It's a benefit of the Apple Card within Apple's Wallet app. There is no other way to access your apple wallet other than the app. You might be able to access savings via a Mac since there is desktop access to apple wallet. I'd have to verify its possible once I get home to my machine.
Now you don't need an iPhone to use and pay on an apple card[1], but currently I don't see any way of accessing the savings account on the card website. Not that you would want to use an Apple Card without an iPhone anyway because using the card gives you less money back. (1% vs 2% or 3%)
Even as someone with many Apple products, this card and account have no appeal to me. I see no reason to chain my credit card together with my gadget maker. There are way too many good financial products that aren’t chained to a particular gadget maker. I’m not the target market I guess.
That's because interest rates have been historically low for a generation. Now they are climbing, so yields are rising. Nothing conscionable or unconscionable about it.
Inflation rates were unconscionably low. The comments seem to think Apple is doing something revolutionary here. I'm making 4% on my savings accounts now, too. Nothing special here.
> it's not really reasonable to compare this one to it, no?
Are the fees, minimums, limits and rate structures similar? If so, then the inflation thing is irrelevant. They either beat it or don't, but at the end of the day, you're still comparing who has the better APY and what not regardless of that differential on inflation.
If HYSA's (which this is, by reasonable metrics and their own definition) beating Inflation is important to you, that's a separate discussion to be had first before shopping specific offerings, as that's a discussion of a systemic problem and if HYSA's are relevant to you at all in the first place. Hot tip, in high inflationary markets like today, HYSA's don't beat inflation.
Several other financial institutions offer similar or higher yields with higher FDIC insured limits (eg Betterment's cash reserve), with the additional advantage that the account isn't locked to a particular hardware vendor.
You state that as if savings accounts ever paid better than inflation. And in nearly a half-dozen decades of walking this Earth, I don't recall ever seeing that happen. Of course a savings account pays below inflation, it's about as risk-free as money storage gets. You want better returns? Go with something that carries more risk.
The saddest part of bank interest is that on top of it lagging inflation, but also gets taxed aggressively making it effectively lag by inflation by an even wider margin! Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise. I just hate debt personally, part of my upbringing. But I wonder if there's some reit or low fee investment vehicle that makes it easy to take advantage of this dynamic while still being able to sleep at night. Any ideas?
Yes, the dynamics of a 30 years mortgage are what I'm looking for, but turn-key. Because purchasing a property and getting a mortgage is a huge hassle up front and requires tons of work for many years. Compare this to buying a publicly traded security which requires the click of a button to purchase, and retrieving the tax slip each year.
> Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise.
With mortgages at over 6% and personal loans at 8-9% (according to my local credit union) I'm not sure if it's that much better and if deductions would offset high interest rates, but it's definitely a nice kickback.
Mortgage debt shouldn't prevent you from sleeping at night. You can live inside your investment, and the purchasing power of the money you borrowed just decreases over time. The way you go astray is to take on too much debt (everyone buys way too much house) or to choose exotic loan products that sound cheap today, but aren't. (2008 seemed to kill most of those off.)
As with anything, approach it rationally. Is there a home you want to buy, and can you put 20% down today, and can you afford the monthly payments + property taxes + insurance + random repairs that you'll have to make? If so, it's not a bad investment; after all, you have to live somewhere. As with any investment, there is some risk. Your neighborhood could become bad. The entire house could be supported only by dead termites. But most of the time, the horror scenarios you read about don't happen; you enjoy living there, and sell it some years down the road for well more than you paid into the loan. It's worth considering over pure investment vehicles; you can't live in an ETF, and there are no tax breaks.
You don't know what the inflation rate will be over the next 12 months. You do know what your savings account yield will be (well, until it changes). There's I bonds and TIPS if you want a hedge against inflation.
