Apple Card’s new high-yield Savings account is now available, offering a 4.15 p
apple.com
apple.com
From the footnote 1: https://www.goldmansachs.com/terms-and-conditions/Deposits-A...
MAXIMUM DEPOSIT LIMITS
The maximum balance for your Account is $250,000. We will include any funds deposited into your Account but not interest
or Daily Cash you’ve earned when determining the maximum balance limit. We may reject and return any funds transfer if
your Account exceeds the maximum deposit limit. You authorize us to return any funds that exceed the maximum balance
limit by check.Apple would have to be backed by something other than the dollar for this to be remotely possible.
1. GS going under and Apple bails out its customers who hold these accounts.
2. GS going under and the US government bails out everyone.
Both are as close to 100% that this conversation is effectively meaningless. I just think it is an interesting hypothetical.
The first has almost 0% chance of happening. Apple will never bail out its customers for insured deposits, as that money is guaranteed by the FDIC. Why would they effectively "donate" money for free to the FDIC?
The only universe in which that happens is the one in which the FDIC somehow is insolvent and the federal government abandons the FDIC and the cascading effects of the latter (which would almost certainly create a national if not global financial crisis that makes 2008 look quaint) somehow don't affect Apple enough that they could use their additional cash on hand to pay their entire banking liabilities. Which is pretty unlikely, given that most non-banking companies don't have cash reserves that large that they can dip into at a moment's notice. Even Apple, the world's biggest company, has "only" $50B in cash on hand as of last quarter, which sounds like a lot but would not be enough to weather that kind of a crisis and still be able to make depositors whole even if they felt that it was their responsibility.
Yes, this was a hypothetical based on a situation in which these accounts weren't protected by FDIC, either by design or some problem with the FDIC. Apple isn't going to donate money to the federal government. But I could see it donating money to its customers as an attempt to retain the value of its brand.
>The only universe in which that happens is the one in which the FDIC somehow is insolvent and the federal government abandons the FDIC and the cascading effects of the latter (which would almost certainly create a national if not global financial crisis that makes 2008 look quaint) somehow don't affect Apple enough that they could use their additional cash on hand to pay their entire banking liabilities. Which is pretty unlikely, given that most non-banking companies don't have cash reserves that large that they can dip into at a moment's notice. Even Apple, the world's biggest company, has "only" $50B in cash on hand as of last quarter, which sounds like a lot but would not be enough to weather that kind of a crisis and still be able to make depositors whole even if they felt that it was their responsibility.
The FDIC might not have the money to cover a failure as big as Goldman Sachs and the cascading effects (a quick Google search says the FDIC has $128b in the insurance fund and GS has $110b in consumer deposits, so it seems close at the moment). The big question is what would the US government do in response to a failure this big. Would a polarized and split Congress want to or even be able to compromise on a rescue plan? What if the issue is specifically at Goldman Sachs due to corruption or some other crime rather than an issue with the overall economic environment? Like I said, the odds of this situation are extremely low, but so are the odds of Apple accepting the destruction of their brand.
An asteroid the size of Texas just fell into the Pacific? What will happen to my FDIC insured funds!?
Yeah, I would be more worried about the USD itself becoming unstable than about the FDIC not paying out insured deposits.
And at that point, Apple would have far bigger concerns than the brand risk of people losing their Goldman-held savings.
To be clear, there is a difference between the ability to do something and the will to do it. That is why I referenced the debt ceiling. The government could easily spend more than the debt ceiling. It is also unlikely there would be serious repercussions to just abolishing the debt ceiling. And yet we constantly have to have the debate of whether we should raise the debt ceiling. It is a game of political theater. Are we sure something similar could never happen with a bailout big enough to save Goldman Sachs?
They are highly liquid instruments, but in a bank run, Apple likely wouldn't be any more able to convert them to actual cash than any other party.
* If you need cash in an emergency it's possible that Apple stock will be negatively effected by the same emergency.
* Anything that causes FDIC to fail will negatively impact Apple Stock, causing you to lose a lot of the value you were trying to protect against that exact situation.
