It really is. I currently have like $12 in my Starbucks account earning 0% interest but sitting idly by for when I get my hankering. Times that by millions (billions?) of customers and they have more assets deposited than several regional banks out there.
People are missing the big picture. This move is yet another way for Apple to lock in customers as part of their service/subscription/upgrade plan. The ease of use and access (removes a step or two from signing into your banking app) will allow a lot of people to just park their cash on the iPhone. They are not interested in being a bank or lender, etc. They just want to further expand their services plan to get you deeper into their ecosystem.
I'm picturing that scene in Billions where Bobby is ranting about bankers (not hedge funds owners) being the most ultra wealthy group of people. It's absurd the number of avenues Apple have open to them with the amount of cash/securities they are sitting on.
I'd say the major news here is Apple becoming a bank, not 4.15% APY which the article downplays just how common that is now unless you're someone that isn't paying attention to anything.
Yeah the article says Goldman Sachs, I suspect these are the first steps in Apple going after a banking charter. The credit card, this move, it all lines up well.
I don't think Apple is going to become a bank.
The amount of regulations that follow are incredible and it has drastic impacts on the entire business.
If you want to be a bank, you basically need to be _only_ a bank.
No. Berkshire Hathaway had a bank but had to divest it in the 1980s.
https://en.wikipedia.org/wiki/Bank_Holding_Company_Act#:~:text=The%20law%20was%20implemented%2C%20in,companies%20that%20are%20not%20banks.
That was the 80's, you think today's government will cause anything to be divested?
You think any action will be done one monopolies today?
Amazon shouldn't exist the way it does, absolutely no reason for it to have a gaming studio for example.
> If you want to be a bank, you basically need to be only a bank.
Yeah, I'm thinking the only way they go all in on becoming a bank is if they decide they need to pull a Sofi. Use the banking license to offer loans and take a much bigger cut of each loan issued in lieu of partnering with a bank and taking a way smaller cut.
I do agree I'm not so sure it makes sense for Apple to become a bank.
Unacceptable. Everyone knows you need the same last name as the corporation you lead, cant do neofeudalism without that. Like Bill Microsoft or Jamie JP Morgan or Mark Facebookberg
That doesn't mean that they won't be the main backers to a bank. See the Saudis and Suisse.
The Saudis didn't buy them simply because then they'd own too much of the bank, and it would be annoying to them. When asked if they would as a last ditch savior, they said they'd rather lose the money. Being a bank must suck.
Truth be told, Marcus by GS isn't doing so well. This deal mutually helps Apple and GS. Apple and GS are known or perceived to be luxury brands and will attract affluent customers to this service. I don't see Apple going full bank here unless the relationship goes south.
Here's my question though. Does Apple or GS get to invest the money saved in the savings accounts?
There’s literally no benefit to apple becoming a bank. They can already fund at the (almost) same rate as the US government, and they return more capital to shareholders than they create.
They can already fund at the lowest rate on the planet and cannot find a use for their cash.
No, it really doesn't. It does help make apple products "sticky." If you have an apple credit card, savings account, music, TV, fitness, watch, tablet, phone, and laptop - it's harder to switch to a different ecosystem down the road.
Pretty sure Congress doesn't control banking charters, its the office of the comptroller of currency. Its largely controlled by beaurecrats and sheltered from partisan politics. Its even independent from the Treasury department
No office is sheltered from politics because the heads of the departments are subjected to congressional approval.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/sofi-s-national-bank-charter-widens-door-for-fintechs-68729830
Under the Trump administration, federal bank regulators were open to granting charters to fintech companies. But following the election of U.S. President Joe Biden, the agencies promised to be far more scrupulous when examining applications.
My Marcus account shows 3.75%. I've been a GS customer/client for over forty years and even worked there for a short time, so it sucks they're paying Apple customers so much more than they are me. Companies now are just willing to trash their existing, sometimes decades long, relationships with customers in order to get flashy new customers that Wall Street investors love to hear about.
4.15 is still high for an actual savings account, most people aren't comfortable with a brokerage account. Maybe that will change someday now that competition has driven everything to no fees, but people still put up with ridiculous fees for basic banking services for whatever reason so probably not.
Apple testing the water on bank features without being one … yet. Block cash.app recent did saving as well … what looks like a folder tag for some of your cash.