There's an interesting YC co addressing the interest rate difference between banking + investment accounts. They basically add checking account functionality on top of auto-investing:
This is a step in the right direction, and personally I think that low-level deposit accounts are ripe for serious competition. There are thousands of banks and credit unions (~9,000 if memory serves) all offering the same risk-free product, but the rates and fees can be wildly different.
The FDIC publishes some decent statistics about average yields for various deposit products.[0] As of March 2023, the national average for savings accounts was 0.37%. The largest banks (Wells, BoA, Chase, Citi) offer 0.01% interest. That's 1 penny for every $100 you loan them.
That low rate made sense when the federal funds rate was low as an incentive for banks to borrow from consumers rather than the government. But now the rate is almost 20x more than it was a year ago, so there's a larger incentive for banks to borrow from consumers.[1] This should drive more competitive rates offered for consumer deposits.
If you're earning less than 1% APY on your checking and savings account and have $1000 in it, spend an hour researching an alternative. Going from 0.01% to 1% alone would earn you $10 more per year on that amount. If you have $10k, that's an extra $100 for maybe an hour of your time.
On a related note, I'm part of a team working on a service to monitor all the deposit rates across all financial institutions in the US in real time. If you're interested in learning more or signing up for the alpha launch (targeting Summer 2023), shoot us an email at bankrank.alpha@gmail.com
There is a reason the other banks do not offer more: A great deal of that money is locked up in long term, low interest assets. What do you think will happen if people try to take their money elsewhere?
If people take their money elsewhere, the banks can borrow from the fed, just at a higher rate. So in theory, they should be willing to increase their rate up to whatever the fed-rate is, minus some margin for the risk of dealing with lower sums of deposits.
There's a direct correlation between advertising spend and interest yields on deposit accounts, which is somewhat interesting. It seems like the optimal business model is to focus more on customer acquisition than customer retention, because these products are very sticky. Churn rate for deposit accounts is like 8%, which is crazy given the rate variance.
Banks can not borrow from the Fed arbitrarily. If people take their money elsewhere en masse, the banks fail. That is what happened to SV bank, for the same reason. If anything, you can argue the Fed can save all the banks, which is true, but undesirable.
There is a good reason other banks do not offer more. Their customers aren't savvy enough to find a less well marketed consumer bank, so they don't have to pay more. That's called profit my friend.
I was holding a considerable sum for several months while putting offers on a house. TD Bank started contacting me proactively to sell me awful 'wealth management' services as soon as the wire hit my bank account. I asked if they could give me a better savings rate than <1%. They declined. I went with a credit union that was offering ~5% APY introductory offers. I netted $10k in interest over several months by transferring away from a major bank. I highly recommend it.
+ Ability to invest in money market, treasury, or bonds directly from the account. And able to get someone on the phone to schedule recurring actions (e.g. ladders)
+ Decent "checking"-like features (ATM cash withdrawal with fee reimbursement, autopay, check deposit)
Essentially the only things it can't do are (1) Zelle & (2) deposit cash.
If those aren't needs you have, don't think there's a better solution with less effort.
Vanguard unfortunately got rid of its similar Advantage offering a few years ago. I hate now having two separate accounts at Vanguard—Cash Plus (essentially a high-yield savings account) and brokerage with sweep—yet neither offering checkwriting, when with Advantage I had sweep (with very competitive return) and checkwriting in one place.
It's 0.25% higher than the rate they pay for Marcus. I've been a Marcus customer for a few years, and the rates consistently go up (and down) after the Feds change their rates.
Why is the Apple rate higher than the Marcus rate? It could be a higher intro rate, but there's no indication that that's the case. My guess is that they can afford to give an extra 0.25% because they don't need to spend any money on customer acquisition/marketing costs.
Marcus and Betterment often go back and forth on who provides the higher rate. Right now Betterment is 4.2%, so the rate that Apple/GS is providing isn't outrageously high, it's potentially a real rate that can be sustained. It's only outrageously high compared to the 0.01% that many big banks offer.
