Eric Wilson, Xinja’s founder and CEO, explains why we took the unprecedented step of stopping the opening of new Stash accounts rather than dropping the interest rate paid to existing Xinja customers.
It’s been a pretty hectic week in the world of finance. The RBA has reduced the interest rate by 0.25% paid on money to a super low 0.5%, Xinja has had its biggest couple of days ever for new customers and new deposits, and the Coronavirus has the country and the stock market all shook up.
And just as Woolies, due to unprecedented demand, have run out of loo rolls, so have we run out of Stash accounts 🙂
Like any business Xinja has to keep control of its costs and when a bank gets lots of deposits and the RBA cuts interest rates, that makes costs go up.
When faced with higher than expected deposit flows, and an RBA rate cut, most banks would just drop deposit interest rates, hurting existing customers while chasing new ones. That’s not what Xinja is about.
We have decided to take a different path.
Because these are uncertain times for everyone, we are holding our rate steady, at 2.25%, but hitting the pause button on customers opening Stash accounts.
No more new Stash accounts means no increase in cost to Xinja, and means we can protect the interest rate for people already with a Stash account.
So Xinja customers with a Stash account are unaffected and get to keep the same rate. Xinja bank account customers without a Stash account will be given first priority when Stash reopens (we are hoping in a couple of months), and anyone can open a Xinja bank account as normal.
As always, if you’ve got thoughts about our decision on this, do join the conversation on the forum here.