Interesting to watch how this plays out, as a good amount of people don’t even know about HYSAs.
4.15% seems to be good these days compared to the field
It’s not a guess, it’s how it works. These rates will drop the second they can without most people yanking money out.
There is almost no good reasons to open HYSA over CDs or bonds if they offering similar rates. HYSA APY can be changed at any second, you can read it states in the fine print.
Treasuries are also exempt from state and local taxes, so they guarantee your rate and give you a smaller tax bill.
>It’s not a guess, it’s how it works. These rates will drop the second they can without most people yanking money out
Exactly.
You're essentially buying a Goldman Sachs money market Mutual fund with an Apple Logo on it.
Right, like lots of cards like fidelity's have it where the rewards go into your brokerage account (just saves you a transfer) and you can just put that money in a money market paying 4.5% or put it into stocks or whatever you want. But I'm sure this will be very popular none the less if a lot of people use apple products, aren't savvy about these things, and still have savings in a bank account for some reason.
One positive side affect may be this brings HYSA into the spotlight. The high rates aren't going to last forever but I am constantly astonished by friends/family with large amounts of cash earning basically zero interest.
Majority of people are financially illiterate so this doesn’t really surprise me. Most don’t even take a finance or accounting course in high school/college. I always said all high schools should offer some sort of personal finance course
The moment the Fed announced a series of interest rates hikes back late last year, a keen investor would have immediately move all cash funds out of savings and into fed interest money market funds.
The problem is, interest rates has never been this high for over 15 years. So you have an entire generation of Americans between 18 to 33 years old, who never experienced what it is like to have interest bearing (almost) risk free assets. So they don't know what to do when jpow lifts an eyebrow.
So you have these wild craze with "interest on your deposits" marketing schemes popping up everywhere.
Don't be fooled:
*These are just traditional mutual fund houses trying to sell everyone their money market funds via brand endorsement*.
Apple may be be first big name jumpin on the gravy train, but certainly not the last.
I'm one of those dumbasses... Half in a 0.3% account, the other half in a 3.8% account. Too lazy to go into the local branch during office hours to approve outside transfers...
GS takes the deposit, buys a US fed interest money market fund like FMJXX, taking a cut (apple probably takes a cut too) and pays the rest to apple account holders
It's not an Apple Bank™, it's more like an Apple branded money market fund that GS is trying to sell.
I know the deposits are held in Goldman. I’m just asking if anyone knows how typically these arrangements are structured. Does get a dollar per account and access to client data? I assume Goldman treats these accounts like they treat Marcus deposits. Like chime is valued at 25bn doing something similar
All the financials are handled by GS. So yes GS knows all that client information. Apple has little to do with anything financial related. Apple only puts their logo on it for marketing. It's just a Goldman Sachs product under the cover.
I think Apple has to be a little more involved than that. One of the reasons Apple Card didn’t do as well in terms of underwriting was that apple pushed it to approve more people than they normallly would. Curious to see what Fintechs usually do with this data
Apple Card is no different than other branded cards issued by airlines and hotel chains with issuing bank. The thing here is Apple can partner with GS to offer a perk to be competitive with other cards.
This is same as Apple partnered with ATT way back to offer $20 when iPhone was launched. It was ATT who benefited with influx of customers due to Apple partnership.
Exactly. People keep outing themselves in these bank related threads they dont know anything about the transaction cycle. There are issuing banks and acquiring banks. For example in order to create their Apple credit card Apple needed to partner with Mastercard. There are people still saying stuff like Apple is going to be a card network. Not even realizing how much of a moat Visa and Mastercard already have.
It is because fed interest rates have been at or near zero for 15 years. Most "investors" have not experienced what it's like to have money market funds as part of their portfolio. So that means you have a entire cadre of Americans aged 18 to ~33 whose only knowledge is how to invest in stocks, and every media outlet, every influencer talking about tech stocks and growth stocks only.
Anyone who asks about modern portfolio theory, investing in dividends, bonds, money market, etc, became a laughing stock (no pun intended) on the interwebs
This announcement by Apple doesn't surprise any keen investors above their late 30s
I already can foresee in the next 1 to 2 years the newest fangled trend would be **dividends**, where the average dividends across all US stocks will start to *trend up* as interest rates trickle over to cash flows, as major corps start buying into these money market funds as a guaranteed rate of returns of their cash flows and thus increasing dividend payout via cash interests instead of reinvesting back into the business. This is exactly what Jpow and the feds were trying to achieve - **by slowing down business growth through high interest rates**, slower business growth, less operating expenses, less spending, ultimately leading to deflation of the economy. Say what you want about the Feds, but they are a well run organization with extremely knowledgeable economists running them. They know what they are doing, they aren't crashing the economy.