Also, and I'd guess this a key thing, is that if you're using an Apple credit card, your cash-bask rebates are auto-deposited into the Apple Savings account. Since GS is the issuer is the card, they're keeping that money instead of paying it out to you.
Marcus has a 10mth no-penalty CD promo right now at 5.05APY. So, it's not like there's no precedent for doing promo rates like this. This is just a promo.
I got an Apple Card and used it for all of 2022. Then I went to do my taxes and tried to download a CSV of all my transactions and found that you can only pull it down one statement at a time!
Thanks Apple for making tax time just a bit more painful...
Better than Amazon that removed the ability to do any csv exports of orders or transactions sometime between when I prepared tax year 2021 and tax year 2022.
Yes - I now have an amazon policy where each item is one transaction. Then I have to go through the whole year 10 at a time. Yet another mind blowingly bad customer experience. I am getting closer and closer to ditching my Prime account...
That would be strange imo because there are obviously far more advantageous business cards out there. The only reason I could maybe imagine someone using the Apple Card for business is to get 3% back on hardware purchases.
I agree but for many people optimizing credit card spend is not worth their time, especially if you’re just spending a few thousand per year on a side hustle.
There are plenty of reasons one might want a csv, though.
I had the same exact situation. I used the Apple card almost exclusively in 2022 because of the 1% card + 2% apple pay rewards.
Doing taxes right now and I spent about 10 minutes manually exporting+emailing OFX/QFX files to myself for Quicken. Kind of a pain. Every other card I have supports automatic data pulling.
Probably will move my main card to something that has automatic integration.
Most people don't even know what a bond is. This is enticing for the average person who has an iPhone, and just wants a better savings rate than the laughable big banks currently at 0.01%.
I'm one of the people my sibling comments talks about - I barely know what a bond is.
But are bonds liquid? Part of the appeal of a savings account is that it's still cash you can spend immediately by check/debit/cash with no need to sell/transfer to an account.
I agree that a 4% savings account is not a good way to invest money - but that's why I don't think they're comparable to bonds.
You could be right but that doesn't explain why the yield to maturity is reported so low.
The yield to maturity should be the earning you get if you hold the fund until maturity and interest rates stay as they are today. It's possible Ishares is not reporting this number accurately.
They own T Bills, so the yield you get is the same as on the T Bill. Any difference is from the management fee (0.05%) or due to T Bills that haven’t matured yet which don’t reflect current rate.
There are different ways of measuring a fund’s yield, but at the end of the day this is mechanically how this fund works.
I guess to answer your question of why not get bonds - they just aren't comparable. One's effectively an investment that requires multiple steps to be used to purchase that expensive computer monitor on amazon, and the other you just select your payment to be a debit card and click purchase.
T-Bills sound relatively liquid, but a savings account still beats it at the cost of 1% interest (assuming 5% for the bonds).
Sure, though anybody with a moderate networth should have their money in a brokerage or other assets rather than savings/checkings. For many reasons.
If you’re living paycheck to paycheck and need to move money around to make small purchases, then it’s not for you, yeah. Money market funds are for savings, not money that will be imminently spent. But then so are savings accounts at banks (vs Checking accounts)
> But then so are savings accounts at banks (vs Checking accounts)
Yeah this is the part that I'm confused about because I think that savings accounts are federally restricted to 6 withdrawls a month? I could be completely wrong on that.
But yeah the target audience for this IMO - people who have maybe a few thousand saved up that they keep for emergency funds or semi-hot money for larger purchases. which matches the target iphone audience I think pretty well.
I bet they restricted accounts to less then 250k because they don't want to bother splitting it across banks when the target audience would be expected to only have several thousand.
Because bonds change value when interest rates change.
You buy a bond paying 3%, bond yields go up to 4% and you want to sell your bond, it will be less than the face value you bought it for. This isn't an issue if you want to keep it to maturity. But that's what SVB (and others) did and that creates its own problems.
If you're buying bonds, you're either parking money for a long time or you're betting on interest rates going down.
