The news: Apple and Goldman Sachs teamed up to offer Apple’s credit card customers high-yield savings accounts, according to a press release.
Here’s how the savings accounts work:
- Apple card users can earn “Daily Cash” credit card rewards that will automatically deposit into savings accounts with no fees, no minimum deposits, and no minimum balance requirements.
- Users can also deposit extra funds into their savings accounts through a linked bank account or from their Apple Cash balances.
Apple did not disclose what the interest rate on the new accounts would be.
What this means: Apple’s savings feature highlights its growing personal banking ambitions, which include reported plans for a suite of financial services dubbed “Breakout.”
The rollout will also be a welcome relief for Apple after it delayed launching its BNPL product and faced anti-competition allegations from rival payment firms regarding the near-field communication (NFC) tech in the iPhone. The savings accounts can help Apple Card grow its user base, which hit 6.4 million cardholders in May last year, per Cornerstone Advisors.
- Almost one-quarter of US cash-back credit card users said daily cash-back rewards were an “extremely valuable” feature, per Insider Intelligence research.
- High-yield savings can help build relationships with money-conscious consumers. This could lure in younger customers, who are especially attuned to such features: 99% of millennials and Gen Z consumers said saving money is important, per Travis Credit Union.
But credit cards tied to savings accounts are hardly a new feature, and Apple will be entering a saturated market. And with no indication of what those interest rates will be, it’s unclear whether those yields will be enough to set Apple Card apart from rivals.