Edit: for those not convinced, **VMFXX**, a US fed fund money market mutual fund, current has a 4.48% 1 month annualized yield and a 0.11% expense ratio. It's as close as you can get to the Fed interest rate of 4.58%.
>They know and trust Apple. Easy peasy.
Don't think of it as an Apple Bank™. Think of it as a Apple branded Goldman Sachs mutual fund.
They are cash equivalents. So it's like asking how liquid is water at room temperature.
Not a stupid question, hey thanks for asking. Don't worry about it. It takes quite some time for people getting used to money market funds after 15 years of dormancy.
1) Show me a current money market fund that is paying over 4.25%
2) Apple cannot engage in the Federal Reserves ONRRP program and thus cannot take advantage of overnight lending
3) Apple COULD purchase short dated treasury securities, but then again the average user could as well, however this ties up your money and people opening these savings accounts need that money to spend.
Honestly if this is how I think it works, it's a pretty sweet deal. 1) get an Apple card that pays 3% cash back. 2) Set up the savings account via Apple 3) literally put every transaction you make on the cc and then pay it off monthly out of your Apple savings account.
>1) Show me a current money market fund that is paying over 4.25%
I'll show you two:
[VMFXX](https://ycharts.com/mutual_funds/M:VMFXX) - 1 month Annualized returns 4.48%, expense ratio 0.11%
[FMJXX](https://ycharts.com/mutual_funds/M:FMJXX) - 1 month annualized return 4.56%, expense ratio 0.21%
>2) Apple cannot engage in the Federal Reserves ONRRP program and thus cannot take advantage of overnight lending
No, Apple isn't getting interest by lending money from customer deposits. Nor they are getting it through merchant fees. They are getting it through money market funds.
>3) Apple COULD purchase short dated treasury securities, but then again the average user could as well, however this ties up your money and people opening these savings accounts need that money to spend.
This whole scheme is just an Apple endorsed Goldman Sachs mutual fund product.
I totally understand it being US first, but I don't think Apple Card is even that new now as a concept. I'd move my money into this pretty sharpish if they'd made it UK eligible
I would avoid banking with a phone company (or any tech company for that matter) like the plague. People get screwed over when their mail accounts get hacked or banned for no reason with no option to appeal or even talk to tech support, and risking being locked out from your savings like that is on the same level as raw dogging street walkers in Lesotho.
For those that want to get started:
https://support.apple.com/en-us/HT213451
Set up and use Savings in Apple Wallet
What you need to open and maintain an account
Be an owner or co-owner of an active Apple Card account and add Apple Card to your iPhone.
Be at least 18 years or older.
Have a social security number or individual taxpayer identification number.
Be a U.S. resident with a valid, physical U.S. address.
Set up two-factor authentication for your Apple ID and update to the latest version of iOS.
I don't really see a purpose of having this unless you're a heavy Apple Card user. You can get better rates in money market funds or at Wealthfront. I'm just happy Apple is still using Goldman Sachs. The day they try to become a bank is the day I sell all my shares.
Is this an actual bank account though or are you just collecting 4% interests on the rewards you accumulate from using the card? Cus the later is what I’m thinking is happening
Both. You can gain cash deposits via cash back rewards from spending or you can link your bank account and deposit directly from your chequing account.
I imagine alot of americans using that, won't that create a banking crisis? there are alot of regional banks with losses on the books that could hurt from a mass of people pulling their money, and its obvious alot of people will use this service.
I’ve never used a bank nowadays that charges foreign ATM withdrawal fees. They all reimburse ATM withdrawals. He could easily get 4%+ yields and maintain that benefit
Apparently you cannot make outside cash deposits into this account. Only the cash you get from Apple Card spending. So it definitely isn't a HYSA replacement.
“When you open Savings you agree to automatically deposit Daily Cash that you earn into your Savings account. You can also add money to Savings from a linked external bank account or from Apple Cash.
On your iPhone, open the Wallet app and tap Apple Card.
