Apple Partners with Goldman Sachs to Offer Users High-Interest Savings Accounts

In this file photo, a person stands near the Apple logo at the company's Grand Central Terminal store in New York on Dec. 7, 2011. (AP Photo/Mark Lennihan, File)

Apple continues to build on its fintech presence, announcing a new Apple Card savings account offering users an attractive 4.15 annual percentage yield.

The tech juggernaut is partnering with Goldman Sachs. Clients can create an account from the Wallet app on their iPhone devices, but users must have an Apple Card to open the savings account. There are no minimum balance or deposit requirements.

Customers can manage their Apple Card savings accounts on a dashboard that will show up in the Wallet app. This will allow customers to monitor their account balance, keep track of their interest, and withdraw funds.

Daily Cash rewards garnered from the Apple Card will automatically be transferred to the savings account. This popular feature provides users unlimited 3 percent back on all Apple purchases, such as games from the Apple Store, Apple TV+ services, or a new Mac.

“Savings helps our users get even more value out of their favorite Apple Card benefit—Daily Cash—while providing them with an easy way to save money every day,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, in a statement. “Our goal is to build tools that help users lead healthier financial lives, and building Savings into Apple Card in Wallet enables them to spend, send, and save Daily Cash directly and seamlessly—all from one place.”

Apple has been expanding its financial products and services suite, such as Apple Pay and Apple Card. The company launched Apple Pay in March, a buy-now-pay-later (BNPL) service that lets users make four interest-free payments over six weeks.

Apple CEO Tim Cook introduces Apple Card during a launch event at Apple headquarters on March 25, 2019, in Cupertino, California. (Noah Berger/AFP)

But many users might be surprised by the 4.15 percent interest rate.

The national average deposit rate is 0.39 percent, according to the Federal Deposit Insurance Corp. (FDIC). This is one of the best rates in the country, with bank rate figures showing that some of the larger financial institutions provide their depositors with minuscule returns, such as Wells Fargo (0.15 percent), Bank of America (0.01 percent), and Chase (0.01 percent).

With the Federal Reserve raising interest rates to their highest levels since late 2007, many online banks have been working to appeal to consumers with high yields on their savings.

UFB Direct maintains an APY of 5.02 percent, followed by Vio Bank (4.77 percent), CIT Bank (4.75 percent), Bask Bank (4.65 percent), and Salem Five (4.61 percent).

Marcus, by Goldman Sachs, provides a 3.9 percent APY with no monthly fees or minimum balance.

Charlie Bilello, the chief marketing strategist at Creative Planning Investor, thinks this is a “very smart move” by the company, primarily because of the “convenience factor.”

He noted that despite the 4.15 percent yield, depositors would still earn less than if they took advantage of the 3-month Treasury bill yield of 5.21 percent.

“But most people don’t know that, and Apple will see significant demand for this product,” he tweeted. “Convenience factor for US consumers is huge. Many are still earning 0% due primarily to inertia. With minimal effort they can now bump that up to 4.15% and do so with a company they already trust with their phone/tablet/pc/watch/wallet (Apple Pay). Very smart move by Apple here.”

The State of Savings in America Today

Meanwhile, will more Americans be encouraged to set aside rainy-day funds because of these higher yields in today’s rising-rate environment?

According to the Bureau of Economic Analysis (BEA), the personal savings rate stood at 4.6 percent in February, the lowest since August 2009.

A recent Bankrate survey found that 49 percent of Americans have less or no savings than a year ago, with only 43 percent able to cover an emergency of $1,000 or more. Moreover, 68 percent of adults are concerned they would not be able to cover their living expenses for a month if they lost their primary source of income tomorrow, the poll found.

The primary cause? Inflation. Sixty-eight percent say they are saving less due to inflation.

“It’s clear that the less-than-optimal economy, including historically high inflation coupled with rising interest rates, has taken a double-edged toll on Americans. Many have resorted to tapping their emergency savings if they have it, or have taken on credit card debt, or some combination,” said Bankrate senior economic analyst Mark Hamrick in the report.

In March, the annual inflation rate eased to 5 percent, the slowest growth rate in nearly two years. But the core consumer price index (CPI), which strips the volatile food and energy sectors, edged up to 5.6 percent last month.