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iOS 16.4 Lays Groundwork for Apple Cash High-Yield Savings Account

Saw an article talking about this and the fact Apple was trying to do this and extricate itself more and more from GS for the card (do more of it just internally) - guessing this is a long term goal.

antibolo said:
Apple slowly becoming a bank is going to be the company's downfall.
Click to expand...

Can't see that happening actually - getting into advertising etc. where the user is the product, that I could see continuing to corrupt Apple in the future as the only way to do better with that is to exploit the users worse and worse as time goes on (look at Google Search over time to see that). The advertising seriously worries me for Apple. Hard to see the Apple card actually doing that, they've had Apple Cash for so many years.
 
This entire thing is setup for families and the savings account will probably be where I shuffle allowances for my kids
 
rodpascoe said:
Yep, came here to say the same. Where is the UK love?
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Are there any banking regulations to speak of that would make Apple avoid the UK? I could see how they might make the business decision to simply not release some products in the UK or other regions.
 
Goldman lost over $1B in 2022 due to losses associated with establishing the Apple credit card business and other loan losses. And now the Fed and the Consumer Financial Protection Bureau are investigating the company as well. It's been a rocky road establishing itself in the consumer banking and credit card business and frankly I think Goldman now regrets the Apple relationship. The savings account idea is going to go nowhere, as the big consumer banks can't even make them work. Consumers are too smart and are much adept at using brokerage sweep accounts, money market accounts, CDs, and easily bought/sold Treasuries to get far better yields. Goldman is not used to losing. I think we will see it exiting the Apple relationship sooner than later, forcing Apple to either play with another partner or get out of the credit card business altogether. As for Tim, I think he got in way over his head.
 
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chouseworth said:
Its consumer customer sat is dismal.
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I’ve actually has a good experience with the product. So, I just searched to find out what the reason was for the low customer satisfaction score. Maybe they’re using their cards in novel ways that I’m not privy to. Instead of finding that, I found this.
www.apple.com

For the second year, Apple Card and Goldman Sachs rank No. 1 in customer study

For the second year in a row, Apple Card and Goldman Sachs also ranked highest across all the surveyed categories in the Midsize Credit Card segment.
www.apple.com
So, yeah, this is right about where I’d expect. My main reason for contacting my card would be in the event of a suspicious charge and they’ve been responsive and quick at getting me the funds back on my card. Even when I use a vending machine that doesn’t give the product, just two seconds to dispute the charge.
 
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ondioline said:
GS literally already has a savings bank.

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Today's WSJ reports that GS is pulling back on Marcus, including by ending loan originations. It is also suspending any new efforts to expand its credit card business, including recent discussions with T-Mobile. In short, while CEO Solomon still provides lip service to a long term relationship with Apple, he is pulling back the reins on Goldman's consumer banking.

Per 9to5 Mac,

There are two things that contribute to Goldman Sachs losing money on Apple Card.

First, Apple Card doesn’t charge users any fees other than interest. Whereas other card companies nickel and dime with things like late fees and foreign transaction fees, Apple Card does not. The Apple Wallet app also actively encourages people to make payments and avoid interest.

Second, Goldman has also been very liberal in approving people for Apple Card. Here are some numbers from the company’s recent regulatory filings (via CNBC):

  • Goldman has a 2.93% net charge-off rate, double Chase and Bank of America
    • “Charge-offs” are typically after a customer misses payments for six months
    • More than $16 billion in loan balances
  • More than a quarter of Goldman’s card loans have gone to people with FICO scores below 660
  • Goldman is less aggressive (and less successful) at recovering charge-off debt than other banks
 
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chouseworth said:
The savings account idea is going to go nowhere, as the big consumer banks can't even make them work.
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Can't make them work? 🤣 Bank of America made $3.6 billion last quarter in their consumer banking unit.

www.reuters.com

Bank of America profit tops estimates as higher rates boost income

Bank of America Corp reported a bigger-than-expected fourth-quarter profit on Friday, helped by a surge in net interest income as the U.S. Federal Reserve raised rates through most of last year.
www.reuters.com www.reuters.com

Net income at the bank's consumer banking unit jumped 15% to a record $3.6 billion in the quarter.



chouseworth said:
Consumers are too smart and are much adept at using brokerage sweep accounts, money market accounts, CDs, and easily bought/sold Treasuries to get far better yields.
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If consumers are so smart then how does Bank of America which offers between 0.01% to 0.04% APY on their savings accounts have over $1.4 trillion in consumer deposit balances and with deposit balances growing?

Bank of America Consumer Clients Make $294 Billion in Payments in February, up 16% Year-Over-Year

Bank of America today announced their approximately 67 million clients made $294 billion in total payments during February, a 16% increase over February 2021. This follows a 5% increase in total payments in February 2021 when compared to pre-pandemic levels in February 2020.
newsroom.bankofamerica.com newsroom.bankofamerica.com

Even with the strong growth in spending, Bank of America clients’ deposit balances totaled over $1.4 trillion at the end of February, up 15% from February 2021.

We continued to see growth in deposit balances across all stratifications of deposit customers. Among consumers with an average deposit balance of less than $2,000 before the pandemic, balances were up five times their pre-pandemic levels on average, including an additional 2% growth in February 2022 compared to January 2022.
 
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sw1tcher said:
Even with the strong growth in spending, Bank of America clients’ deposit balances totaled over $1.4 trillion at the end of February, up 15% from February 2021.
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I'd be curious to see the the trend on just their savings balances, not deposits overall. It seems the list of banks offering high-yield savings accounts is only growing.