Exactly this. I had a bunch of cash sitting in a Marcus account until I discovered I can just buy ICSH[0] and get another 50~100 bps by doing what the banks do - which is taking your deposits and buy bonds.
This Apple savings account will likely go down over time. Any time new branded savings accounts are marketed they always put super high returns to foster deposits and then they slowly trickle them down to a mean value that sits somewhere between 50~100 bps from what you get from a money market play.
ICSH is an ultra-short bond fund with average duration of 0.42 years. So very little duration risk.
That said for the GP it’s only slightly more work to buy actual treasury bonds. Hold them to maturity and there’s no risk of losing money from interest rates going up. You know exactly what you’re getting and when. And if interest rates drop suddenly you can decide if you want to sell the bond and take a gain.
I remember saying years ago that the difference between Apple and Google is that Apple will do fewer things but will be more committed to them. As soon as Apple Pay came out and people kind of laughed it off, I thought (and said) that Apple will slowly plug away at it, adding new countries and banks incrementally and at some point you'll look up and realize Apple owns a massive electronic payment ecosystem.
I've had an Apple card for awhile and have found myself using it more and more just because it's convenient. Not having to enter CC details into every app and instead just double clicking the side button to pay for something is incredibly convenient.
Personally I have way more confidence in Apple's ability to manage a pool of depositor funds than I do for pretty much any bank.
Yep, most of my purchases today are using ApplePay and it's like magic that the button appears and I can just press it, choose my shipping address and card, and be done with the purchase.
I'm a little paranoid about putting my cash in the Apple ecosystem. The easy-to-use functionality actually makes me uncomfortable when it comes to banking. Here in NYC there's been news stories of muggers/thieves using Face ID (by force or drugging the victim) to access banking and payment apps, siphoning off money in bulk. There's something useful about having a middle man with limited functionality managing payments and deposits. Given the risks, I'd rather not participate in the "whole-life-in-the-phone" lifestyle.
*plus there's other banks offering comparative rates
I’m also concerned about the the iPhone passcode problem. You can change the password on someone’s Apple account with only the passcode. There’s no prompt to enter the old password at all.
Apple’s iPhone Passcode Problem: Thieve’s Can Ruin Your Entire Digital Life In Minutes | WSJ
I've heard a lot of people in the USA are "unbanked". I'm willing to bet a fair share of those people have an iPhone (if not necessarily a top-of-the-line one). Does this make it any easier to get an account? Or do you still have to jump through hoops. (not US citizen so I have limited knowledge of getting banking there).
not really, you need to have an Apple-branded credit card to even apply for this. I don't think it's particularly difficult to get an Apple Card but if you have lousy credit this doesn't make anything easier for you.
On r/AppleCard there's a fairly consistent stream of people (often college students?) with their first credit card. The Path to Apple Card opens it up for a lot of people with poor or no credit history - people with credit limits of $1000 to $2000 (there are even some at $500 - https://www.reddit.com/r/AppleCard/comments/mwg9bn/this_is_m... ).
It gives people who are poorly banked an option to save in a higher yield account than what they may have with a big bank. One of the things that Apple Card does better than others is show that information about how much you're spending. With the savings account, showing that you are saving money can be useful in knowing that you've got it and its change over time (compared to logging into a bank that you otherwise rarely interact with).
103 comments
[ 2.5 ms ] story [ 157 ms ] threadNow you don't need an iPhone to use and pay on an apple card[1], but currently I don't see any way of accessing the savings account on the card website. Not that you would want to use an Apple Card without an iPhone anyway because using the card gives you less money back. (1% vs 2% or 3%)
[1]https://card.apple.com/
This year's inflation might be below 4.15% (not sure what the projections are)
Are the fees, minimums, limits and rate structures similar? If so, then the inflation thing is irrelevant. They either beat it or don't, but at the end of the day, you're still comparing who has the better APY and what not regardless of that differential on inflation.