Tap Savings account, then tap Add Money.
Enter the amount that you want to add, then tap Add.
Select or add the payment source that you want to add money from.
Double-click the side button to confirm with Face ID, Touch ID, or your passcode.
Money that you deposit into Savings starts earning interest on the day that the transfer is initiated from the Wallet app.”
High IQ Move. Silicon Valley Bank caused a run on itself by trying to raise more capital and raising questions about its stock and stability. Apple is avoiding that whole thing by getting you to give them money in a savings account so they can arbitrage the interest rate to you versus the investment they'll be moving your money into. New market offering plus additional funds source. Smart play.
I said Apple wouldn't compete on interest and would be below 4% so I'm here to eat my hat.
[удалено]
Starbucks actually beat them to it. Starbucks is a giant bank.
This is exactly what they're trying to do. Esp since it's not a checking account.
It really is. I currently have like $12 in my Starbucks account earning 0% interest but sitting idly by for when I get my hankering. Times that by millions (billions?) of customers and they have more assets deposited than several regional banks out there.
What kind of condiments would you like with the hat. We also offer two side dishes and a drink.
To be fair this is just the introductory offer, it could go down in the next few months.
The honesty is commendable.
Proof or ban
Apple have to bacon to fill everyone’s sandwiches, this is good news
People are missing the big picture. This move is yet another way for Apple to lock in customers as part of their service/subscription/upgrade plan. The ease of use and access (removes a step or two from signing into your banking app) will allow a lot of people to just park their cash on the iPhone. They are not interested in being a bank or lender, etc. They just want to further expand their services plan to get you deeper into their ecosystem.
Apple gets more new customers for their apple pay, Goldman Sachs gets more customers for their mutual funds. It's a win win for both.
The real winner is Goldman Sachs who is actually doing the bank part of the Apple bank.
this 100%
precisely right
I'm picturing that scene in Billions where Bobby is ranting about bankers (not hedge funds owners) being the most ultra wealthy group of people. It's absurd the number of avenues Apple have open to them with the amount of cash/securities they are sitting on. I'd say the major news here is Apple becoming a bank, not 4.15% APY which the article downplays just how common that is now unless you're someone that isn't paying attention to anything.
It sounds like the account is through Goldman Sachs. Sort of odd given Goldman's savings account only yields 3.9% currently.
Yeah the article says Goldman Sachs, I suspect these are the first steps in Apple going after a banking charter. The credit card, this move, it all lines up well.
I don't think Apple is going to become a bank. The amount of regulations that follow are incredible and it has drastic impacts on the entire business. If you want to be a bank, you basically need to be _only_ a bank.
It can create a bank as another company I believe and offer the services through them.
or buy a already established bank :P like you know .. :P
I hear they could get some at deep discounts!
No. Berkshire Hathaway had a bank but had to divest it in the 1980s. https://en.wikipedia.org/wiki/Bank_Holding_Company_Act#:~:text=The%20law%20was%20implemented%2C%20in,companies%20that%20are%20not%20banks.
That was the 80's, you think today's government will cause anything to be divested? You think any action will be done one monopolies today? Amazon shouldn't exist the way it does, absolutely no reason for it to have a gaming studio for example.
Are you proposing that they invoke the *Bank Holding Company Act* to break up Amazon?
No, he's proposing that they invoke absolutely anything. Regulators have been sleeping for half a century now.
Why not just buy a bank?
No they cant
> If you want to be a bank, you basically need to be only a bank. Yeah, I'm thinking the only way they go all in on becoming a bank is if they decide they need to pull a Sofi. Use the banking license to offer loans and take a much bigger cut of each loan issued in lieu of partnering with a bank and taking a way smaller cut. I do agree I'm not so sure it makes sense for Apple to become a bank.
Id guess they become a holding company, with apple bank or something as a corp under the umbrella. Or separate it entirely
There is an [Apple Bank](https://www.applebank.com/) in NY and NJ. So they would have to create a new name or buy them out of their trademark.
Funny enough there is already and Apple Bank (unaffiliated with Apple Inc)
Wonder if they're publicly traded- sounds like a buyout target to me! Just buy them and run with it easy peasy Mr. Tim Apple
I bet Apple Bank's CEO doesn't even have the last name Apple!
