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Apple Card to Offer Savings Account for Daily Cash
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This is actually a pretty good perk. Didn't realize they were on the 3% cash back list.
I bring about 9k a month now. So I figure emergency just charge cc pay off next month. Dunno each person their own.
Or just pull a personal loan. I pulled a 25k loan to play w stocks got it immediately at midnight
Some have suggested that if you leave the money in the Apple Cash "high yield savings" account year over year the money will compound and the amount you earn in interest will grow each year. This is absolutely true however it is my firm belief leaving any significant sum in a simple "high yield" savings account that can't even keep up with normal, let alone high inflation isn't your best choice for assets you intend to hold for years. Yes, there are needs for short term emergency funds to be kept very liquid but better options exist that still allow for reasonably quick access to funds (2-3 days or less etc.) that will get you better returns. I keep my Apple Cash and let it build to a few hundred dollars and then when I need to buy something about that cost I use it instead of credit or real cash, if I wanted to truly invest it for any real return that could be meaningful in the longer term I would move it to a much better vehicle than the coming "high interest" Apple savings account that Apple claims can "help you live a health financial life". LOVE the Apple Card, not hyped for the Apple Savings account other than I appreciate they might throw me the equivalent of a latte or two in interest per year.
They're very clearly trying to hold on to the daily cash instead of having people it transfer it out to their primary finance accounts. They can then siphon off interest from the top of that balance, which is especially appealing now that the FED is raising rates.
There was an article here on MR just a few weeks back about how unprofitable Apple Card has been for GMSachs.
A "high yield" savings account typically has interest rates that are higher than the average pre-pandemic inflation rate this century.
U.S. Inflation Rate by Year
The U.S. inflation rate by year is the percentage change in prices from one year to the next. It responds to business cycle phases and interest rates.
I'm not sure what you are getting at here. A savings account is typically used for short term emergency funds. Maybe a few months of salary. Not sure where you would get a significantly better return than 2-3% on a no-risk, small balance, quick access account.
A "high yield" savings account typically has interest rates that are higher than the average pre-pandemic inflation rate this century.
U.S. Inflation Rate by Year
The U.S. inflation rate by year is the percentage change in prices from one year to the next. It responds to business cycle phases and interest rates.www.thebalancemoney.com
I'm not sure what you are getting at here. A savings account is typically used for short term emergency funds. Maybe a few months of salary. Not sure where you would get a significantly better return than 2-3% on a no-risk, small balance, quick access account.
The thing is the 2-3% no risk high yield savings accounts didn't exist for the last 20 years while showing those super low inflation rates. You showed a chart of inflation history but not saving account interest rate history. It was well below 1% and always below the rate inflation in the years unless you go back to the 70-80s. The high yield savings accounts today returning 1.5-2%+ (almost exclusively found with online banks, physical banks are offering sub 1%) have only existed the last 6-8+ months or so as a result of the sudden and dramatic raising of interest rates by the Fed in their attempt to stop the rampant rise in inflation that is effecting us all. For nearly 2 decades the historically LOW federal interest rates (that made home mortgages cheap for example) made even high yield savings accounts return well under 1%, often WELL under. Most do not expect these sudden 2% rates to last more than a few years before returning lower, and those years the 2% will be offset by the high inflation that is indirectly their cause.
Anyway, I'm just focusing on Apple's hyperbole by saying this new program somehow can better a person's financial health, something I feel is akin to saying drinking a Diet Coke helps you when you also eat 12 Big Macs a day. I mean I suppose it is true, you could be drinking a regular Coke... but then again why not drink water?
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Nice. But want Apple to offer Apple Card in other parts of the world.
I’ve been getting harassed by all these Apple Card messages to apply LOLI love Apple Card updates. Love to be a part of one someday.
So, far lower than current inflation then? Wake me when Apple makes it easy to invest in something that's not guaranteed to lose you value over time. Get Goldman and Sack's to figure out what rich people do to really protect the value of their wealth over time, and then let regular people do it through the Wallet app.
Wake yourself.
You are likely not aware, and are no doubt shocked, that bank savings accounts, especially those with no-restrictions, pay less than current inflation.
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Rich people lose tons of money when the market and economy fluctuates too... the difference is with affluence you have the luxury of being patient and holding for the inevitable rise over time since a 30% loss of a lot still leaves a lot. Average everyday folks either don't invest or when they do often lack the stomach for market volatility since their 401k or IRA represents such a critical part of their wealth that it seems too painful to watch it fluctuate so much. They stop investing during downtimes or worse pull the money out of the market and miss the rise locking in their losses forever.
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Point taken, but I was just comparing the average inflation rate to the current interest rate. However, it does look like there were rates around 1% in 2014-15 when inflation was under 1%.
Money Nation's 6 Best High Yield Savings Accounts 2015 - Money Nation
The best high yield savings accounts offer interest rates of .75% to 1.05%, though accounts with 5% interest are available for limited balance amounts.
moneynation.com
Sure. However, I think you are underplaying the rates. I spot checked a few years from the last decade, and even with historically low rates from the Fed, high yield savings rates were at or above 1%.
Because you are only considering it from a rate perspective and comparing it to something that you've yet to define.
