By Oliver Smith on Friday 24 January 2020
High-interest rate offerings are winning over Australian savers.
Australian high street banks are facing a loss of billions of dollars in savings deposits as digital banks win over consumers with high-interest rate offerings.
Judo Bank, a digital bank aimed at serving Australian small and medium-sized businesses, this week revealed it has collected over A$1bn in personal term deposits.
On these deposits, Judo pays between 1.9% and 2.4% depending on the length of the term, far better than c.1.25% being paid on equivalent deposits by Australia’s big four ANZ, Westpac, NAB and Commonwealth Bank.
Some 95% of Judo’s deposited cash, which is protected up to $250,000 by the Financial Claims Scheme, has now been leant out to Australian businesses, quickly making also one of the country’s fastest-growing lenders.
Meanwhile, Nine News Australia reported that Australian challenger Xinja has collected A$30m in deposits since launching its “Stash” savings account last week that pays 2.25% on amounts up to A$245,000.
86 400, the digital bank chaired by Metro Bank and Atom Bank co-founder Anthony Thomson, has collected A$100m in deposits over the past four months with its savings interest rate of 2.25% on amounts up to A$100,000.
Finally, the yet-to-launch Volt Bank is planning on offering 2.15% interest on savings up to $245,000 when it launches in the coming months.