Yahoo Finance 'So fast': This one change saved Aussies $3,000
Switching banks sounds tough and time consuming, but now there’s a $3,000 reason to do it, new data shows.
In the one year since its launch, customers of Australia’s first digital bank, 86 400, have saved more than $3,000.
Over 90 per cent of deposits held with the bank earned bonus interest each month, which adds up to around $200 for the year.
Then, the bank’s ‘Energy Switch’ service has identified a total of $270,000 in savings across its customer base since it went live in March this year, which equates to another individual annual saving of $200.
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Customers who bought or refinanced their home through the smart bank are up to $2,300 better off, and those who use the bank’s ‘Coming Up’ feature, which notifies users of upcoming subscription payments, have saved as much as $550 from cancelling unused subscriptions and avoiding late fees.
“Our customers are telling us they’re more on top of their upcoming bills, earning bonus interest like never before and thrilled by the amount they’re saving on their home loan,” chief of 86 400, Robert Bell, said.
One customer, 25-year-old Roland Postma, said the set up was “so fast and such an easy process,” and the ability to see all his bills in one place was helpful.
Neobanks challenge the big four
Since their inception, neobanks like Xinja, Judo and 86 400 have challenged the traditional banking scene, saying that without physical branches, they can cut their overheads and deliver more savings to customers.
Right now, 86 400 has one of the most competitive savings rates on the market at 1.6 per cent, conditioned upon a monthly deposit of $1,000 or more into a linked account.
Its home loan options are competitive too, with variable rates starting from 2.59 per cent per annum on owner-occupied, principal and interest loans.
But while they are challenging the norm, they aren’t immune to big bank behaviour. A Mozo analysis in August found that neobanks did make significant cuts to their deposit rates, similar to the big four.
“While the neobanks had managed to offer a glimmer of hope for the nation’s savers, these out of cycle cuts are a worrying sign,” Mozo Director Kirsty Lamont said.
“As they seek to attract new customers, we’ve come to expect the neobanks will buck the downward trend of the banks but with their savings rates also heading south they appear to be rejoining the pack.”
Bucking that trend was, surprisingly, Westpac, which targeted under 30s with a 3 per cent savings rate for balances of up to $30,000.
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