Apple Card Savings Account Receives Another Rate Increase

[sw1tcher]

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.

Amex CEO didn't seem too interested in partnering with Apple when he was asked about it during the Goldman Sachs U.S. Financial Services Conference last month.

Amex CEO talks co-brand partnerships after Apple reports

The card issuer’s premium designation isn’t compatible with all potential card issuing partners, Amex CEO Steve Squeri said Tuesday.

www.paymentsdive.com

 

[dmack101]

BMO has an on-line only savings account at 5.10%...but theres no app, just a website..better than 4.35%..

 

[Nihilvor]

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.

I personally feel that too much can be made of a given percentage. Every account has different stipulations, and the needs for each person differ as well. I'm not with Apple, but I use a money market with around the same rate because of the convenance of check writing and ATM access. Some people like high yield savings, but those often require one to make a certain number of debits per month; those of us who rather use credit cards with 5% cash back aren't going to make much use of those accounts. Apple Savings doesn't have a lot of those rules and feels like something in between a money market and savings account, so I'm sure that it has those who make good use of it. Personally, I feel a combination of different types of accounts makes the most sense.

 

[newyorksole]

I'm paying for it on the back end from interest rate on my card.

careful. people on here will tell you that you shouldn’t ever need to worry about your credit card’s interest rate because no one should ever carry a balance / pay a company interest.

very curious tho what the future of this card looks like. I like the convenience of the savings account so this is good news.

 

[svish]

Looks like the higher interest rates will remain for some time. Would like to see Apple card Savings account in my country.

 

[Sheepish-Lord]

careful. people on here will tell you that you shouldn’t ever need to worry about your credit card’s interest rate because no one should ever carry a balance / pay a company interest.

very curious tho what the future of this card looks like. I like the convenience of the savings account so this is good news.

That’s the ultimate goal isn’t it? Unless it was an emergency, paying regular interest on a credit card is effectively saying you didn’t have the money to begin with. It’s poor money management.

Better idea is not to put your poor financial status out there for the internet to see.

 

[WarmWinterHat]

careful. people on here will tell you that you shouldn’t ever need to worry about your credit card’s interest rate because no one should ever carry a balance / pay a company interest.

very curious tho what the future of this card looks like. I like the convenience of the savings account so this is good news.

Those people are correct; you shouldn't be paying CC interest. I don't really use my Apple CC much, but I just looked up the interest (somewhat hard to find), and it's 21.24%!! You're better off taking a bank loan than using your CC if you can't pay the full amount....or just wait/not buy. That's loan-shark territory.

I have no idea what the rates are on my other three credit cards. Haven't paid any interest since my 20s, and I'm 44 now.

 

[mattopotamus]

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 thought I read Goldman is responsible for the Daily Cash payouts. That would be the main reason they are losing money.

 

[Ethosik]

Those people are correct; you shouldn't be paying CC interest. I don't really use my Apple CC much, but I just looked up the interest (somewhat hard to find), and it's 21.24%!! You're better off taking a bank loan than using your CC if you can't pay the full amount....or just wait/not buy. That's loan-shark territory.

I have no idea what the rates are on my other three credit cards. Haven't paid any interest since my 20s, and I'm 44 now.

That’s why the credit card and credit industry is so messed up. I had poor credit and the response was “you need a credit card”. I hate credit cards. And the fact that Goldman loses money because people don’t carry a balance is just messed up.

 

[Apple247]

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.

I recently linked my Apple Savings to a brokerage account, where it showed up as "Marcus by Goldman Sachs", so this is interesting to note.

 

[vertsix]

Too bad Apple Card's future is up in the air.

Doesn't matter. By law and regulation, our savings are protected by the FDIC. So even if Apple transfers Apple Card to another bank, assets and liabilities are transferred and should be nearly transparent to us.

 

[CloneBB]

Please Apple don’t raise again. Every time you do, it is news and endless posts about every place that pays more

 

[CharlesShaw]

Is Apple making the decisions to raise the rate or is Goldman Sachs? The fine print at the bottom of the Wallet app states that we must contact GS if we wanted to close the savings account.

 

[bigboy29]

I mean that's good but buying 1-3 month bonds (zeroes) using any trading / brokerage account is super easy and will bring in ~5.3% with no risk. Note that this is annualized yield (you will not get 5% for 1 month bond).
Also - it is not Treasury Direct as that is PITA to deal with. But you do need some sort of trading / brokerage account (like Fidelity etc.)