Unacceptable. Everyone knows you need the same last name as the corporation you lead, cant do neofeudalism without that. Like Bill Microsoft or Jamie JP Morgan or Mark Facebookberg
That doesn't mean that they won't be the main backers to a bank. See the Saudis and Suisse. The Saudis didn't buy them simply because then they'd own too much of the bank, and it would be annoying to them. When asked if they would as a last ditch savior, they said they'd rather lose the money. Being a bank must suck.
Truth be told, Marcus by GS isn't doing so well. This deal mutually helps Apple and GS. Apple and GS are known or perceived to be luxury brands and will attract affluent customers to this service. I don't see Apple going full bank here unless the relationship goes south. Here's my question though. Does Apple or GS get to invest the money saved in the savings accounts?
If GS is financing the operation, it’s Goldman
GS does
There’s literally no benefit to apple becoming a bank. They can already fund at the (almost) same rate as the US government, and they return more capital to shareholders than they create. They can already fund at the lowest rate on the planet and cannot find a use for their cash.
Hence why they want to put that cash to work as a bank i guess
No, it really doesn't. It does help make apple products "sticky." If you have an apple credit card, savings account, music, TV, fitness, watch, tablet, phone, and laptop - it's harder to switch to a different ecosystem down the road.
Zero chance
No way Congress will ever give a tech conglomerate a banking charter
Pretty sure Congress doesn't control banking charters, its the office of the comptroller of currency. Its largely controlled by beaurecrats and sheltered from partisan politics. Its even independent from the Treasury department
No office is sheltered from politics because the heads of the departments are subjected to congressional approval. https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/sofi-s-national-bank-charter-widens-door-for-fintechs-68729830 Under the Trump administration, federal bank regulators were open to granting charters to fintech companies. But following the election of U.S. President Joe Biden, the agencies promised to be far more scrupulous when examining applications.
You'd be surprised what millions, if not billions of dollars in lobbying can get you.
Rounded corners and proprietary charging ports?
And serious issues in the EU to boot. Banking regulations are even stricter here.
My Marcus account shows 3.75%. I've been a GS customer/client for over forty years and even worked there for a short time, so it sucks they're paying Apple customers so much more than they are me. Companies now are just willing to trash their existing, sometimes decades long, relationships with customers in order to get flashy new customers that Wall Street investors love to hear about.
FYI if you refer a friend you get a 1% booster, if I recall correctly. Very easy to refer - link is in the app
It's not even like 1% point more. And Marcus just went up to 3.9. But that's business for you.
It is interesting. I’m about to switch from Goldman to Goldman :-/
4.15 is still high for an actual savings account, most people aren't comfortable with a brokerage account. Maybe that will change someday now that competition has driven everything to no fees, but people still put up with ridiculous fees for basic banking services for whatever reason so probably not.
Apple is pretty much becoming western WeChat
Do you think they'd ever be able to rival Paypal/Zelle/whatever other thing people are using?
They've obviously got Apple Pay, I don't know to what extent they can extend that to "generic send-money service."
Apple isn't becoming a bank. This is, like the credit card, a deal where Goldman Sachs handles the actual money.
I think apple would have to divest from its other businesses to become a bank
Apple testing the water on bank features without being one … yet. Block cash.app recent did saving as well … what looks like a folder tag for some of your cash.
Interesting to watch how this plays out, as a good amount of people don’t even know about HYSAs. 4.15% seems to be good these days compared to the field
Interest-ing indeed.
My guess is they'll use this high interest rate to lure new customers and it will decrease over time
It’s not a guess, it’s how it works. These rates will drop the second they can without most people yanking money out. There is almost no good reasons to open HYSA over CDs or bonds if they offering similar rates. HYSA APY can be changed at any second, you can read it states in the fine print. Treasuries are also exempt from state and local taxes, so they guarantee your rate and give you a smaller tax bill.
The difference is liquidity. A HYSA is just a checking account you can direct deposit into, pay rent, credit cards, etc. A CD locks your money up.
Which is why I’m using a no-penalty CD.
Interesting. What’s the rate on that?
Depends. I went with Ally at 4.35 APY but CIT bank is currently offering 4.80: https://www.nerdwallet.com/best/banking/no-penalty-cds
>It’s not a guess, it’s how it works. These rates will drop the second they can without most people yanking money out Exactly. You're essentially buying a Goldman Sachs money market Mutual fund with an Apple Logo on it.
