Nearly $1 Billion Deposited in First Four Days of Apple's New Savings Account Offering
In its first four days of operation, Apple's high yield savings account, which can only be accessed through the Apple Card, saw up to 0 million in deposits, as per two insiders. On the day of launch alone, the savings account received almost $400 million in deposits, with approximately 240,000 accounts opened by the end of the first week, an anonymous source claimed. With annual returns of 4.15%, significantly higher than those offered by other banks, and the prevalence of iPhones, the account is rapidly attracting clients from other traditional banks offering less than half the interest. The account is offered in partnership with Goldman Sachs Bank USA, with Goldman’s high yield savings account, under its Marcus consumer brand, only offering a 3.90% return, which is noticeably lower than that of the Apple savings account. Apple and Goldman Sachs declined to provide any comment on the figures.
Many savers have seen their rates go unchanged despite interest rate hikes implemented by the US Federal Reserve, leading to a rise in the popularity of CDs, money market funds, and alternative financial technology platforms like Apple’s. The Apple savings account enters a competitive financial landscape after a spate of bank failures; the latest being First Republic Bank, whose esteem flag-wavered in the aftermath of the banking crisis, leading to a massive deposit outflow that claimed deposits worth $100 billion. JPMorgan Chase has since acquired a significant portion of First Republic’s assets, which include billion in deposits.
Goldman Sachs, by tapping into Apple’s two billion strong iPhone user base, is seeing a rapid inflow of consumer deposits. The new plan is exclusively available to Apple Cardholders, who can open accounts within one minute directly from their iPhones, with daily cash rewards directed into the yield account automatically. A dashboard integrated with the user’s digital wallet enables them to track their balances and interest earned. The previous arrangement of depositing daily cash rewards into Apple Cash has been discontinued, with Crone Consulting approximating that annual deposits worth $3.8 billion from the Apple Card will now find their way into the savings account. It should be noted that Apple High Yield Savings accounts are restrained by the $250,000 FDIC insurance limit.
Numerous regional banks of the traditional kind are finding it harder to maintain a healthy net interest margin amidst the Federal Reserve's major rate hikes. As a result, hardly any have been able to rival Apple's FDIC insured savings account rate of 4.15%. Alternatively, many digital banks have been presenting even more profitable yields. One such bank is Bask Bank, a sector of Texas Capital Bank situated in Dallas, which currently offers a savings account with an annual rate of 4.75%. Moreover, various fintechs like neobanks Current, Varo, and LendingClub (also known as LC) offer high yield products with annual returns that range anywhere from 2% to 4.25%. Still, inertia remains a robust force in the financial services industry, particularly in banking, and this is where Apple and Goldman stand to gain an edge with their fluid user experience and iPhone integration."
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