Apple will soon offer users of its eponymous banking service the ability to earn money from their savings in a high-interest account that pays far more than what’s available at conventional banks.
The California based technology giant said Monday that Apple Card customers can sign up for a new account that currently pays out 4.15 per cent annually on any cash in it.
The account itself would be run by U.S. investment bank Goldman Sachs but functionally exist within Apple Card, which Apple launched in 2019.
As it stands, only U.S. residents are eligible for an Apple Card, but Canadians and others around the world do have access to other banking services through the company, notably Apple Pay, which allows users to pay for purchases at payment terminals by linking their mobile device to a linked credit or debit account.
The new savings account will be integrated with the Apple Card, but because Apple Card itself is limited to U.S. residents, Canadians won’t be able to sign up.
Apple hinted last fall that it was planning to add a savings account functionality to its bank offerings, but had few details. On Monday, the company announced the new account comes with no fees, no minimum deposits and no minimum balance requirements. Rewards points that users accrue when they use their card will automatically get stores in the high interest savings account, and they can add cash to it. But the funds can’t be withdrawn directly from the account, and will have to be transfered to a linked chequing account.
Interest rates have skyrocketed of late as central banks around the world have raised lending rates to slow down inflation. That has driven the cost of borrowing sharply higher, but so far, the same trend hasn’t happened to savings accounts.
According to the Federal Deposit Insurance Coproration (FDIC), the U.S. banking regulator, the typical savings account at an American bank pays about 0.37 per cent right now. It’s possible to get better rates at other lenders, but such accounts often come with minimum deposit requirements or other strings attached.
It’s a similar story in Canada where savings accounts at the major lenders are all below 0.3 per centand even high-interest accounts pay about two per cent. Credit unions and other smaller lenders typically offer higher rates.