* Cash in a bank account is more liquid than a stock. It's common for the sale of a stock to result in usable cash after 3 business days. I can withdrawal from a savings account 24/7. If you have an unplanned and urgent situation cash is fantastic.
* The odds are higher than the US Government stays solvent over the next 120 years than Apple does. Governments are designed for more long term stability than companies.
HOW AN ACCOUNT CAN BE OWNED
Individual Account
An Account may only be owned by one person.
Payable-On-Death (“POD”) Designation
You may designate one or more beneficiaries (up to six) to receive the funds upon your death for your Account.
FDIC is a much, much, better explanation.
And Apple isn't catering to small business here.
https://www.betterment.com/cash-portfolio#:~:text=FDIC%20ins...).
Insurance is $2.75M but IBKR isn't a bank and isn't subject to the same problems in the same ways (e.g. bank runs).
Now that they're announcing Savings, I'm thinking to re-evaluate my Ally savings account. Apple's is better, but I'm already seeing mentions of Betterment, Robinhood, and Wealthfront here. What I'm looking for is a no-fee, high yield, good FDIC insurance. I'm also looking to start a long-term investment account for my young kid, and it would probably be convenient if I could do them both with the same bank.
Any recommendations?
But you can choose to invest your cash directly into the high yielding money market funds by placing a trade.
The relevant tickets are FDRXX and SPAXX.
Do note that this is different than changing your core position.
They're money market funds so are covered by SIPC insurance.
I think you are confusing SPIC insurance that covers you if the brokerage firm files for bankruptcy. No matter the losses from a brokerage firm, you will be covered by SPIC insurance as:
The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.
Privacy guarantees are an undervalued benefit.
Amex is sometimes used to abbreviate American Express.
(Personally I have a American Express Blue Cash Preferred card for the 6x on groceries, streaming services, 3% on gas.)
https://www.ally.com/bank/cd-rates/
For kids we did go with Chase, and I maintain a balance to avoid fees and allow for a monthly transfer for allowances. I have a recurring transfer from Ally to Chase to keep things level. Easy to setup and forget about.
https://account.chase.com/banking/first-banking
That aside... I think you may want to look at US Treasury "Series I Savings Bonds". The rate changes every 6 months but you can lock in a 6.89% for that time (if you get them before April 30, 2023). Again, you need to keep them for at least a year and other terms apply. Their website is not great but once you get over that....
Sometimes there are gimmicky rates that are nice to take advantage of for a bit, but they usually have some annoying requirements to get the high rate and limit the amount you can get.
If Apple isn't losing money on a temporary rate to get some customers then Ally will have it's rate go up, as it's one of their main competitive advantages.
Also, the Chase cards are usually better to get as the opening bonuses are among the highest out there, making them far more advantageous to get for overall straight cash back. Ideally you get the less useful cards like target and Amazon after getting their line of cards. Discover and Chase often times will have Amazon and target for five percent on their quarterly cards as well.
Chase points on one of their Sapphire travel cards are also extremely valuable. Some of their travel partners can have offers that reduce the hotel prices down to fifty percent or more of the cash price. And the guaranteed increase in point value for plane tickets is also very nice. Never been able to justify the cost of their more expensive Sapphire, but the Sapphire preferred usually pays for itself after just one trip.
The one thing to be wary of is their 5/24 rule, but usually that only hits churners.
Edit: In the very least it will educate many uninformed folks like myself they are getting shafted at their current banks. Double edit: Thank you for all the helpful links and information!
Park 250k in there and you're getting over $950 a month right now. Spread those chunks around multiple banks, assuming you have those chunks, and you'll have a decent modest income while these rates last.
And yes, I'm doing exactly this and no, I don't have a day job right now and yes, my overall holdings are still going up. This is an unusually good time to be holding cash.
Also I know the trivial inflation arguments about how I'm hypothetically losing purchasing power. But again I don't need hypothetical things to be bought, just mine.
Right now it's covering my bills and the number is still rising. This strategy is subject to change without notice.
