Fintechs Push Mexico Interest Rates to 15% in Battle for Savers

Just a week after Brazil’s Nu Holdings Ltd announced a yield of 15% on its high-yield savings accounts in Mexico, Argentina’s Ualá is raising its own by three percentage points to 15%.

The speed of the decision highlights the frantic battle for customer acquisition that fintechs and digital banks are waging as they look to grow in Mexico, one of the largest unbanked nations in Latin America. The country has emerged as a key market for financial services startups given that less than 50% of the population has a bank account.

At 15%, the rates are very competitive for users in Mexico, where the central bank’s key rate stands at 11.25% and the monetary authority has already telegraphed that it won’t begin easing until next year. Inflation decelerated to 4.26% in October, a 32-month low. Mexican banks don’t widely offer interest on deposits.

The companies are not alone. Mexico-based Stori also offers 15% for those who can get off of its waitlist, Mexico-based Klar offers as much as 14%, and the fintech arm of Buenos Aires-based MercadoLibre offers 10.3% interest on deposits. To help attract new clients, only one peso ($0.06) is needed to open the accounts, and some of them offer additional perks — for example, Ualá is also offering 5% in cash back.

Nu’s yields of 15% will be in place until April 15, while Ualá will offer them until the end of that same month, according to company statements.

Nu has 4.3 million users in Mexico, driven by the rollout and expansion of its savings account, the company said in its third quarter earnings, released after market on Tuesday. The company, which posted net income above analyst estimates, does not disclose the customer acquisition cost per individual country.