Apple Card Savings Account Receives Another Interest Rate Cut

[MacRumors]

The Apple Card's high-yield savings account received an interest rate cut overnight, the second time it has done so this year.

The Apple Card savings account's annual percentage yield (APY) dropped from 4.4% to 4.25%, in line with the US Federal Reserve approving an aggressive rate cut of 50 basis points last week. Push notifications regarding the cut were sent to Apple Card users on Tuesday evening.

When the Apple Card's savings account first became available, it offered an APY of 4.15%. The rate then increased three times, first to 4.25%, then to 4.35%, and finally to 4.5%, before being lowered to 4.4% in April 2024.

Apple introduced its savings account in April 2023, partnering with Goldman Sachs. Designed for Apple Card holders, the account is exclusively available to U.S. residents aged 18 and above. It can be managed through the iPhone's Wallet app, offering a user-friendly experience with no fees, minimum deposits, or balance requirements.

The account allows users to earn interest on their Daily Cash cashback balance, as well as on funds transferred from linked bank accounts or Apple Cash balances. Initially capped at $250,000, the maximum balance has since been increased to $1,000,000, providing more flexibility for high-value savers.

Opening an account is straightforward. Users simply need to access their Apple Card in the Wallet app, tap the three-dot menu at the top of the screen, select Daily Cash, and then choose the option to set up savings. This process integrates seamlessly with the existing Apple Card interface.

It's worth noting that Goldman Sachs has reportedly indicated plans to end its consumer lending partnership with Apple. However, the potential impact of this change on Apple Card holders remains uncertain at this time.

Article Link: Apple Card Savings Account Receives Another Interest Rate Cut

 

[Sheepish-Lord]

Was only a matter of time. It took awhile for their HYSA to hit as high as it did then when most companies came down GS stayed high. Basically falls in line with companies like AMEX and no, I don't consider HYSA that require direct deposit, referrals, or other "gotcha" criteria like Sofi as comparable.

 

[spaxxedout]

Even though the Goldman / Apple relationship is coming to the end, I hope it serves as a model for the future. Apple handling marketing and UX for banks is a good idea.

 

[Eriamjh1138@DAN]

This rate cut is expected.

 

[gsmornot]

It’s still much better than a traditional savings account for parked funds.

 

[james2538]

Even though the Goldman / Apple relationship is coming to the end, I hope it serves as a model for the future. Apple handling marketing and UX for banks is a good idea.

Maybe pushing them to be a little more secure too. Getting really tired of SMS 2-Factor being the peak of financial security (and not even all my accounts have that yet).

 

[MaxBurn]

If you have trouble managing money and need to move it to a savings account as a middle ground this is better than nothing.

But honestly savings accounts are a ripoff IMO, I've yet to see one that has a rate that can stay ahead of that periods current inflation. I'm comparing any historical month inflation vs that months savings account rates, not the long term averages. It can slow the bleeding of actively losing money but that's about it. I'm also convinced the federal posted inflation rates are very flawed data, on purpose because it suits politically. Get your real inflation data elsewhere based off of what YOU buy.

I don't like it but you pretty much have to have your money in the market somewhere to stay ahead of inflation. If you need to get your money out it generally only takes a couple days to sell something in your money market account and ACH transfer to checking.

 

[CalMin]

If you have trouble managing money and need to move it to a savings account as a middle ground this is better than nothing.

But honestly savings accounts are a ripoff IMO, I've yet to see one that has a rate that can stay ahead of that periods current inflation. I'm comparing any historical month inflation vs that months savings account rates, not the long term averages. It can slow the bleeding of actively losing money but that's about it. I'm also convinced the federal posted inflation rates are very flawed data, on purpose because it suits politically. Get your real inflation data elsewhere based off of what YOU buy.

I don't like it but you pretty much have to have your money in the market somewhere to stay ahead of inflation. If you need to get your money out it generally only takes a couple days to sell something in your money market account and ACH transfer to checking.

Theres some good advice here but the challenge for most people is that money in the markets needs to be actively managed. It’s not difficult but it’s not a passive thing. If you’re like me, you can hire a professional but they take a cut of your gains.

You also need to be able to tolerate down cycles. I had 7-figure paper losses in the last market crash. They have all since recovered and then some, but it hurts to see the values so low when the market has a downturn.

 

[orangeadrenaline]

Theres some good advice here but the challenge for most people is that money in the markets needs to be actively managed. It’s not difficult but it’s not a passive thing. If you’re like me, you can hire a professional but they take a cut of your gains.