Until someone like Apple comes in with a one click UX to open a bank account and set everything up, existing banks have no incentive to make existing clients happier because they're extremely unlikely to move banks (or even to open a better yielding type of account)
I don't visit my bank either in most cases. However, I can if I need to. That's a different kind of peace of mind compared to a e-bank that has no customer-facing physical location.
Starling also has a banking license.
I stopped using BoA because the in branch experience has declined. I never used Wells Fargo for obvious reasons.
My previous employer had at least two different Ceridian installs, one was for W2s and the other was for regular payroll, they used different passwords, half the time they'd expire out by the time you logged in and you'd have to get HR to reset it, etc. And even if you want to go back and mess with it, when does it take effect? A lot of people don't have a cushion sitting in a bank account and can't afford to have a paycheck disappear and then spend a couple days pairing their credit card payment to the new bank account etc.
That's why you can get those $600 promos or whatever if you open a new checking account and turn on an auto-deposit. Most people will set it and leave it.
Banks capitalize (hah) on unsophisticated deposits to underpay them and profit from the spread. Check if your brokerage has a short dated government securities money market fund (Fidelity = SPAXX [1], Vanguard = VMFXX [2]). Not investing advice!
[1] https://fundresearch.fidelity.com/mutual-funds/summary/31617...
[2] https://investor.vanguard.com/investment-products/mutual-fun...
Capital One is paying 3.5% right now for "Performance Savings".
Note that these rates change in relation to the federal interest rates. You'll sign up for a great rate, and in 3 years it can go back down to a half percent
Best high-yield savings accounts in April 2023:
https://www.bankrate.com/banking/savings/best-high-yield-int...
Do you have a more preferred financial website?
Meanwhile money market funds are yielding over 4%. Interactive brokers is offering over 4% and it’s insured to some ridiculous amount (standard 250k + extra coverage from Lloyds of London).
You can buy 3 month or 6 month treasuries with yields well over 4%.
I don’t know why anyone would want to keep cash in the big banks, unless they really need it liquid in the short term.
I just look at Wells Faro, and they have $900 billion in interest bearing deposits. With NI of $16 billion, just going up to 1% will wipe out 55% of profit.
My point was essentially to stay viable, the bank needs to have some profit margin. Here is a classic business choice between maintaining or improving profit margin, and maintaining or improving services.
So my point was they could obviously remaining viable while offering higher rates, they choose not to because it increases short term profit - if they think they are losing enough business to other banks with better rates, presumably they will start raising them to compete.
The fact that they can't really meet current federal rates and stay profitable is interesting, it suggests they have some pretty heavy cost centers to carry.
0.3%, or something similar.
I’ve been using different banks with real high yield for a long time. My current choice is almost 4% (after climbing a ton last year with all the hikes). A number of banks offer similar rates.
Some places are starting to offer non trivial rates on checking. I think AmEx may be paying over 1% interest on their checking accounts (I know, think it’s new) instead of the common 0.0005% if you’re lucky enough to get interest at all.
Sadly you have to shop around. Even credit unions often don’t offer good savings accounts, even if better than the big banks.
Credit unions are typically more competitive than big banks in general. If you truly want to make the most out of every penny then you should be unbundling your bank services (checking at CU A, savings at CU B, credit at X, etc.). This is especially easy with credit unions because they are typically part of a cooperative that streamlines inter-bank transfers (it usually takes < 24hr to transfer between my savings and checking).
There can be higher yield options for long-term savings (depending on market conditions at the time). The classical wisdom is to keep your money in CDs[1], but you're locking in an interest rate for <duration>, so if interest rates go up you could lose out.
If you're saving for more than a couple (1-3) of years you really should be looking at handing over some of your money to someone who profits when you profit (money market or brokerage). Remember that even at the current ~5% of CDs, the banks have ensured that they will be making a profit even during moderate market turmoil.
It's also not a bad idea to invest in something that is guaranteed to maintain value (such a gold or platinum), to hedge against recessions.
