Apple’s ongoing push into financial products and services, including its new high-yield Savings account with Goldman Sachs, could spell trouble for regional banks trying to retain deposits amid the banking system’s recent distress and rising interest rates.
Lyle Niedens for Investopedia:
Last month, Apple extended its foray into finance by launching a high-yield savings account allowing Apple Card users to store their daily cash rewards in a Goldman Sachs savings account offering an annual percentage rate of 4.15% — more than 10 times the national average.
In recent weeks, some bank customers have grown skittish about depositing money in the U.S. banking system, whose foundation recently has exhibited its widest cracks since the global financial crisis. “A bank’s greatest vulnerability is a loss of confidence, bank culture is defined by stability, prudence, and governance,” Michael J. Hsu, Acting Comptroller of the Currency, said on Wednesday.
For its part, Apple’s timing has proved impeccable. The company’s brand loyalty and consumer confidence is unmatched. People are actively on the hunt for the best high-interest savings accounts, and Apple’s new savings account option attracted almost $1 billion in deposits in its first four days; $400 million in its first day.
In April, U.S. savings deposit accounts yielded an average of just 0.39%, according to Federal Deposit Insurance Corporation (FDIC) data.
MacDailyNews Take: We’ve already moved money out of regional bank savings accounts and into Apple Savings FDIC-insured accounts. It’s a no-brainer.
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