Apple Savings Account: $1 bn deposits in just 4 days, $10 bn in just 3 months; why Apple's new service is making waves

Apple may have become the world’s most valuable company on the back of its tech offerings, but its foray into financial services continues to be just as successful. Apple recently announced that the Apple Card’s high-yield Savings account powered by Goldman Sachs reached over $10 billion in deposits in just 3 months.

While technically Apple is not a bank, the Cupertino-based tech giant made its foray into the financial sector four years ago with the launch of its Goldman Sachs-issued credit card, the Apple Card.

What is the Apple Savings Account?

Launched in April, the Apple Card Savings Account is a high-yield savings account with no minimum balance requirements, no lock-in periods, and no fees. The bank account offers an Annual Percentage Yield (APY) of 4.15 per cent. The account is available to all customers of Apple Card, which is also issued by Goldman Sachs.

Why is the service so popular?

The high APY is one of the major draws for most customers, with the interest rate being 10 times higher than the national average in the United States. For instance, the largest banks in the country offer savings accounts whose APY hover between 0.02 per cent and 0.05 per cent. The savings account, which is essentially the Marcus savings account from Goldman Sachs in a different look, even beats the interest rate offered by most major banks in India.

Another significant reason for the popularity of the card is its integration into the Apple Card ecosystem. Apple’s credit card offers unlimited cashback on all purchases to customers in the form of Daily Cash. Importantly, customers can choose where the 3 per cent cashback goes as it is immediately credited to their accounts. As a result, many customers choose to deposit their cashback immediately into their high-savings account so that it can start earning interest. Apple reported that 97 per cent of its savings customers choose to directly deposit their daily cash into their high-yield savings account.

Apple’s push to finance

A credit card and a savings account are not the only financial services that Apple offers. The trillion-dollar company had introduced a Buy Now Pay Later service earlier as well. The company aims to not only give another reason for its iPhone and iOS customers to remain within its ecosystem. At the same time, the company aims to use its significant brand reputation to start functioning as a neobank that can draw customers with significant benefits. How far Apple continues to take its push into finances will remain to be seen over the next couple of years.