I don't agree CUs are more competitive always than big banks. I think for the most part big banks have better credit card offerings for example. There are lots of reasons someone would go for a big bank like Chase for credit cards.
My CUs are west-coast, and I moved to the east coast last year. I haven't run into any problems. On the off-chance I had to walk into a brick-and-mortar bank (depositing cash is about the only reason I'd need to do that, so never), I could visit a coop instead.
> I don't agree CUs are more competitive always than big banks
Absolutely. We're on a mainstream brand miles reward card because my wife likes traveling. CC rewards at my CU were basically worthless - the rates were pretty competitive, though.
That's the "wholesale" savings interest rate. The less you are making compared to that, the more your bank is profiting.
As an aside, the interest the banks earn from this is newly created money.
With 17 trillion dollars currently deposited, that's $833 billion of inflationary pressure every year.
[0] https://www.federalreserve.gov/monetarypolicy/reserve-balanc... [1] https://fred.stlouisfed.org/series/DPSACBW027SBOG
> With 17 trillion dollars currently deposited, that's $833 billion of inflationary pressure every year.
specifically, this part, what do you mean by pressure and which way is it pushing
> that's $833 billion of inflationary pressure every year.
Needless to say I'm going to be trying it out! Thanks Apple!
Edit: It looks like they have a checking account too (https://www.betterment.com/checking), which also has better terms than Chase.
People who know more about this stuff than me: is there any reason not to just move over completely? Technically Betterment is not a bank, but it sounds like these cash accounts are backed by accounts at banks that Betterment manages for you, which means they're insured (and in fact, you can insure more than $250k because multiple banks are involved). Is there any downside I'm not seeing?
There is some small risk that if betterment folds, those funds aren’t protected. It’s afaik never been really tested in court. FDIC would protect only the underlying bank - not betterment. It’s a very small risk though. But a real bank doesn’t have that risk.
A lot of these small investment companies like betterment or wealth front are on pretty shaky financial grounds - so it could come up sooner than expected.
Is it possible they'd try to claim first-dibs on your funds that are living in other banks if they went under and had to pay back shareholders?
Typically when companies/banks do this sort of pass through banking, the money isn’t actually held in a personal account at the host bank. It’s usually held in one giant account that had a “managed on behalf of many” type structure. This is legal from an FDIC perspective, but it’s held in the not-banks name (aka betterment). So if betterment goes into debt, it’s a grey area if they could use that money.
They could also mismanage money during that “temp uninsured” period. Again, they’re not a bank so they don’t necessarily comply with banking regulations so you don’t know how long that period is or what’s happening.
There are real regulated entities (banks brokers credit unions etc) that offer good rates and less risk. I don’t know why you’d expose yourself to any risk for 0.x% APR. Even Goldman Sachs (the underlying bank of apple) lets you get a good interest rate on savings directly.
Here's what their terms say:
> Upon Betterment’s instruction, Betterment Securities, acting as your agent, will open one or more Demand Deposit Accounts (“DDAs”) at Deposit Banks. Betterment Securities, as your agent, may also open one or more linked money market deposit accounts (“MMDAs”) at the Deposit Banks as indicated on the Deposit Bank List. Deposit Accounts are non-transferable.
> ...if you decide to terminate your participation in the Program, you may establish a direct relationship with each Deposit Bank by requesting to have your Deposit Accounts established in your name at each Deposit Bank, subject to each Deposit Bank’s rules with respect to establishing and maintaining deposits accounts.
This makes it sound like separate bank accounts are opened for each customer, though possibly not in the customer's name initially (with Betterment Securities acting as the customer's "agent"). So maybe better than thought?
If you do have that much in short term savings, then that savings interest is taxed as ordinary income, pretty bad for a high income tech worker.
I'm currently very happy with the Vanguard Cash Plus account for savings (https://investor.vanguard.com/investment-products/cash-inves...), though I think it's invite-only. I see you've got plenty of good suggestions in replies, though - you'll do fine. Good luck! :)
1. The rate is 0.25 percentage points higher than Goldman’s own Marcus account. Apple extracted 0.25% in rent from Goldman and gave it to their customers.
