Apple’s newly launched high yield savings account has attracted nearly $1 billion in deposits within its first four days of operation, according to sources familiar with the matter. On the day of its launch, the account received approximately $400 million in deposits, with roughly 240,000 accounts opened by the end of the launch week. The savings account, which offers a 4.15% annual return, is provided through a partnership with Goldman Sachs Bank USA, significantly higher than the 3.90% return offered by Goldman’s own Marcus high yield savings account.
The account’s impressive annual return, combined with the widespread use of iPhones, is believed to be the main driver for its rapid growth. Apple’s savings account is entering a fiercely competitive market, as financial institutions scramble to attract and retain deposits amid a series of bank failures. First Republic Bank is the latest institution to fall victim to the crisis, with the bulk of its assets, including $92 billion in deposits, being acquired by JPMorgan Chase.
Apple’s high yield savings account is exclusive to Apple Card holders, allowing them to open an account in under a minute directly from their iPhone. The account’s “daily cash” rewards are automatically directed into the high yield account, and clients can monitor their balance and interest earned through an integrated dashboard in Apple’s digital wallet. Apple High Yield Savings accounts are limited to the $250,000 FDIC insurance limit.
The introduction of Apple’s high yield savings account has put pressure on traditional banks struggling to maintain net interest margins following the Federal Reserve’s massive interest rate hikes. While many digital banks and fintech companies offer competitive high yield products, Apple and Goldman Sachs may have an edge due to the seamless user experience and iPhone integration offered by their savings account.