Apple partners with Goldman Sachs to give its user the privilege of high-yield savings account
In partnership with American banking behemoth Goldman Sachs, Apple debuted its credit card in 2019. Following millions of credit card issuance, the two businesses teamed together once more to introduce a savings account. Now Apple partners with Goldman Sachs and offers a high-yield savings account to its users.
The business revealed recently that it will work with Goldman Sachs to soon introduce a new profitable savings account feature for users of its Apple credit card holders. This feature will enable the users to save and grow their “Daily Cash,” or the cashback rewards they receive from using their Apple Card, and will be called “Daily Cash.” According to Apple, cardholders will soon have the option to automatically store this money in a new, Apple saving account from partner Goldman Sachs that is accessible through Apple Wallet. Additionally, customers will be able to deposit their cash into this account.
Apple states that the account will not have any fees, minimal deposit requirements, or minimum balance limitations. This would put the account on par with several neobanks, which are frequently used as places for clients to store their digital currency and earn money through interest payments.
However, Apple did not yet specify in its news release what interest rate will be paid on these high-yield accounts. According to information from Bankrate, rival institutions are currently providing APYs in the range of 2.20%-3.05%. According to Investopedia statistics, which cites current APYs over 3.1%, some are going much higher.
Users of Apple Cards will be able to set up and manage their Savings accounts straight in the current Apple Wallet mobile app once the new product is available. Until consumers modify this to have the cash added to their Apple Cash card in Wallet instead, as they do now, all Daily Cash they earn through Apple Card transactions will be automatically put into this account. According to Apple, this option can be changed at any time.
The account balance and interest that has accumulated over time will be shown on a Savings dashboard within the app.
Apple currently offers 3% cash back on purchases made with the Apple Card and Apple Pay at a select group of retailers, including Apple itself, Uber/Uber Eats, Walgreens, Nike, Panera Bread, T-Mobile, ExxonMobil, and Ace Hardware. When Apple Pay is utilized, purchases made with Apple Cards will earn 2% cashback, and transactions made with the titanium card or a virtual card number will earn 1% cashback.
However, cardholders won’t simply be able to fill their new Savings accounts with transactions made with their Apple Cards. According to Apple, customers can add more money using a linked bank account or their Apple Cash balance. They can also withdraw this money at any moment, without incurring any costs, by transferring it back to the same linked bank account (or any other linked bank account) or their Apple Cash card.
As it expands its “services” business, which involves selling subscriptions to a variety of offerings, including Apple Music, Apple TV+, Apple Arcade, iCloud+, Apple News+, Apple Fitness+, and more, Apple has been steadily entering the payments market with the introduction of the Apple Card. This has allowed it to build a closer relationship with its customers. Apple Pay Later, a rival to Affirm that allows customers to break up purchases into four interest-free installments, is another move to make Apple Pay a more attractive alternative for online shopping. However, according to Bloomberg, this offering has been postponed until 2023.
With its Marcus by Goldman Sachs product, which declared last year that it had hit a milestone of over $100 billion in customer deposits after five years of operation, Goldman Sachs has been working toward becoming a more conventional bank. It will have a new entry point into the consumer deposits industry thanks to the agreement with Apple.
Apple did not specifically state when the high-yield Savings account would be available, only that it would do so in the “coming months.” The company could not specify which version number will include the option but did confirm that the Savings account feature will be included in a future iOS release.
Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, said in a statement that saving allows Apple Card users to increase their Daily Cash benefits over time while also saving for the future. Savings is a second simple-to-use tool that is intended to help customers lead healthier financial lives while adding even more value to users’ preferred Apple Card perk, Daily Cash.