Apple Inc., the world’s largest technology company, is venturing into the banking sector with the introduction of a high-yield savings account linked to the Apple Card. Developed in partnership with Goldman Sachs, the account offers a substantial 4.15 per cent annual percentage yield (APY), which is significantly higher than the US national average of 0.35%, as reported by the Federal Deposit Insurance Corporation (FDIC).
Apple’s bold move aims to enhance the value of the Apple Card for its users and create a more seamless daily saving experience. Jennifer Bailey, Apple’s Vice President of Apple Pay and Apple Wallet, said 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.”
The new savings account comes with no fees, no minimum deposits, and no minimum balance requirements. With a maximum allowed balance of $250,000, it is set to pose stiff competition to traditional banks. The savings account enables users to grow their daily cash rewards by automatically depositing them into the high-yield account. However, users have the flexibility to change this destination and can also deposit additional funds from their linked bank account or Apple Cash balance.
Apple’s high-yield savings account offers a dashboard within the Wallet app, where users can conveniently monitor their account balance and the interest earned over time. Furthermore, funds can be withdrawn at any time without any charges, either by transferring them to a connected bank account or to an Apple Cash card.
In comparison to leading Indian banks such as State Bank of India, HDFC, ICICI, Kotak Mahindra Bank, and Punjab National Bank, which offer interest rates ranging between 3 per cent to 3.50 per cent, Apple’s 4.15% APY is a game-changer. This groundbreaking move by Apple demonstrates its commitment to disrupting the financial services industry, potentially challenging other banks in the process. However, Apple Pay is not currently available in India.
Apple’s foray into the banking sector follows the launch of its buy now, pay later (BNPL) service in March. Apple Pay Later allows users to repay their Apple Card purchases in four equal installments over six weeks without any interest or fees. This service is managed by Apple’s newly formed financial division, Apple Financing LLC.
With a massive captive audience of iPhone users, Apple’s innovative approach to financial services has the potential to transform the banking industry. By continually adding financial products to its offerings, Apple is poised to establish a comprehensive suite of services that can compete with traditional and neo-banks.