Apple Jumps into Deposit Market With High-Yielding Savings Account

CUPERTINO, Calif.–Consumers can now turn to their iPhones for a high-yield savings account. Apple has announced that holders of its Apple Card can open an account with a 4.15% APY as the company jumps into the increasing competition around high-yielding savings products.

As CUToday.info just reported here, many smaller institutions—a relative term when CUs and banks are compared—are being forced to raise interest rates in order to stem the outflows, according to one new analysis. The offering comes in the wake of the introduction by Apple of its Apple Pay Later offering, a buy now, pay later solution.

Apple has partnered with Goldman Sachs on both of its newest offerings as it seeks to transform its iPhone into a digital wallet that can help keep consumers linked to the software ecosystem behind its devices, according to analysts.

The savings account requires no minimum deposit and carries FDIC deposit insurance.

How it Works

“Money can’t be spent directly from the Apple savings account, but would first need to be transferred to a checking account or Apple Cash,” the Wall Street Journal reported, before adding, “Though the 4.15% rate is higher than that of the standard savings account, a handful of online banks offer rates as high as 5% APY, according to Bankrate. But popular high-yield savings products from Ally Bank or Goldman’s own Marcus offer lower rates than Apple’s: 3.75% and 3.9%, respectively.”

The favorable rate, combined with Apple’s existing brand recognition, could be especially attractive to new customers and given concerns about the stability of the banking industry after the collapse of Silicon Valley Bank, Yiming Ma, assistant professor of finance at Columbia University, told the Wall Street Journal. “I think what is special in this case is Apple is Apple. Everyone knows what Apple is, and many people already have an Apple Card.”

The iLicense

The report further noted Apple has also worked with certain states in the U.S. to create legal digital versions of driver’s licenses.