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Apple today increased the Apple Card savings account's APY to 4.35%, according to a notification sent to cardholders, including MacRumors contributor Aaron Perris.

apple-card-savings-account-16x9.jpg

This is the second increase to the savings account's APY in as many months, after Apple raised it from 4.15% to 4.25% in December. Apple's rate now matches that offered by popular high-yield savings accounts from American Express and Discover, but there are still some other options that offer even higher APYs up into the 4.5% to low 5% range in the U.S., such as Marcus by Goldman Sachs and Wealthfront.

Apple launched the high-yield savings account in April 2023, in partnership with Goldman Sachs. The account can be opened and managed in the Wallet app on the iPhone, and it has no fees, no minimum deposits, and no minimum balance requirements. You must have an Apple Card, be a U.S. resident, and be at least 18 years old to open an account.

4.35-Apple-Card-Savings.jpg

The account allows Apple Card holders to earn interest on their Daily Cash cashback balance, and on personal funds deposited via a linked bank account, or from their Apple Cash balance. The maximum balance allowed is $250,000, and balances are fully insured by the U.S. government's Federal Deposit Insurance Corporation.

The rate increase comes after The Wall Street Journal in November reported that Goldman Sachs is looking to terminate its Apple Card partnership, as part of its broader exit from the consumer lending business. The partnership is expected to end within the next year or so, but it's unclear how this might affect the Apple Card in the future.

Article Link: Apple Card Savings Account Receives Another Rate Increase
 
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KPOM

macrumors P6
Oct 23, 2010
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The timing is a bit odd, since the Fed is expected to start cutting rates as early as March. But there are other accounts that pay more than 4.35%, so perhaps Apple wants to attract as many deposits as possible for a future credit card partner.
 
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KPOM

macrumors P6
Oct 23, 2010
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I thought Goldman Sachs was losing money on the Apple Card. Apple was making money?
Goldman is losing money because they agreed to give credit cards to just about anybody and everybody. It turns out that selling MacBook Pros and iPhone 15 Pros on credit to people with bad credit leads to losses. The deposit accounts are on the low end of “high yield” savings accounts.

Apple doesn’t let Goldman charge late fees and also insists that all statement cycles end on the same day (which means they get deluged with customer service calls early each month). No other card company offers those terms. Goldman was desperate to get into the consumer lending industry so they agreed to it. A few years later they changed their minds.
 

dannyyankou

macrumors G5
Mar 2, 2012
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Goldman is losing money because they agreed to give credit cards to just about anybody and everybody. It turns out that selling MacBook Pros and iPhone 15 Pros on credit to people with bad credit leads to losses. The deposit accounts are on the low end of “high yield” savings accounts.

Apple doesn’t let Goldman charge late fees and also insists that all statement cycles end on the same day (which means they get deluged with customer service calls early each month). No other card company offers those terms. Goldman was desperate to get into the consumer lending industry so they agreed to it. A few years later they changed their minds.
I see. But how is Apple making money then? Is only Goldman taking the loss on unpaid debt? I don't know how these partnerships usually work.

I'm just shocked, you'd think it would be difficult for a financial institution to not make money on a credit card.
 
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Morac

macrumors 68020
Dec 30, 2009
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Odd. They just bumped it up from 4.15 to 4.25 a few weeks ago. That’s the second bump is under 30 days after not touching it for over a year.

It’s still lower than I can get elsewhere though.
 

midkay

macrumors 6502
Jan 27, 2008
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Sweet! I figured since they just bumped it, we wouldn't see another increase for another year or so. Really glad to see this, keep 'em coming Apple!
 

KPOM

macrumors P6
Oct 23, 2010
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I see. But how is Apple making money then? Is only Goldman taking the loss on unpaid debt? I don't know how these partnerships usually work.

I'm just shocked, you'd think it would be difficult for a financial institution to not make money on a credit card.
Yes. The way the typical card program works, the bank takes the primary credit losses. Apple pays for promotions (such as 0% interest for 12 months) and also pays the bank a transaction fee.

Potentially Apple could agree to share in credit losses if they want to attract a new partner.
 
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sw1tcher

macrumors 603
Jan 6, 2004
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Too bad...it's not. They are making money and another partner will help them continue to make more. It's that simple.
Apple might be benefitting from their partnership with Goldman Sachs, but Goldman Sachs isn't benefitting one bit.




So unless Apple is willing to accept less favorable terms,

Goldman Sachs is now aiming to get away from consumer banking. It wanted to hand the Apple partnership over to American Express, but ‌Apple Card‌ has to run on the Mastercard network until at least 2026 according to a deal Apple and Goldman Sachs established, and American Express has its own payment network. Apple also has to approve any new partner, and sources that spoke to The Information have suggested that few companies would be willing to agree to Apple's terms.


I don't see any financial institution rushing in to take over.

Citigroup, JPMorgan Chase, Synchrony Financial and Barclays all took a pass once they did the math

Within the industry, the deal is widely perceived as one that’s risky for a bank to take on. Citigroup was in advanced negotiations with Apple for the card but pulled out amid doubts that it could earn an acceptable profit on the partnership, according to people with knowledge of the talks. Other banks, including J.P. Morgan Chase, Barclays and Synchrony, also bid on the business.


and saw how small their cut of profits would be.

When Apple first shopped the deal with potential partners, other banks including JPMorgan Chase passed because their potential cut of profits was too small, according to one of the sources familiar with the matter and a separate source who was also aware of Apple's original proposal, who declined to be identified discussing private negotiations.


Goldman Sachs was the only one foolish enough to agree to Apple's terms and now they're paying for it.
 
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sw1tcher

macrumors 603
Jan 6, 2004
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I see. But how is Apple making money then?
Apple keeps the credit card swipe fees.


Because Goldman Sachs was new to consumer banking and was eager to establish a deal with Apple, it is not collecting fees that it would typically get in a partnership for a credit card. Goldman Sachs does not get a portion of the fee that merchants pay to Apple to accept the ‌Apple Card‌. Retailers pay a percentage of each transaction when taking a credit or debit card payment, and Goldman Sachs gets no funding from this.
 

Morac

macrumors 68020
Dec 30, 2009
2,179
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My guess is that a lot of people pulled money out of Apple Savings because the 4.15% rate was really low considering the number of Fed rate hikes last year.

Even at 4.35% Goldman Sachs would make more on money people put in Apple Savings accounts then they would pay out in interest. I suspect they’ll keep raising rates until people start putting enough money back into Apple Savings that they can use it for loans.

Personally I can get 4.75% in a savings account and current get 5.31% in a money market account so I have no reason to use Apple Savings.
 

Dark_Omen

macrumors 6502
Jan 31, 2021
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Apple keeps the credit card swipe fees.


Because Goldman Sachs was new to consumer banking and was eager to establish a deal with Apple, it is not collecting fees that it would typically get in a partnership for a credit card. Goldman Sachs does not get a portion of the fee that merchants pay to Apple to accept the ‌Apple Card‌. Retailers pay a percentage of each transaction when taking a credit or debit card payment, and Goldman Sachs gets no funding from this.
American Express won’t give up transaction fees, so Apple will need to convince Amex on how it’ll be a better deal than what Goldman Sachs received.
 
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