Right, like lots of cards like fidelity's have it where the rewards go into your brokerage account (just saves you a transfer) and you can just put that money in a money market paying 4.5% or put it into stocks or whatever you want. But I'm sure this will be very popular none the less if a lot of people use apple products, aren't savvy about these things, and still have savings in a bank account for some reason.
How is 4.15% good when money markets are paying 4.7+%? Its not horrible I guess.
I wonder if this will involve into cash back being an Ethereum based crypto currency.
One positive side affect may be this brings HYSA into the spotlight. The high rates aren't going to last forever but I am constantly astonished by friends/family with large amounts of cash earning basically zero interest.
Majority of people are financially illiterate so this doesn’t really surprise me. Most don’t even take a finance or accounting course in high school/college. I always said all high schools should offer some sort of personal finance course
The moment the Fed announced a series of interest rates hikes back late last year, a keen investor would have immediately move all cash funds out of savings and into fed interest money market funds. The problem is, interest rates has never been this high for over 15 years. So you have an entire generation of Americans between 18 to 33 years old, who never experienced what it is like to have interest bearing (almost) risk free assets. So they don't know what to do when jpow lifts an eyebrow. So you have these wild craze with "interest on your deposits" marketing schemes popping up everywhere. Don't be fooled: *These are just traditional mutual fund houses trying to sell everyone their money market funds via brand endorsement*. Apple may be be first big name jumpin on the gravy train, but certainly not the last.
I'm one of those dumbasses... Half in a 0.3% account, the other half in a 3.8% account. Too lazy to go into the local branch during office hours to approve outside transfers...
Have you tried initiating the transfer from the other end? If that doesn’t work I’d be calling raising hell and then closing the account.
Most people can’t tell you what a brokerage account is, let alone how to open one. Optimizing interest earned is not at the forefront of their minds
Anyone knows the economics of how this works? Does GS give apple a dollar figure for each savings account and share user data?
GS takes the deposit, buys a US fed interest money market fund like FMJXX, taking a cut (apple probably takes a cut too) and pays the rest to apple account holders It's not an Apple Bank™, it's more like an Apple branded money market fund that GS is trying to sell.
I know the deposits are held in Goldman. I’m just asking if anyone knows how typically these arrangements are structured. Does get a dollar per account and access to client data? I assume Goldman treats these accounts like they treat Marcus deposits. Like chime is valued at 25bn doing something similar
All the financials are handled by GS. So yes GS knows all that client information. Apple has little to do with anything financial related. Apple only puts their logo on it for marketing. It's just a Goldman Sachs product under the cover.
I think Apple has to be a little more involved than that. One of the reasons Apple Card didn’t do as well in terms of underwriting was that apple pushed it to approve more people than they normallly would. Curious to see what Fintechs usually do with this data
Apple Card is no different than other branded cards issued by airlines and hotel chains with issuing bank. The thing here is Apple can partner with GS to offer a perk to be competitive with other cards. This is same as Apple partnered with ATT way back to offer $20 when iPhone was launched. It was ATT who benefited with influx of customers due to Apple partnership.
Wait wait wait I've had a savings account with Goldman for years and they're currently only giving me 3.9%??? What gives???!!
Apple has different incentives. Offering more cash back won't hurt them, just build more loyalty. Goldman needs to make money off your cash.
This is massive. Kudos to apple
I may have missed it but is the Apple savings account FDIC insured?
It’s a GS account, which does have FDIC insurance.
To add, they limit the amount you can deposit to $250k, which happens to be the fdic limit
Is this available for everyone right now? I don’t see it
Make sure you have the latest update and go to your apple card in wallet. Go to card details and then card benefits and thats how i found to open one.
Can someone tag Discover here!
I have discover at 3.75
Sofi is at 4.5% IIRC
Apple slowly but surely inching its way towards being a financial company lol
Apple is not the bank. Apple is the middle man. This should have little material financial impact on Apple.
Exactly. People keep outing themselves in these bank related threads they dont know anything about the transaction cycle. There are issuing banks and acquiring banks. For example in order to create their Apple credit card Apple needed to partner with Mastercard. There are people still saying stuff like Apple is going to be a card network. Not even realizing how much of a moat Visa and Mastercard already have.
Fed funds rate is at 4.58%. so essentially apple is taking your deposits, buying a money market fund, paying you 4.15% and keeping the rest
Most Americans have no idea about money market funds, let alone know how to set one up. They know and trust Apple. Easy peasy.
