Apple has played enough Monopoly to know that it’s advantageous to take on both the role of player and banker. Forbes reported on Monday, citing anonymous inside sources, that after Apple debuted its new Goldman Sachs-backed Apple Card savings account, consumers deposited close to $1 billion in just four days.
The company’s mobile payments platform has been successful, but the new savings account is even more popular. Forbes reports that in the week following the debut of Apple’s new high-return savings account last month, the company received contributions totaling $990 million. About 240,000 new users joined the service during that time. The Federal Deposit Insurance Corporation insures deposits up to a maximum of $250,000 per depositor. If the claims made by Forbes are accurate, customers are typically funding their new accounts with several thousand dollars.
Gizmodo tried to contact Apple to get their take on the matter and some hard data on how many people utilize their savings accounts, but we haven’t heard back as of yet. The figures show that Apple has quickly become a key participant in the financial industry. Apple may provide additional details regarding its cash reserves in its upcoming quarterly report on Wednesday, given that its laptop division has struggled so far in 2023.
One possible explanation for the correlation between the user and deposit counts is that users are having their daily cash rewards deposited into savings accounts rather than on Apple cash prepaid cards. Still, Apple is head and shoulders above most other similar accounts when compared to Goldman Sachs’s own high-yield savings account through its consumer banking division, Marcus, which offers just a 3.9% annual yield.
The High-Interest Rate of 4.15% Per Year
How much of this may be attributed to the popularity of iPhones, the high-interest rate of 4.15% per year on the savings account (while the national average rate is just.24% according to Bankrate), or the fact that Apple fans will buy anything from the Cupertino tech corporation, even a body pillow of Tim Cook’s likeness. All of the above are likely to be to blame.
Apple’s credit card boasts no annual or late fees, but considering that users need to own an iPhone running iOS 12.4 or later and an Apple ID with an associated iCloud account “in good standing,” Apple’s savings account is far more restrictive than some other banks and is targeted towards diehard Apple users. The overall APR for a user might range from roughly 16% to 27%, with the exact number dependent on their credit history.
Only a select few savings accounts provide returns higher than 4%. Banks like Bask Bank, which offers a yield of 4.75 percent, are among the few that compete with Apple, but they don’t have Apple’s loyal customer base or consistent access to iPhone users. Timing may have played a role in Apple’s immediate success. Forbes noted that several banks have experienced chaos due to increased interest rates. The Federal Reserve has lately acknowledged that the failure of Silicon Valley Bank was due in part to Fed policy.