Apple takes on banks with 4.15% APY savings account
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Apple has launched a high-yield savings account with a 4.15% annual percentage yield, the company announced Monday.
Why it matters: It's the tech giant's latest move to entice people to sign up for its growing basket of financial products at a time when the national average annual percentage yield for savings accounts is sitting at under 0.4%.
- Online, only UFB Direct, Vio Bank and CIT Bank are currently offering 5.02%, 4.77% and 4.75% APY respectively, according to Bankrate.
How it works: Only people who have the Apple Card, Apple's credit card, can sign up for the account inside Apple's Wallet app.
- The company partners with Goldman Sachs to offer both the card and the savings account, which does not have a fee and does not require minimum deposits and balances.
- Apple is also positioning the new savings account as a way for accrued Daily Cash — Apple Card's cash back program — to grow when unused.
Between the lines: Loyalty should pay.
What they're saying: “The high-yield savings account launch comes less than a month after the company introduced Apple Pay Later in March and is a clear indicator that Apple is positioning itself as a major contender in the fintech [industry]," Kevin Kennedy, analyst at global research firm Third Bridge, wrote in a note emailed to reporters.
Yes, but: Apple had 6.7 million people using its Apple Card as of early 2022, according to a survey of credit card users cited by S&P Global.
- That figure stood at 6.4 million in 2021, suggesting not only sluggish growth, but also that some people may have stopped using it.
- And while Apple certainly has scale working in its favor — there are 2 billion active Apple devices currently in use — the buildout of Apple Card has cost partner Goldman Sachs billions.
What to watch: Consumer technology, including Apple's, makes it easier for people to move money between accounts and services.
- Banks are rushing to launch their own digital wallet and increasing interest rates they pay savers to keep customers glued to them.
