Virgin Money attracting hot deposits

01/03/2011

The household deposit market has become a hot money market. APRA figures for January released yesterday show RaboDirect losing 13.2 per cent of the value of its deposit book in one month. RaboDirect launched a marketing campaign last May, offering a 6.4 per cent introductory rate on its online savings account. That offer ended at the end of the year and the rate dropped back to six per cent.

In response the money that had poured in then started pouring out. RaboDirect grew its deposit book by 77 per cent over the 12 months to the end of December. It then dropped 13.2 per cent in January. Last year, ING Direct withdrew the introductory rate on Savings Maximiser for a few months. As a result, ING Direct lost 1.67 per cent of its deposit base last year.

The bank with the strongest deposit inflow in January was Citibank, which is Virgin Money’s banking partner. Virgin Money’s introductory rate on its Virgin Saver account is a market-leading 6.51 per cent.

Source: Banking Day