2. FDIC insured through Goldman, and the max deposit is the FDIC limit, $250k.
3. Easily usable in Apple Pay, so almost like a high interest debit account.
I’m moving a bunch of cash over once I set it up
edit: unclear whether deposits are allowed, or just Daily Cash from Apple Card.
edit 2: super easy to set up on my iPhone and yes, you can transfer from any linked bank account via ACH
Even higher rates. Still FDIC insured like normal. Doesn't plug into Apple, but has plaid-like integration so you can just log into your other account from UFB and do a transfer easily.
Perhaps I'm misreading the article, but isn't this just for Apple earned rewards, not as a general savings account?
> To build on their savings even further, users can deposit additional funds into their Savings account through a linked bank account, or from their Apple Cash balance.
You can also transfer your current rewards balance to the savings account.
US 3-month Treasuries are paying 5.125% and are State tax free so if you're not planning on touching the money in the near term that's an even better position. They're about as liquid as securities get so if you do need to sell them for cash there's not going to be any meaningful hit to their valuation. At most it'll be a couple bucks of transaction fees (if that) which would easily be made up by the additional interest and tax savings.
example: https://fixedincome.fidelity.com/ftgw/fi/FILanding#tbindivid...
But a retirement dream home 20 years from now, throw it in stocks and bonds according to an asset allocation[0] you're comfortable with.
[0] https://investor.vanguard.com/tools-calculators/investor-que...
The answer to these questions are going to be different for each person and I obviously cannot answer them. What I'm trying to say is the money isn't wholly illiquid.
In the current situation with the 3m at 5.125%, if you were the most unlucky investor in the world and bought it today, and the Fed immediately announced they're raising target rates by %1, and the market actually immediately responded with a commensurate %1 increase in the market rate, and you had to liquidate your position immediately for cash, you'd be down about 0.2375%.
A more realistic 25bps (i.e. .25%) rate hike would be .0605%. And again that's if it happens at exactly the moment after you've acquired the treasury. For every day that passes, the time to maturity shortens even further, so the current price impact to any interest rate change would lessen as well.
If you know you need the cash then yes keep it in a savings account. But if you're unsure, you could a lot worse than buying 3-month T-bills.
Nobody should be moving money around different savings accounts for yield... use products designed to make it easy.
https://www.blackrock.com/us/individual/products/314116/isha...
[0] https://investor.vanguard.com/investment-products/cash-inves...
(There's also the consideration - and, to be clear, I'm not supporting this myself, particularly since "timing the market" is often a fool's errand; but it's worth considering to recognize how your first-order reaction misses many nuances - that if you have a strong conviction that a stock market crash is imminent, then holding dollars that devalue due to inflation to then be able to buy in after the crash is still profitable)
Your response suggests that the only way to protect yourself is by holding cash and taking the loss as some sort of convenience cost. I'd say that there are other ways to hold liquid funds that try to combat inflation beyond just gambling in the stock market. To preempt a request for an example, gold is a popular method. And I know HN hates this, but the current bull market in crypto, is another. For that, I'd suggest more than just buy/hold and really delve into the lending/borrowing markets in DeFi.
Not that that's always way you want! But most people need some sort of emergency fund, and very few things are liquid enough and stable enough to meet this need well. Laddered CD's, etc. can work but are fiddly. Cash accounts are king here for a reason.
On the long term investment side: sure cash accounts are a bad idea. On the other hand, the idea that the stock market is "gambling" but defi lending isn't is - idiosyncratic.
I'll accept "disingenuous" was perhaps premature, apologies - you could also just be confused.
Both gold and crypto are poor vehicles for original commenter's need.
My comment about defi was just because you characterized the stock market as "gambling" (somewhat unfair, but certainly can be), but for somehow failed to annotate defi as an alternative that is "even more so gambling"...
Why is gold a poor vehicle?
