Is neobanking dead? Volt Bank to hand back banking licence

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on June 29, 2022 Fact Checked
Is neobanking dead? Volt Bank to hand back banking licence

Volt Bank intends to return all customers' funds and hand back its banking licence.

Volt says the decision was commercial, and that all customers will have until 5 July (less than a week) to transfer funds to another nominated bank account.

The interest rates on its accounts have been set to zero, with interest accrued up until 29 June paid into Volt accounts from then, except for Save and Spend accounts which will be paid on 1 July.

Volt launched in 2017 and was granted an ADI (banking licence) in 2019, yet in 2022 was still yet to launch a live product.

Instead its savings account was in beta with prospective customers required to sign up to a waiting list.

At the time of writing Volt's savings account had an interest rate of 1.15% p.a. - below leading rates in the market.

This is the second time in 18 months a neobank has folded - in early 2021 Xinja also handed back its banking licence and refunded customer deposits.

For Xinja customers who did not transfer funds out, a NAB account was set up for them.

This also follows neobank 86 400 being absorbed into ubank after an acquisition from NAB.

Brand Founded Fate
86 400 2017, granted ADI in 2019 Acquired by NAB, merged with ubank May 2022
Alex 2018 Offers loans, on a restricted ADI so limited transaction accounts
Judo 2016, granted ADI in 2019 Offers term deposits and business lending products
Up 2018 Offers transaction and savings accounts, shares ADI with Bendigo Bank
Volt 2017, granted ADI in 2019 Folded in mid-2022, no live product
Xinja 2017, granted ADI in 2019 Folded in early 2021

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            Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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