If HYSA's (which this is, by reasonable metrics and their own definition) beating Inflation is important to you, that's a separate discussion to be had first before shopping specific offerings, as that's a discussion of a systemic problem and if HYSA's are relevant to you at all in the first place. Hot tip, in high inflationary markets like today, HYSA's don't beat inflation.
With mortgages at over 6% and personal loans at 8-9% (according to my local credit union) I'm not sure if it's that much better and if deductions would offset high interest rates, but it's definitely a nice kickback.
As with anything, approach it rationally. Is there a home you want to buy, and can you put 20% down today, and can you afford the monthly payments + property taxes + insurance + random repairs that you'll have to make? If so, it's not a bad investment; after all, you have to live somewhere. As with any investment, there is some risk. Your neighborhood could become bad. The entire house could be supported only by dead termites. But most of the time, the horror scenarios you read about don't happen; you enjoy living there, and sell it some years down the road for well more than you paid into the loan. It's worth considering over pure investment vehicles; you can't live in an ETF, and there are no tax breaks.
Be careful investing on things/markets you don't fully understand.
https://nexushq.com
I have no financial interests in them, but I'm a happy customer. I like using it to make float on cash in between tax payments and other obligations.
The FDIC publishes some decent statistics about average yields for various deposit products.[0] As of March 2023, the national average for savings accounts was 0.37%. The largest banks (Wells, BoA, Chase, Citi) offer 0.01% interest. That's 1 penny for every $100 you loan them.
That low rate made sense when the federal funds rate was low as an incentive for banks to borrow from consumers rather than the government. But now the rate is almost 20x more than it was a year ago, so there's a larger incentive for banks to borrow from consumers.[1] This should drive more competitive rates offered for consumer deposits.
If you're earning less than 1% APY on your checking and savings account and have $1000 in it, spend an hour researching an alternative. Going from 0.01% to 1% alone would earn you $10 more per year on that amount. If you have $10k, that's an extra $100 for maybe an hour of your time.
[0] https://www.fdic.gov/resources/bankers/national-rates
[1] https://fred.stlouisfed.org/series/fedfunds
---
On a related note, I'm part of a team working on a service to monitor all the deposit rates across all financial institutions in the US in real time. If you're interested in learning more or signing up for the alpha launch (targeting Summer 2023), shoot us an email at bankrank.alpha@gmail.com
There's a direct correlation between advertising spend and interest yields on deposit accounts, which is somewhat interesting. It seems like the optimal business model is to focus more on customer acquisition than customer retention, because these products are very sticky. Churn rate for deposit accounts is like 8%, which is crazy given the rate variance.
+ Excellent wire and ACH support
+ Ability to invest in money market, treasury, or bonds directly from the account. And able to get someone on the phone to schedule recurring actions (e.g. ladders)
+ Decent "checking"-like features (ATM cash withdrawal with fee reimbursement, autopay, check deposit)
Essentially the only things it can't do are (1) Zelle & (2) deposit cash.
If those aren't needs you have, don't think there's a better solution with less effort.
WTF is going on?
Why is the Apple rate higher than the Marcus rate? It could be a higher intro rate, but there's no indication that that's the case. My guess is that they can afford to give an extra 0.25% because they don't need to spend any money on customer acquisition/marketing costs.
Marcus and Betterment often go back and forth on who provides the higher rate. Right now Betterment is 4.2%, so the rate that Apple/GS is providing isn't outrageously high, it's potentially a real rate that can be sustained. It's only outrageously high compared to the 0.01% that many big banks offer.
https://www.marcus.com/us/en/savings/no-penalty-cds
Best no penalty cd I've found is 4.80 @ CIT bank, which is funny enough...ex SVB.
https://www.cit.com/cit-bank/bank/cds/no-penalty-cd
Thanks Apple for making tax time just a bit more painful...
There are plenty of reasons one might want a csv, though.
Message support. They’ll send a bulk-download link.