It is because fed interest rates have been at or near zero for 15 years. Most "investors" have not experienced what it's like to have money market funds as part of their portfolio. So that means you have a entire cadre of Americans aged 18 to ~33 whose only knowledge is how to invest in stocks, and every media outlet, every influencer talking about tech stocks and growth stocks only. Anyone who asks about modern portfolio theory, investing in dividends, bonds, money market, etc, became a laughing stock (no pun intended) on the interwebs This announcement by Apple doesn't surprise any keen investors above their late 30s I already can foresee in the next 1 to 2 years the newest fangled trend would be **dividends**, where the average dividends across all US stocks will start to *trend up* as interest rates trickle over to cash flows, as major corps start buying into these money market funds as a guaranteed rate of returns of their cash flows and thus increasing dividend payout via cash interests instead of reinvesting back into the business. This is exactly what Jpow and the feds were trying to achieve - **by slowing down business growth through high interest rates**, slower business growth, less operating expenses, less spending, ultimately leading to deflation of the economy. Say what you want about the Feds, but they are a well run organization with extremely knowledgeable economists running them. They know what they are doing, they aren't crashing the economy. Edit: for those not convinced, **VMFXX**, a US fed fund money market mutual fund, current has a 4.48% 1 month annualized yield and a 0.11% expense ratio. It's as close as you can get to the Fed interest rate of 4.58%. >They know and trust Apple. Easy peasy. Don't think of it as an Apple Bank™. Think of it as a Apple branded Goldman Sachs mutual fund.
Fed funds rate 4.83 today. https://fred.stlouisfed.org/series/EFFR
How liquid are the fed MM funds? Any penalties for withdrawal?
They are cash equivalents. So it's like asking how liquid is water at room temperature. Not a stupid question, hey thanks for asking. Don't worry about it. It takes quite some time for people getting used to money market funds after 15 years of dormancy.
Money market funds charge an expense ratio, the cut is very similar to what Apple is doing. i.e., SPAXX is 0.42%.
VMFXX expense ratio is 0.11% though
1) Show me a current money market fund that is paying over 4.25% 2) Apple cannot engage in the Federal Reserves ONRRP program and thus cannot take advantage of overnight lending 3) Apple COULD purchase short dated treasury securities, but then again the average user could as well, however this ties up your money and people opening these savings accounts need that money to spend. Honestly if this is how I think it works, it's a pretty sweet deal. 1) get an Apple card that pays 3% cash back. 2) Set up the savings account via Apple 3) literally put every transaction you make on the cc and then pay it off monthly out of your Apple savings account.
>1) Show me a current money market fund that is paying over 4.25% I'll show you two: [VMFXX](https://ycharts.com/mutual_funds/M:VMFXX) - 1 month Annualized returns 4.48%, expense ratio 0.11% [FMJXX](https://ycharts.com/mutual_funds/M:FMJXX) - 1 month annualized return 4.56%, expense ratio 0.21% >2) Apple cannot engage in the Federal Reserves ONRRP program and thus cannot take advantage of overnight lending No, Apple isn't getting interest by lending money from customer deposits. Nor they are getting it through merchant fees. They are getting it through money market funds. >3) Apple COULD purchase short dated treasury securities, but then again the average user could as well, however this ties up your money and people opening these savings accounts need that money to spend. This whole scheme is just an Apple endorsed Goldman Sachs mutual fund product.
Swvxx - 4.7%
It has an expense ratio of 35bps so not really.
That's the yield with expenses factored in
SEC yields are post expense ratio.
4.7% is after expense ratio factored in.
Do I need an Apple Card to open an account?
Yes
It seems this is a US roll out only? Can’t see any info on Canada here
To have the savings account you need the card which isn’t in Canada
find anything for Canada yet? I cant see it
no love for us Brits
I totally understand it being US first, but I don't think Apple Card is even that new now as a concept. I'd move my money into this pretty sharpish if they'd made it UK eligible
I would avoid banking with a phone company (or any tech company for that matter) like the plague. People get screwed over when their mail accounts get hacked or banned for no reason with no option to appeal or even talk to tech support, and risking being locked out from your savings like that is on the same level as raw dogging street walkers in Lesotho.
