Neobanks are finding it difficult to maintain their market-leading deposit rates. In the past few weeks three have cut rates and two have limited the balances on which they will pay high rates.
Last week, 86 400 wrote to customers advising them that from October 13 their Save account rate would be cut from 1.6 per cent to 1.35 per cent.
The account has a base rate of 10 basis points and to get the 1.25 per cent bonus rate on balances up to A$100,000 account holders must deposit a minimum of $1000 a month.
86 400 also advised customers that the balance on which the bonus rate was payable would drop from balances up to $100,000 to balances up to $50,000 from November 1.
Also last week, Xinja Bank told customers it was cutting its savings rate on its Stash account from 1.65 per cent to 1.5 per cent and the rate would only be paid on amounts up to $150,000.
Neobank Volt cut its savings rate last month, reducing the rate from 1.65 per cent to 1.45 per cent.
The neobanks are not alone in cutting savings rates. According to the latest Mozo Banking Roundup, September was another month when savings rates were cut heavily.
Three of the major banks (all but ANZ) cut at-call rates, along with ING, Heritage and Australian Unity.
All four majors cut term deposit rates, along with AMP Bank, Australian Unity, Bank of Sydney, and Teachers Mutual Bank.
At the end of September, the top bonus saver was 1.65 per cent being offered by Australian Unity and the top introductory rate was 2 per cent being offered by Rabobank for four months.
The top TD rates were all being offered by Judo Bank – 1.37 per cent for nine months, 1.28 per cent for one year and 1.45 per cent for two years.