 

[WarmWinterHat]

I mean that's good but buying 1-3 month bonds (zeroes) using any trading / brokerage account is super easy and will bring in ~5.3% with no risk. Note that this is annualized yield (you will not get 5% for 1 month bond).
Also - it is not Treasury Direct as that is PITA to deal with. But you do need some sort of trading / brokerage account (like Fidelity etc.)

A lot of people don't want to directly manipulate their finances this much, and so an account like this is good. I have my regular savings account (not with Apple) with my liquid savings and for everything else, I have a personal financial company/advisor that handles it (separate from my work 401k). I have too much going on to follow rates constantly and shift money from here to there, plus my wife is self-employed so her finances are quite complicated.

 

[KPOM]

Apple keeps the credit card swipe fees.

Report Delves Into Why Apple and Goldman Sachs Want to Break Up

Recent rumors have suggested that Goldman Sachs is aiming to end its financial partnership with Apple, and The Information today shared a new report...

www.macrumors.com

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.

This is very unusual. I doubt any other financial institution would agree to these terms. Credit card issuers classify their customers into two main categories: "transactors" who pay in full and "revolvers" who carry a balance. The only way they make money from "transactors" is the interchange fee charged to merchants (usually 1-3%). With "revolvers" they earn interest income, but revolvers are also more likely to default.

 

[jav6454]

I thought Goldman Sachs was losing money on the Apple Card. Apple was making money?

They loose out on interest generation thru debt acruing. This is because the AppleCard allows users to easily create a path to reduce or get out of debt thru software.

Debt is what makes a credit card thrive.

 

[dominiongamma]

My trust with Apple and Goldman Sach sank after bailing on the agreement. I don’t trust my money with them now.

 

[WarmWinterHat]

They loose out on interest generation thru debt acruing. This is because the AppleCard allows users to easily create a path to reduce or get out of debt thru software.

Debt is what makes a credit card thrive.

There are 100 other services that will guide you out of cc debt, same as Apple, it's just not as handy and it's not built-in.

 

[Dark_Omen]

Amex CEO didn't seem too interested in partnering with Apple when he was asked about it during the Goldman Sachs U.S. Financial Services Conference last month.

Amex CEO talks co-brand partnerships after Apple reports

The card issuer’s premium designation isn’t compatible with all potential card issuing partners, Amex CEO Steve Squeri said Tuesday.

www.paymentsdive.com

Understandable, so that is why Apple needs to do a better job.

 

[Robert.Walter]

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.

The rate is uncompetitive by about 1%.

They are trying to stem capital outflows by bumping up rate.

But they are trying not to bump too high that it makes the business unattractive for an acquirer from GS.

because if they push rate too high they create a problem. Too high reduces bidders because business is less profitable and an acquirer who takes with high rate who later cuts rate all external factors being equal will have capital outflows.

My guess is there’s a tentitative agreement so rate has been bumped with consent of acquirer.

The whole divestment situation has put delay pressure on keeping the rate competitive.

 

[Robert.Walter]

Amex CEO didn't seem too interested in partnering with Apple when he was asked about it during the Goldman Sachs U.S. Financial Services Conference last month.

Amex CEO talks co-brand partnerships after Apple reports

The card issuer’s premium designation isn’t compatible with all potential card issuing partners, Amex CEO Steve Squeri said Tuesday.

www.paymentsdive.com

Lukewarm is the default position during negotiations.

 

[Robert.Walter]

My trust with Apple and Goldman Sach sank after bailing on the agreement. I don’t trust my money with them now.

Complete nonsense. You need to recalibrate your reaction.

 

[Robert.Walter]

I mean that's good but buying 1-3 month bonds (zeroes) using any trading / brokerage account is super easy and will bring in ~5.3% with no risk. Note that this is annualized yield (you will not get 5% for 1 month bond).
Also - it is not Treasury Direct as that is PITA to deal with. But you do need some sort of trading / brokerage account (like Fidelity etc.)

Would be grateful if you could jot out the math and how to steps behind your comment. It is interesting and a short primer could save a bunch of us from figuring it out wrong. Thanks.

 

[Ethosik]

Complete nonsense. You need to recalibrate your reaction.

Agreed. Savings account is insured. Even if the worst happens, you have time to get your money.