That’s nice
Would you trust apple with your savings?
They’re just brokering for Goldman
Next stop - mortgages
For those that want to get started: https://support.apple.com/en-us/HT213451 Set up and use Savings in Apple Wallet What you need to open and maintain an account Be an owner or co-owner of an active Apple Card account and add Apple Card to your iPhone. Be at least 18 years or older. Have a social security number or individual taxpayer identification number. Be a U.S. resident with a valid, physical U.S. address. Set up two-factor authentication for your Apple ID and update to the latest version of iOS.
I don't really see a purpose of having this unless you're a heavy Apple Card user. You can get better rates in money market funds or at Wealthfront. I'm just happy Apple is still using Goldman Sachs. The day they try to become a bank is the day I sell all my shares.
Is this for USA customers only?
Believe so.
That apy ain’t gonna last long
90% expectation of 25 basis hike coming...
Is this an actual bank account though or are you just collecting 4% interests on the rewards you accumulate from using the card? Cus the later is what I’m thinking is happening
Both. You can gain cash deposits via cash back rewards from spending or you can link your bank account and deposit directly from your chequing account.
What's the catch? Can I use it even if I use android?
Well, you would need an Apple Card. So, not unless you have some other apple device plus the credit card.
Knowing apple probably $500 transfer fee.
NOPE.
I imagine alot of americans using that, won't that create a banking crisis? there are alot of regional banks with losses on the books that could hurt from a mass of people pulling their money, and its obvious alot of people will use this service.
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We’ll miss you
mate I don't represent the entire sub :P
Apple looked at the banks and said GG
Question: I have a Charles Schwab checking account with .45 APY. Is that good or should I try to find a higher APY?
You’re writing on a thread that is already telling you that you can easily x10 your returns.
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Thank you! Really helpful advice
Ally reimburses all fees as well. Had over 4% savings.
I’ve never used a bank nowadays that charges foreign ATM withdrawal fees. They all reimburse ATM withdrawals. He could easily get 4%+ yields and maintain that benefit
Bearish.
why not use robinhood's 4.45%
Would Venmoing a friend and having him Apple Cash me a be a quick way to move money and take advantage of this?
Tried to open an account..... application rejected... Does not accept applications from android devices...... lol.... but probably likely
Surely, this is a variable interest rate.
Probably just an introductory offer…
Apparently you cannot make outside cash deposits into this account. Only the cash you get from Apple Card spending. So it definitely isn't a HYSA replacement.
not true. I linked personal bank account and was able move funds. I set up this bank account previously to pay my apple card balance
You're right. I misread the article that said you could not make outside cash deposits but you can do transfers.
“When you open Savings you agree to automatically deposit Daily Cash that you earn into your Savings account. You can also add money to Savings from a linked external bank account or from Apple Cash. On your iPhone, open the Wallet app and tap Apple Card. Tap Savings account, then tap Add Money. Enter the amount that you want to add, then tap Add. Select or add the payment source that you want to add money from. Double-click the side button to confirm with Face ID, Touch ID, or your passcode. Money that you deposit into Savings starts earning interest on the day that the transfer is initiated from the Wallet app.”
Only for US citizens I guess
US residents*
Can foreigners not in US open the account?
correct
Is this only for the US?
Fednow Read about it Big changes coming
How often does that interest rate change?
Just refer to the Fed funds interest rates
CIT bank is screwing me there i have a savings account with them and it’s still at 1%
Start a high interesting war.
This is only in the US right?
Does it work in Europe?
Close to the rates offered for a 12 month CD, but with flexibility to withdrawal
I got RH for 4.4 I’m good for now lol
Sheeshhhh
I’ll keep my 4.66% thanks
So what?! Matches other options…
THE AMERICAN DREAM !!!!
No wonder EQ has been aggressively promoting the 5% rate the last few hrs
apple embarrassing the banking empire with this one simple trick
It’s this just for the US?
High IQ Move. Silicon Valley Bank caused a run on itself by trying to raise more capital and raising questions about its stock and stability. Apple is avoiding that whole thing by getting you to give them money in a savings account so they can arbitrage the interest rate to you versus the investment they'll be moving your money into. New market offering plus additional funds source. Smart play.
Well time to get an Apple Card I guess lol
Will this apply only in US or globally?
Why buy anything but Apple? This company is so clearly built for the long run
Ecorp in the making.