Early adopters of Xinja Bank’s Stash account have continued to trust the bank, and make the most of the high yield still on offer for those customers that beat the “pause” imposed on new account openings back in early March.
APRA data for March 2020 shows that Xinja held A$472 million in deposits at the end of March, a sharp rise from $304 million in deposits at the end of February.
Xinja, controversially, elected to maintain the 2.25 per cent interest rate on this account when the Reserve Bank cut the cash rate target to 0.25 per cent nine weeks ago, leading to cuts in the high-yield and bonus rates of many competing products.
With no lending products in the market so far, Xinja, rather than earning a margin in the manner of most banks, must be incurring steep losses as it meets the interest rate promise on the Stash account. These will be exacerbated by the actual cash rate trading well below the RBA target; 0.13 per cent this week.
Of other neobanks, Judo Bank lifted its household deposit take in March to $692 million from $550m million the month before.
86 400, which pared the rate on its Save account to 1.85 per cent in line with the market, had $230 million in deposits in March, up from $177 million.
Volt Bank is making few waves in the deposit market, with $42 million in March, up from $24 million in February.
Meanwhile, if there is any flight to quality on deposits it is muted, at least on the March APRA data.
Commonwealth Bank, inevitably, is outgunning all its major bank peers.
In the month of March. CommBank’s market share in household deposits lifted to 28.61 per cent, a rise of 24 bps.
Westpac and NAB experienced a decline in deposits during March (on a market share basis); Westpac down 16 basis points and NAB 5 bps, while ANZ managed a rise of 3 bps in its share.
In total, the value of deposits from households with all banks in Australia lifted by $9 billion to $940 billion , a rise of one per cent over the month.