You also need to be able to tolerate down cycles. I had 7-figure paper losses in the last market crash. They have all since recovered and then some, but it hurts to see the values so low when the market has a downturn.

Investing should definitely be a passive thing. Professionals are more likely ripping you off and making you think it’s complicated. Check out the bogleheads and empower yourself.

 

[MaxBurn]

Theres some good advice here but the challenge for most people is that money in the markets needs to be actively managed. It’s not difficult but it’s not a passive thing. If you’re like me, you can hire a professional but they take a cut of your gains.

You also need to be able to tolerate down cycles. I had 7-figure paper losses in the last market crash. They have all since recovered and then some, but it hurts to see the values so low when the market has a downturn.

There is absolutely an education hurdle to get over and a certain mindset to ride things out that's required. Public schools won't teach any of this... BUT I will challenge the active management portion, you can set it and forget it and still comfortably pull even with active management.

This is very much NOT the place for this discussion so...

I don't care how much you hate Reddit there's excellent sub communities

r/Bogleheads

Bogleheads are passive investors who follow Jack Bogle's simple but powerful message to diversify with low-cost index funds and let compounding grow wealth. Jack founded Vanguard and pioneered indexed mutual funds. His work has since inspired others to get the most out of their long-term...

www.reddit.com

r/financialindependence

This is a place for people who are or want to become Financially Independent (FI), which means not having to work for money. Financial Independence is closely related to the concept of Early Retirement/Retiring Early (RE) - quitting your job/career and pursuing other activities with your time...

www.reddit.com

A independent forum if you wish

Early Retirement

Community platform by XenForo®

www.early-retirement.org

 

[orangeadrenaline]

VUSXX currently at 5.12% and exempt from most state income tax.

 

[MaxBurn]

Investing should definitely be a passive thing. Professionals are more likely ripping you off and making you think it’s complicated. Check out the bogleheads and empower yourself.

You beat me to it!

 

[CarAnalogy]

Along with an interest rate cut on the credit card too. Right? Right??

 

[tivoboy]

If you have trouble managing money and need to move it to a savings account as a middle ground this is better than nothing.

But honestly savings accounts are a ripoff IMO, I've yet to see one that has a rate that can stay ahead of that periods current inflation. I'm comparing any historical month inflation vs that months savings account rates, not the long term averages. It can slow the bleeding of actively losing money but that's about it. I'm also convinced the federal posted inflation rates are very flawed data, on purpose because it suits politically. Get your real inflation data elsewhere based off of what YOU buy.

I don't like it but you pretty much have to have your money in the market somewhere to stay ahead of inflation. If you need to get your money out it generally only takes a couple days to sell something in your money market account and ACH transfer to checking.

Savings account rates are never about keeping up with inflation, it’s about the relative cost of capital.. and they usually delivery something south of that by .50 bps or higher depending on how desperate customers are for near risk free returns.

 

[tivoboy]

Theres some good advice here but the challenge for most people is that money in the markets needs to be actively managed. It’s not difficult but it’s not a passive thing. If you’re like me, you can hire a professional but they take a cut of your gains.

You also need to be able to tolerate down cycles. I had 7-figure paper losses in the last market crash. They have all since recovered and then some, but it hurts to see the values so low when the market has a downturn.

Anyone who chooses to can just put money in the market, buy and SPY or VOO ETF fund and get the markets returns over time.. yes, ups and downs, but over time you’re going to perform essentially same as market. Next to zero fees, negligible.

IF one wants to try and perform BETTER than the market, or be nimble, do better tax planning, take on MORE than market risk then going to a more active managed advisors or manager MIGHT get that better performance - but most investment managers in the end DO NOT outperform the overall market and yes they can charger anywhere from .50bps across all money managed and up to ~1.25%. Net of fees, most come in just UNDER market performance and that’s not even the S&P but closer to the DOW index…and forget about Nasdaq level of performance.

Worst case for most low info investors is putting money in the markets and taking it out at the bottom or when there is a lot of volatility. Keeping it in the market for 5-10+ years and you’ll be fine. Even better if it is tax deferred and essentially locked up till ~ 59.5 years.

 

[bigjnyc]

If you have trouble managing money and need to move it to a savings account as a middle ground this is better than nothing.