1. Where are you going to get a significantly better return than 2-3% on a no-risk, small balance, quick access account?
2. The main benefit of the proposed account is that it encourages people that would otherwise spend the money immediately to save. 60+% of people in this country live paycheck to paycheck. Much like the Apple Card has features that encourage people to be more responsible with their credit.
It is a matter of how much. I keep a couple of months expenses liquid and immediately accessible. Might as well have it making $50 / month vs a checking or passbook account an earn a penny.
I agree with the rest of your statement - don't sit on too much cash; reducing debt is important. I have a 2.15% 15-yr and am still trying to have it paid off in 5 years.
It's funny how a thread like this turns computer/iPhone gurus into financial experts. There has been quite a bit of misinformation in some of these posts. No I am definitely no expert but I do know misinformation in most cases when I see it.
If this savings account has an interest rate over 2% it will be a decent account with the added convivence I and several others need.
Most regular savings accounts(not high yield) have an APR of around .02% not 2%. This will be a nice upgrade for someone who has a simple savings with their bank.
If this savings account has an interest rate over 2% it will be a decent account with the added convivence I and several others need.
Most regular savings accounts(not high yield) have an APR of around .02% not 2%. This will be a nice upgrade for someone who has a simple savings with their bank.
I'll bow out here because we are going in circles and I think my original point has gotten lost as people try to determine if whatever unannounced rate on the high yield savings option for cash from an Apple Card is good or not compared to competitors and other options. That was never my point, perhaps it will be a good rate for a high yield savings account however my point was solely in regards to Apple claiming putting Apple Cash from the Apple Card cash back in a high yield account like theirs is a way to "live a healthy financial life" (their PR quote) and I laughed at that for 2 main reasons... 1-3% back on Apple Card purchases is good but it won't represent large sums of money without large corresponding use of the Apple Card. Putting that Apple Cash in a high yield savings account and getting 2% back on it as interest won't be meaningful in a way that helps someone's financial health is my argument. Even $100,000 a year in Apple Card purchases likely will result in about $2,000 back in Apple Cash (already getting that today) and with the new high yield option will only result in an additional $40 back in interest. Sure you can leave the Apple Cash to compound over time but for someone spending $100k a year on a CC, they likely have an income and assets where that interest doesn't move the needle on their financial lives, and likely there is a better use of their Apple Cash than leaving it in a high yield savings account.
I'm not criticizing getting some interest back at all, good on Apple for creating this, I'm just saying Apple is overreaching saying somehow it will help users of the Apple Card financially in any meaningful way, it just seems to me to be another perk to encourage people to sign up and use the Apple Card frankly.
Thanks everyone.
I'm not criticizing getting some interest back at all, good on Apple for creating this, I'm just saying Apple is overreaching saying somehow it will help users of the Apple Card financially in any meaningful way, it just seems to me to be another perk to encourage people to sign up and use the Apple Card frankly.
Thanks everyone.
I think you are still overlooking a simple use case. Someone makes 30-40K a year. Spends $800/month on their Apple Card. Get $15/month in Daily Cash deposited to this high yield savings account. In 3 years they have around $565 in a savings account by doing absolutely nothing. In 5 years, it's $960. (Yes, that's an estimate and interest rates will change.) That's significant for a large percentage of this country that lives paycheck to paycheck.
Obviously, for someone with financial discipline, there may be better options. But that's not most people. It's not the rate that matters, but the ability to convince people to save.
Oh boy, sucking me back in lol! I hear you on your point, but as it stands today with NO INTEREST, just existing Apple Cash in your example after 5 years the Apple Cash would have built up to $900, vs. your number of $960 with the new "high yield" savings account adding in 2% interest (and it's questionable it will remain that high over a five year period). That means the new Apple offering is adding an average of $12 a year in interest (much less at first, more when compounded each year) over the 5 years. That's like 3 drinks at Starbucks a year and that's only if you don't touch that cash for 5 years. I'm just saying the numbers are small enough to not live up to the PR hype of making a difference in living a "healthy financial life" as Apple tries to make it seem.
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Again, my point is that the rate isn't as important as encouraging people to save. The $900 is the important number. The $60 is just a bonus that helps convince people to leave the money alone.
And again, you've yet to provide an example of a significantly better alternative for the no-risk, small balance, quick access use case.
I've always kept my emergency fund cash in a Vanguard Federal Mutual Fund that earns about 2.5% a year and is now at nearly 3% with the fed rate hikes. It did this even when high interest savings accounts were well below 1.5% so it always did a bit better. It was still quick access in the sense there is no withdrawal penalty up to 8 times per month (any amount) and it took 2 days to transfer a sum to my checking account or anywhere else electronically. High yield savings accounts I suppose are quicker IF they are at the same bank you have a checking account or if in the case of this future Apple Cash savings account the amount can be used instantly as an alternative to a credit card charge when ringing up at a register... however I think if you are trying to "convince people to leave the money alone" making it take a 2 days to get the $$$$ is better than when 4 years into your 5 year example someone suddenly decides at the Apple Store they need that sweet, sweet Apple Watch Series 12 and sees at a click of a button they can use the Apple Cash.
That's great, but it's an investment account with associated risk and fees that would be entirely inappropriate for what Apple is proposing. All for an extra couple cups of coffee over five years (assuming current rates).