Next steps for Xinja customers: What to do when your bank closes your accounts

People who have money in Xinja savings accounts have been told to transfer their funds out before Christmas, and by early January for transaction accounts, because the neobank is pulling the pin on its banking services. We break down the next steps for customers impacted by the account closures, including shutting down any direct debits linked to your Xinja account.
Xinja accounts closed
Xinja is handing in its banking licence. Image source: Xinja.

Xinja announced on Wednesday that it would withdraw its savings and transaction accounts and hand back its banking licence, giving savings customers just seven days to transfer their money out before their Stash accounts are closed on 23 December, 2020.

The neobank admitted it had succumbed to difficulties raising funds and market pressure during the year of the pandemic and, as such, had made the “incredibly hard decision” to “cease being a bank”.

Xinja first came onto the banking scene with the launch of its transaction accounts back in September 2019, after it was approved for a full banking licence from the Australian Prudential Regulation Authority (APRA) to become an authorised deposit-taking institution (ADI).

Xinja then launched its Save account in only January this year, offering Australians a competitive interest rate of 2.25%, but it wasn’t long before new customers were locked out from signing up to the account after a Reserve Bank cash rate cut put the pressure on in March. The interest rate was gradually cut for those customers who remained thereafter.

So for those who have stuck it out, here are some answers to a few key questions that might be bugging you, and some actionable next steps for Xinja depositors as the seven-day deadline looms.

Is my money safe with Xinja?

Yes. According to APRA, Xinja customers’ money is protected by the Financial Claims Scheme (FCS) because the neobank is still an ADI for the time being.

The FCS essentially acts as a safety net for deposits up to $250,000 per account holder, per ADI. This is the maximum amount any Xinja customer can hold in their accounts, combined.

As Australia’s financial safety regulator, APRA said in a media release that it will closely monitor the return of deposits, to ensure all Xinja customers’ funds are returned to them “in an orderly and timely manner”.

Key dates: What are the deadlines to transfer money?

  • 14 December: interest was accrued on Stash savings accounts up to and including this date.
  • 15-16 December: final Stash interest payments made overnight and Stash accounts no longer earn interest.
  • 16 December: instant top up no longer available.
  • 23 December: Stash accounts closed – inbound payments of any kind no longer accepted. Customers are encouraged to transfer all money out of their Stash accounts by this date.
  • 30 December: Xinja will start to automatically close all Xinja Bank transaction accounts that are empty.
  • 6 January: customers are encouraged to transfer all funds out of their Xinja Bank accounts by this date.
  • 15 January: debit cards and payment facilities will no longer work from this date.

How long does it take to transfer money to another bank?

According to Xinja, money transfers to another bank will take one to three business days, although “most times” they go in overnight. To be safe then, it could be worth organising transfers by this Friday, 18 December, to make sure you meet the Stash account closure cut-off date.

The bank says on its website that customers concerned about the amount of time a transfer is taking can get in touch via in-app chat, phone (1800 946 527 or +61 2 8598 8525) or via email.

3 steps: What to do when your bank closes your account

Canstar finance expert Steve Mickenbecker said it was important for Xinja customers to move as quickly as possible.

“If you have savings with Xinja, get them back as soon as you can, because in the meantime you’ll be forgoing interest on that money,” Mr Mickenbecker said. “You’ve got to work your money harder than that.”

He said to shop around and make sure you’re getting as good a deal as you can get.

“You should be looking for the best interest rate you can find, and be mindful of the $250,000 guarantee cap.”

Below are a few actionable steps to take into consideration for anyone whose bank is closing their savings or transaction accounts.

1. Stop direct debits

First point of call is to cancel any direct debits to or from your Xinja Bank account, or any other bank account that is closing. This could include payments such as your phone bill, where you may be charged a fee if the payment can’t be processed correctly.

2. Contact your employer and anyone else who sends you money

Next step is to contact anyone who regularly sends you money, such as the payroll department at your place of work or Services Australia if you receive government payments, to notify them of the situation so your payments aren’t deposited into the closing account. If possible, arrange for your payment to be deposited into another account of yours for the time being. The next step could help if you don’t currently have an alternative account.

3. Compare savings and transaction accounts

If you need to open up a new transaction account or savings account, start comparing your options and consider whether the accounts have any fees, what interest rate is available on the savings account and whether it is competitive, whether any free transactions or fee rebates are available, how easy it is to access your money, and any other features that may be useful for your own saving and spending behaviour.

Where should I put my money?

For those who need to set up a savings account with a new bank, Canstar’s research analysts have crunched the numbers to find the highest-interest savings accounts on our database at the time of writing. See below for the bonus or promotional conditions on each account and check with providers for more details.

We’ve also rounded up a list of 5-Star Rated transaction accounts. See below.

Top 5 savings account interest rates

Provider Account Base Rate Bonus Rate Promo Rate Promo Period Total Rate
Rabobank Australia High Interest Savings Account 0.30% 1.45% 4 months 1.75%
Bank of China Online Saver 0.40% 1.00% 4 months 1.40%
Macquarie Bank Savings Account 1.20% 0.15% 4 months 1.35%
MyState Bank Bonus Saver 0.15% 1.20% 1.35%
ING Savings Maximiser 0.05% 1.30% 1.35%

Source: www.canstar.com.au – 16/12/2020. Based on savings accounts on Canstar’s database, for a deposit of $10,000. Top 5 selected based on total rate and table sorted in descending order by total rate, followed by base rate. Conditions apply to bonus and promo rates – refer to the provider’s site for more information.

5-Star Rated transaction accounts

Provider Account Monthly Account Fee Fee waived* if each month you…
ANZ Access Advantage $5 Deposit $2k+, are under 25 or over 60, are a full-time student
Bank of Melbourne Complete Freedom $0
BankSA Complete Freedom $5 Deposit $2k+, are under 21, are a full-time tertiary student (including apprentices)
Bankwest Hero Transaction Account $6 Deposit $2k+
Commonwealth Bank Smart Access $4 Deposit $2k+, are under 25, are a full- or part-time tertiary student (including apprentices)
HSBC Day to Day Account $0
Everyday Global Account $0
ING Orange Everyday $0
Macquarie Bank Transaction Account $0
NAB Classic Banking $0
St.George Bank Complete Freedom $5 Deposit $2k+, are under 21, are a full-time tertiary student (including apprentices)
Suncorp Bank Everyday Options Account $0
Westpac Choice $5 Deposit $2k+, are under 21, are a full-time tertiary student

Source: www.canstar.com.au – 16/12/2020. Based on the High Transactor profile of Canstar’s Savings and Transaction Account Star Ratings (October 2020). Table sorted in alphabetical order by provider name, followed by account. *Other fee waivers may apply (e.g. if you have a pension paid into the account or if you make home loan repayments out of the account), please refer to the account terms & conditions or contact the provider for more information.


This article was reviewed by our Sub Editor Tom Letts before it was published, as part of our fact-checking process.

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