I primarily bank with BofA but have savings accounts elsewhere.
 
sw1tcher said:
If consumers are so smart then how does Bank of America which offers between 0.01% to 0.04% APY on their savings accounts have over $1.4 trillion in consumer deposit balances and with deposit balances growing?

[
Click to expand...
The great majority of the earnings in consumer banking, including BOA’s, come from the spread on lending, including balances on credit cards. The contribution from earnings on float in checking and savings balances is not nearly as significant as much of these need to be kept on reserve. All of this is why GS is rethinking its consumer banking strategy, as it really does not want to be a full service consumer lender. Its credit card lending is already in deep trouble with writeoffs of almost double the rate for other banks. And as noted in post #33, it is even pulling back on its initial foray into consumer savings and originations at Marcus. In short, GS CEO Solomon knows full well that savings accounts are not going to bring GS consumer banking back to profitability. It is going to have to much better manage its credit card business and loan portfolio to do that.
 
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Good to know. But would like to see Apple Card and Savings account available in many more countries.
 
chouseworth said:
The great majority of the earnings in consumer banking, including BOA’s, come from the spread on lending, including balances on credit cards. The contribution from earnings on float in checking and savings balances is not nearly as significant as much of these need to be kept on reserve. All of this is why GS is rethinking its consumer banking strategy, as it really does not want to be a full service consumer lender. Its credit card lending is already in deep trouble with writeoffs of almost double the rate for other banks. And as noted in post #33, it is even pulling back on its initial foray into consumer savings and originations at Marcus. In short, GS CEO Solomon knows full well that savings accounts are not going to bring GS consumer banking back to profitability. It is going to have to much better manage its credit card business and loan portfolio to do that.
Click to expand...
Yes, I'm aware of net interest income. The $3.6 billion I noted above that BofA made from their consumer banking unit is separate from the $14.7 billion in NII BofA made from lending.

www.reuters.com

Bank of America profit tops estimates as higher rates boost income

Bank of America Corp reported a bigger-than-expected fourth-quarter profit on Friday, helped by a surge in net interest income as the U.S. Federal Reserve raised rates through most of last year.
www.reuters.com www.reuters.com

Bank of America's net interest income (NII), which reflects how much money the bank makes from charging interest to customers, jumped 29% to $14.7 billion in the quarter.


So my point stands. Big consumer banks can make savings accounts work.
 
sw1tcher said:
So my point stands. Big consumer banks can make savings accounts work.
Click to expand...
BofA and Wells Fargo, which I consider big consumer banks, are not competitive on savings accounts anymore. I think the only way they're working is because a lot of folks just don't want to hassle with moving their money to another bank.
 
Other tech companies: scarily good AI chatbots, VR headsets, super-high-res zoom cameras, the metaverse, folding phones, etc., etc.

Apple: "We're introducing a high-yield savings account. :apple:"
 
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coffeemilktea said:
Other tech companies: scarily good AI chatbots, VR headsets, super-high-res zoom cameras, the metaverse, folding phones, etc., etc.

Apple: "We're introducing a high-yield savings account. :apple:"
Click to expand...
You left out Dynamic Island and new emojis

www.macrumors.com

iOS 16.4 Beta Adds New Emoji Like Donkey, Jellyfish, Pink Heart, Hyacinth, Ginger, Goose, Shaking Face and More

The iOS 16.4 beta that was released today introduces new Unicode 15 emoji characters, adding new emoji options for the first time in more than a...
www.macrumors.com www.macrumors.com
 
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I would need to be around 4% for this to be of interest to me... that a they make it significantly easier to move money than other similar account types. Currently most of these accounts are a pain to move money to/from.
 
Unregistered 4U said:
I’ve actually has a good experience with the product. So, I just searched to find out what the reason was for the low customer satisfaction score. Maybe they’re using their cards in novel ways that I’m not privy to. Instead of finding that, I found this.
www.apple.com

For the second year, Apple Card and Goldman Sachs rank No. 1 in customer study

For the second year in a row, Apple Card and Goldman Sachs also ranked highest across all the surveyed categories in the Midsize Credit Card segment.
www.apple.com
So, yeah, this is right about where I’d expect. My main reason for contacting my card would be in the event of a suspicious charge and they’ve been responsive and quick at getting me the funds back on my card. Even when I use a vending machine that doesn’t give the product, just two seconds to dispute the charge.
Click to expand...
The only two things I dont like:

A. CS is near useless. They still don't know why some vendors when you need the ZIP need the old one even though I've changed it to the new one everywhere. It's been over a year since we moved now.

B. Everyone is on the same cycle, so payments get locked up when the month changes.

Everything else is beyond great. It's super convenient other that B to pay and use.
 
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sw1tcher said:
Yes, I'm aware of net interest income. The $3.6 billion I noted above that BofA made from their consumer banking unit is separate from the $14.7 billion in NII BofA made from lending.

www.reuters.com

Bank of America profit tops estimates as higher rates boost income

Bank of America Corp reported a bigger-than-expected fourth-quarter profit on Friday, helped by a surge in net interest income as the U.S. Federal Reserve raised rates through most of last year.
www.reuters.com www.reuters.com

Bank of America's net interest income (NII), which reflects how much money the bank makes from charging interest to customers, jumped 29% to $14.7 billion in the quarter.


So my point stands. Big consumer banks can make savings accounts work.
Click to expand...
GS will never be primarily a consumer bank. They are pulling in the reins with Marcus. As for the $3.6B that you quote for the BOA Consumer Banking unit, per its own financial statements, it includes residential mortgages and loans, credit and debit cards, CDs, and IRA, checking accounts, and yes savings accounts. The income from those first sources dwarf the role that savings accounts play for the Consumer Banking unit.
 
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