Apple is taking significant action to expand the financial services it provides to its customers. Apple and Goldman Sachs collaborate to provide Apple Card customers with high-yield savings accounts, allowing users to save and grow their “Daily Cash” – the cashback benefits received from Apple Card transactions — shortly. In the coming months, Apple claims cardholders will be able to save this cash automatically in a new, high-yield Savings account from partner Goldman Sachs that is accessible via Apple Wallet. Additionally, customers can put their funds into this account.
Apple says that the account will have no fees, minimum deposits, or minimum balance restrictions, making it reasonably competitive, with several new banks used by users to store digital currency and receive interest payments.
In its press statement issued this morning, Apple did not yet specify the interest rate that will be paid on these high-yield accounts. According to data from Bankrate, rivals are giving APYs between 2.20 and 3.05 percent. Investopedia data cites current APYs that exceed 3.1%, indicating that some rates are significantly higher. (Apple said it is not prepared to release the APY at this time because of the volatile interest rate environment)
Apple Card customers can easily set up and manage their Savings account inside the current Apple Wallet mobile app once the new product begins. From then forward, all Daily Cash earned from Apple Card transactions will be automatically placed into this account unless the client chooses to have the Daily Cash added to their Apple Cash card in Wallet, as is the case today. Apple notes this option may be changed at any moment.
An in-app dashboard devoted to savings will show the current amount of the account and any interest accumulated.
Apple now offers a 3% reward on Apple Card purchases made with Apple Pay at certain retailers, including Apple and Uber/Uber Eats, Walgreens, Nike, Panera Bread, T-Mobile, ExxonMobil, and Ace Hardware. Apple Card transactions will earn 2% rewards when Apple Pay is used and 1% cashback when the physical card or a virtual card number is used.
However, cardholders will not be limited to Apple Card transactions to fund their new Savings accounts. Apple claims clients can add more monies through a connected bank account or Apple Cash balance. They may also withdraw this cash at any moment without incurring any costs by transferring it back to the same related bank account (or any linked bank account) or their Apple Cash card.
With the launch of the Apple Card, Apple has been steadily moving into the payments market, allowing it to establish a more direct connection with its customers as it ramps up its “services” business, which involves selling subscriptions to Apple Music, Apple TV+, Apple Arcade, iCloud+, Apple News+, Apple Fitness+, and other offerings. Apple also aims to make Apple Pay a more feasible choice for online shopping by introducing Apple Pay Later, a rival to Affirm that splits purchases into four interest-free installments. Bloomberg reports that the IPO has been postponed until 2023.
Meanwhile, Goldman Sachs has been transitioning towards a more traditional bank with its Marcus by Goldman Sachs offering. Last year, it reported it had surpassed $100 billion in client deposits after five years of operation. The relationship with Apple will give the company a new perspective on consumer deposits.
Apple did not provide a precise release date for the high-yield Savings account, stating only that it would be available in the “coming months.” The business said the Savings account functionality would be included in a forthcoming iOS release but could not specify which version would have the feature.
Apple’s vice president of Apple Pay and Apple Wallet, Jennifer Bailey, said, “Savings allows Apple Card customers to expand their Daily Cash rewards over time while also saving for the future.” “Savings adds even more value to the most popular Apple Card perk — Daily Cash — and provides another simple option to help customers live better financial lives.”