Referring to these cuts by other banks at the time, Xinja said "that's not what Xinja is about" and confirmed that it would be holding its rate steady at 2.25%.
However, the bank will now cut its rate to 1.80% p.a., which is available on balances up to $245,000 with no deposit conditions to meet. Xinja also told Finder that the Stash account will likely remain closed to new customers until mid-year when the bank looks to launch some lending products.
"We held the rate at 2.25% despite successive rate cuts from the Reserve Bank, and we are probably the only bank to have done that. However, it is a variable rate, and we can't ignore two Reserve Bank rate cuts indefinitely," said Xinja chief executive and founder Eric Wilson.
Where can you get a good savings rate now?
If you're a Xinja customer, you might now be wondering if you can get a better deal elsewhere. Although a 45 basis point cut is significant, Xinja's new savings rate of 1.80% p.a. is still very competitive in today's low-rate market. This is particularly true given there are no conditions attached to earn this rate. But if you're simply chasing the highest savings rate then yes, there are a few other accounts that now offer a better rate than Xinja.
Rabobank offers 2.25% p.a. for the first four months, with no conditions to meet. Macquarie offers a really competitive 2.65% p.a. for the first four months with no deposit conditions to meet either. These are both great rates, but keep in mind they're introductory rates only and will drop after the four months is up.
BOQ's Fast Track Saver account offers an ongoing bonus rate of 2.00% p.a. each month you deposit $1,000 and make 5 transactions from your linked BOQ transaction account. Greater Bank also offers 2.00% p.a. for under-25s when you grow your balance by any amount during the month. And MyState Bank offers an ongoing bonus rate of 1.85% p.a when you deposit just $20 a month and 5 transactions.
Elsewhere, fellow digital bank 86 400 now offers a slightly higher savings rate than Xinja, but with some conditions attached. To earn the 1.85% p.a. bonus rate on an 86 400 Save account you need to deposit $1,000 a month.
If you're not happy with your current savings rate, it could be time to compare your options and make the switch.