But honestly savings accounts are a ripoff IMO, I've yet to see one that has a rate that can stay ahead of that periods current inflation. I'm comparing any historical month inflation vs that months savings account rates, not the long term averages. It can slow the bleeding of actively losing money but that's about it. I'm also convinced the federal posted inflation rates are very flawed data, on purpose because it suits politically. Get your real inflation data elsewhere based off of what YOU buy.

I don't like it but you pretty much have to have your money in the market somewhere to stay ahead of inflation. If you need to get your money out it generally only takes a couple days to sell something in your money market account and ACH transfer to checking.

Spot on.... Whenever I try to explain to the older uninformed folks in my family, that having all of their money in a savings account means they are actually losing money.... They give me the blank pikachu face lol.

 

[webkit]

Along with an interest rate cut on the credit card too. Right? Right??

There will likely be some sort of (although less than prime) rate reduction over the next month or two but considering how high CC rates are, it's not going to be especially meaningful.

The best way to lower amount paid in credit card interest is to lower balance, or not carry a balance at all. That's where the real interest savings can be. 👍

 

[lkrupp]

When the Fed cuts rates your saving rates go down too. Simple math except for credit card APRs. When the Fed cuts rates credit card APRs stay the same or increase.

 

[CarAnalogy]

There will likely be some sort of (although less than prime) rate reduction over the next month or two but considering how high CC rates are, it's not going to be especially meaningful.

The best way to lower amount paid in credit card interest is to lower balance, or not carry a balance at all. That's where the real interest savings can be. 👍

When the Fed cuts rates your saving rates go down too. Simple math except for credit card APRs. When the Fed cuts rates credit card APRs stay the same or increase.

Banks are real quick to offer 18 year olds credit cards. Not so quick to teach them how hard interest cuts against them, and how little interest goes the other way.

 

[lkrupp]

Spot on.... Whenever I try to explain to the older uninformed folks in my family, that having all of their money in a savings account means they are actually losing money.... They give me the blank pikachu face lol.

Exactly since they are risk intolerant. “you can’t lose your money in a savings account or CD” goes the argument. I’ve been living off my retirement IRAs for 12 years now. I went with a major investment firm whose managers are registered fiduciaries. My risk tolerance level is set to ‘moderate’. Fiduciaries make their money by increasing the value of your account, not by making trades and selling investment packages on commission.

What you never do is go with your bother’s wife’s cousin who fancy themselves an investment guru. That’s a sure way to lose it all. One of my former colleagues thought he was an investment guru and managed his accounts himself. The results were spectacularly bad as expected.

 

[webkit]

When the Fed cuts rates credit card APRs stay the same or increase.

Credit card companies commonly lower APRs following prime rate cuts, although it may take up to a month or two. Some have already lowered rates, and at the full 0.50%.

 

[webkit]

Banks are real quick to offer 18 year olds credit cards. Not so quick to teach them how hard interest cuts against them, and how little interest goes the other way.

Credit is too easy to get and too easy to use. That can be a problem if someone isn't disciplined enough with their spending.

 

[sw1tcher]

There will likely be some sort of (although less than prime) rate reduction over the next month or two but considering how high CC rates are, it's not going to be especially meaningful.

The best way to lower amount paid in credit card interest is to lower balance, or not carry a balance at all. That's where the real interest savings can be. 👍

You left out transfering balance to a 0% interest rate credit card. There are quite a few of them out there where you get 0% interest from 12 months up to 21 months (Wells Fargo Reflect Card).

 

[california_kid]

Savings is a great way to earn some extra dollars for simply paying your bills. Money Market accounts give you a set number of transactions per month as opposed to an unlimited checking account. If the number of rent, credit card payments and utility bills you pay per month is less than a money market monthly transaction limit then you may want to consider using a high interest money market account for bill paying.

The interest you earn per month is calculated by the average of your balance on the beginning of the month and the end of the month. For example, if you pay $2K worth of bills per month, your average balance would be $1K which would earn you $42.50 in interest. Not a lot, but it's literally free money. You will pay income taxes though.

Iv'e been doing this since interest rates went higher than 3% and it's added up to a substantial amount for me.

 

[webkit]

You left out transfering balance to a 0% interest rate credit card. There are quite a few of them out there where you get 0% interest from 12 months up to 21 months (Wells Fargo Reflect Card).

Yes, but that may only be a temporary "fix" unless one keeps jumping from card to card or adding new cards after each promotional interest free period ends. There can also be balance transfer fees each time.

There are a few ways to approach the high interest credit card situation but I still feel the best way is to pay down a balance or don't carry a balance at all.