Doing taxes right now and I spent about 10 minutes manually exporting+emailing OFX/QFX files to myself for Quicken. Kind of a pain. Every other card I have supports automatic data pulling.
Probably will move my main card to something that has automatic integration.
But are bonds liquid? Part of the appeal of a savings account is that it's still cash you can spend immediately by check/debit/cash with no need to sell/transfer to an account.
I agree that a 4% savings account is not a good way to invest money - but that's why I don't think they're comparable to bonds.
The fund will lag Fed hikes by a few months, but otherwise will yield the same as buying T-Bills directly.
Using trailing distribution data to compute yields will not work for a T-Bill fund in the middle of a Fed hiking cycle.
The yield to maturity should be the earning you get if you hold the fund until maturity and interest rates stay as they are today. It's possible Ishares is not reporting this number accurately.
There are different ways of measuring a fund’s yield, but at the end of the day this is mechanically how this fund works.
I guess to answer your question of why not get bonds - they just aren't comparable. One's effectively an investment that requires multiple steps to be used to purchase that expensive computer monitor on amazon, and the other you just select your payment to be a debit card and click purchase.
T-Bills sound relatively liquid, but a savings account still beats it at the cost of 1% interest (assuming 5% for the bonds).
If you’re living paycheck to paycheck and need to move money around to make small purchases, then it’s not for you, yeah. Money market funds are for savings, not money that will be imminently spent. But then so are savings accounts at banks (vs Checking accounts)
Yeah this is the part that I'm confused about because I think that savings accounts are federally restricted to 6 withdrawls a month? I could be completely wrong on that.
But yeah the target audience for this IMO - people who have maybe a few thousand saved up that they keep for emergency funds or semi-hot money for larger purchases. which matches the target iphone audience I think pretty well.
I bet they restricted accounts to less then 250k because they don't want to bother splitting it across banks when the target audience would be expected to only have several thousand.
You buy a bond paying 3%, bond yields go up to 4% and you want to sell your bond, it will be less than the face value you bought it for. This isn't an issue if you want to keep it to maturity. But that's what SVB (and others) did and that creates its own problems.
If you're buying bonds, you're either parking money for a long time or you're betting on interest rates going down.
This Apple savings account will likely go down over time. Any time new branded savings accounts are marketed they always put super high returns to foster deposits and then they slowly trickle them down to a mean value that sits somewhere between 50~100 bps from what you get from a money market play.
As of 4/13 30-day SEC yield on ICSH is: 4.92%
As of 4/17, Marcus HYS is: 3.90%
[0] - https://www.ishares.com/us/products/258806/ishares-liquidity...
ICSH is an ultra-short bond fund with average duration of 0.42 years. So very little duration risk.
That said for the GP it’s only slightly more work to buy actual treasury bonds. Hold them to maturity and there’s no risk of losing money from interest rates going up. You know exactly what you’re getting and when. And if interest rates drop suddenly you can decide if you want to sell the bond and take a gain.
https://phatwalletforums.com/topic/109/best-nationally-avail...
I've had an Apple card for awhile and have found myself using it more and more just because it's convenient. Not having to enter CC details into every app and instead just double clicking the side button to pay for something is incredibly convenient.
Personally I have way more confidence in Apple's ability to manage a pool of depositor funds than I do for pretty much any bank.
*plus there's other banks offering comparative rates
Apple’s iPhone Passcode Problem: Thieve’s Can Ruin Your Entire Digital Life In Minutes | WSJ
https://youtu.be/QUYODQB_2wQ
It gives people who are poorly banked an option to save in a higher yield account than what they may have with a big bank. One of the things that Apple Card does better than others is show that information about how much you're spending. With the savings account, showing that you are saving money can be useful in knowing that you've got it and its change over time (compared to logging into a bank that you otherwise rarely interact with).
Also if you're unbanked, a savings account isn't going to be your first step. It will be a checking account with an ATM/debit card.