By Helena Kelly Consumer Correspondent for Dailymail.Com
17:38 May 2, 2023 updated 17:56 May 02, 2023
- The new Apple account attracted nearly $1 billion in deposits in its first four days
- The account provides a return of 4.15 percent – more than ten times the average savings rate
- This comes after consumers withdrew nearly $60 billion from three major banks amid frustration over low interest rates and fears of a banking collapse.
Apple’s new high-yield savings account attracted nearly $1 billion in deposits in its first four days as weary savers shun the miserable interest rates offered by major banks.
The tech giant cemented its foray into banking last month when it announced it would launch a savings account with a competitive annual return of 4.15 percent.
The deal is more than ten times the average U.S. savings rate, which is currently a paltry 0.39 percent, according to data from the Federal Deposit Insurance Corporation.
Two sources have now revealed that the offering attracted nearly $400 million in deposits on its first day.
By the end of its launch week, about 240,000 accounts had been opened, one source told Forbes.
Apple partnered with Goldman Sachs to create the account that is only available to those who use the company’s credit card, the Apple Card.
Customers can open an account in less than a minute directly from their iPhone.
In practical terms, Apple’s competitive pricing means users can earn up to 10 times more over the course of a year.
For example, if a customer puts $1,000 into a savings account that offered an average Federal Reserve yield of 0.39 percent and leaves it alone, he or she will earn only $3.90 in interest in 12 months.
However, with an Apple account, they’ll get $41.50 on their savings — a difference of $37.60.
The company also requires no minimum balance or deposit — which means customers can sign up for as little as $1 — and they can withdraw funds at any time.
Comparatively, some mainstream banks limit the saver to six cash withdrawals per year.
This was a rule set by the Federal Reserve for all savings accounts lifted in 2020 — though many companies continue to enforce it.
It comes after figures showed consumers withdrew $60 billion in deposits from three major banks in the first three months of the year amid frustration with low interest rates.
The Goldman Marcus Savings Account offers a less impressive yield of 3.9 percent.
“Banks have responded quickly to the Fed’s rate hikes with higher rates on mortgages and auto loans, but savers have seen little or no increase in traditional bank deposits or savings accounts,” Richard Crone, founder of payments firm Crone Consulting, told Forbes. .
There is an outflow of CDs, money market funds, and fintech companies like Apple.
The problem is compounded by growing distrust of the major banks after First Republic became the third major bank to fail this year so far.
The bulk of First Republic’s assets have been acquired by JP Morgan Chase which will protect its $92 billion in deposits.
Apple joins a group of online savings accounts that offer better rates than their traditional alternatives.
A recent analysis by Dailymail.com broke down the ten best savings accounts that offer rates above 4 percent.
It included accounts from UFB Direct, Salem Five Direct and TAB banks paying interest rates of 4.81 percent, 4.61 percent and 4.4 percent, respectively.
There are no fees for these three accounts, while there is no minimum deposit for UFB and TAB. Salem requires an opening deposit of $10.
Seven other banks offering APY rates above 4 percent include: Primis Bank, Bread Savings, CIT Bank, Bask Bank, Upgrade, MySavingsDirect, and LendingClub.
The majority don’t require a minimum opening deposit – although Bread Savings, CIT Bank, and LendingClub do require $100. Meanwhile, the APY upgrade will only apply to savings over $1,000.
How to sign up for the new Apple Savings Account
To sign up, you must have an active Apple Card on your iPhone
On your phone, open your Apple Card through the Wallet app
Click on the icon with three dots in the upper right corner
– Choose Daily Cash
– There may also be a promotional button for account subscription
– Then follow the instructions. Your Social Security will be required
Once you sign up, Apple will start putting your daily cash into the account by default