3 Reasons Why Apple's New Savings Took in $1 Billion in Deposits in 4 Days

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KEY POINTS

  • Apple recently launched a new savings account product, and it quickly reached $1 billion in deposits.
  • The account has a high APY and is offered in partnership with one of the most respected banks on Wall Street.
  • The Apple Savings account is a competitive product, but it's still important to shop around before deciding.

Apple has provided certain financial services to its users for years (such as Apple Pay), but it just launched its much-anticipated savings account.

To call the Apple Savings account a success would be an understatement. According to sources familiar with the product, Apple's account brought in nearly $1 billion in deposits in its first four days after launch with about 240,000 people taking advantage.

There are a few good reasons why Apple's Savings account has been so successful in such a short period of time. Here are the main factors that seem to have attracted so much attention, in no particular order.

A great interest rate

Interest rates on loans, credit cards, and other forms of borrowing have increased sharply over the past year and a half or so. But many savings accounts haven't done the same. In fact, savings accounts offered by the largest U.S. banks often pay 0.1% APY or less. Apple's new Savings account offers a 4.15% APY on deposits. For someone who has $10,000 in their account, this can mean an additional $400 or more in income compared with a big-bank savings account.

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Rate info Circle with letter I in it. Our Disclosure: Annual Percentage Yields (APY) is subject to change at any time without notice. Offer applies to personal accounts only. Fees may reduce earnings. For High Yield Savings accounts, the rate may change after the account is opened. Visit synchronybank.com for current rates, terms and account requirements. Member FDIC
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4.25%
Rate info Circle with letter I in it. 4.25% annual percentage yield as of June 12, 2024
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Several technology-focused banking platforms offer excellent interest rates on savings accounts, and some are even better than what Apple pays. But there can often be a catch. For example, the SoFi Checking and Savings offers a up to 4.60% yield on deposits as of this writing, but to get this, you'll need to set up direct deposit. The only requirement to get the 4.15% APY from the Apple Savings account is to be a customer of the no-fee Apple Card.

A trusted brand backed by an excellent bank

Given the recent regional bank failures and the prospect of more to come, trust is more important in the banking system than ever. This is why banks like JPMorgan Chase and Bank of America have seen deposits increase recently, despite having some of the lowest interest rates in the industry -- customers trust these institutions to keep their money safe.

Well, Apple is one of the most trusted consumer brands in the world, but it's important to point out that Apple isn't becoming a bank itself. Its Savings account is actually being held at Goldman Sachs, the same bank behind Apple's credit card.

Not only is Goldman one of the oldest and most successful names on Wall Street, but it is in the same category as the big banks when it comes to risk. Without getting into a lesson on how bank regulation works, institutions that have more than a certain amount of assets are classified as systemically important financial institutions, or SIFIs. You may have heard these referred to as "too big to fail," and for good reason. They are subject to far more regulatory scrutiny than smaller banks, and the government has made it clear that money at these banks is safe. Goldman Sachs is a SIFI, so depositors have a rare combination of yield and peace of mind.

Tons of Apple users

Finally, one of the biggest reasons for the success of Apple's Savings account is the company's massive user base. It doesn't take a high percentage of Apple users to adopt a new product for it to be successful.

There are over 1.2 billion active iPhones today, and the latest figures show that there are 6.4 million Apple Card accounts that would be eligible to use the Apple Savings account. With an estimated 240,000 accounts combining for the $1 billion in deposits in the first few days, this means that less than 4% of Apple Card users have taken advantage so far.

Is the Apple Savings account worth a closer look?

The Apple Savings account is certainly a competitive banking product, especially for people who are already Apple Card users. However, there are plenty of excellent high-yield savings accounts in the market and Apple's might not be the best fit for you. Be sure to shop around and weigh the pros and cons of several accounts before deciding on the best place for your savings.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

Two of our top online savings account picks:

Rates as of Jun 13, 2024 Ratings Methodology
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SoFi Checking and Savings Barclays Online Savings
Member FDIC. Member FDIC.
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Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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= Excellent
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APY: up to 4.60%

APY: 4.35%

Min. to earn APY: $0

Min. to earn APY: $0

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