> My comment about defi was just because you characterized the stock market as "gambling"
If humans could predict the future, we wouldn't have gambling. That's what makes the stock market a gamble. Can you offset that with derivatives, like options? Sure! That said, you're showing your naivety around DeFi with your response. Lending/borrowing isn't a gamble beyond the underling risks involved.
Physical gold is too usually too illiquid. Digital gold solves that, but in general the short term volatility makes it imprudent for emergency funds.
> Lending/borrowing isn't a gamble beyond the underling risks involved.
This is called burying the lede, I believe. The underlying risks include significant structural risk on the institutions and vehicles themselves, not comparable at all to conventional banking.
NB: I was never suggesting stock market for emergency funds either. Investing is investing, and involves risks. If you want a useful distinction between investing and gambling, you would have both represented in stock market. I would suggest a more nuanced view would at least try to separate the two as useful concepts.
It depends on what you define as an emergency fund. If your view is that the macro economy (especially in the US) is not going well (heading into an inflation emergency), having divested into something other than dollars is the correct play here.
> not comparable at all to conventional banking
That's the point though. At least for me, I've long ago lost faith in conventional banking (aka: tradfi). This is why I put the time and effort into deep learning about DeFi.
Today, DeFi is relatively tiny and cannot support the larger asset markets. My hope is that it grows. As someone who found the internet in 1991 and watched and participated in that early growth, I don't see a reason why it can't happen again for something like DeFi.
Ignore the 'crypto scam' aspect of it all. There is a lot of positive things in 'being your own bank'. Early adopters of this risk are definitely reaping windfalls from it. Making a more general statement and not pointed at you directly, it is easy to sit on HN and shit on crypto and much harder to spend time listening to what some latchkey is trying to gently guide you towards, without being a shill.
All I'm saying is any discussion including it has to realistic that it is fundamentally a risky at current time. Will it outgrow that? We'll see.
> It depends on what you define as an emergency fund. If your view is
Now this is just moving goalposts, why do that? Everyone was talking about emergency funds in the usual sense. Introducing hedging against the USD based economy is at best a distraction (even if that's what you personally want to talk about) and counterproductive.
(While still disagreeing with you that crypto fits the requirement-profile of an emergency fund :P )
You could easily argue that this guy made poor decisions with his money, but it's also all too easy for investors to attribute their success to skill, not just a few lucky bets.
In the long run, my understanding is that few things will consistently outperform plain old index funds.
Doing the research and buying a house/condo in the right area, at the right time, can easily outperform an index fund. It is probably harder to do than just plumping money into an index fund, but it is a good example here for how you can allocate your funds in a less 'conventional' way.
Nobody said that making money was easy. =)
To be clear, my requirements are:
* Near-instantly liquidatable (a day is maybe ok, hours is better).
* Value is not volatile - explicitly, extremely high likelihood that, whenever I need to extract value from it, the value will not have significantly lowered (I assume there's some economic theorem which states that this puts an upper bound on the interest I can expect to earn).
* A distant third is "combats inflation as much as possible", but I recognize that a lower interest rate will be earned because of the first two requirements.
EDIT:
> the only way to protect yourself is by holding cash and taking the loss as some sort of convenience cost. I'd say that there are other ways to hold liquid funds that try to combat inflation beyond just gambling in the stock market.
I suspect we may have our priorities crossed. I'm not trying to hold liquid funds that try to combat inflation - I'm trying to hold liquid funds that have a strong guarantee of non-volatility. I agree with you that if the constraint of volatility is relaxed, then there are many better (higher-rate-of-return) options than a HYSA.
"For that, I'd suggest more than just buy/hold and really delve into the lending/borrowing markets in DeFi."
Crypto itself is volatile, however there are more complex (and potentially risky depending on how you look at it) ways of mitigating the volatility via lending/borrowing (and options for that matter) DeFi markets. All of which are easily liquidated, in seconds and low transaction costs (that are offset by earnings).
Of course a lot of this is still very early days in terms of knowledge and exposure. That's a big reason why you might not be aware of what's possible in DeFi.
Also, external deposits are allowed from a linked bank account.
https://www.nytimes.com/2023/04/18/business/goldman-sachs-1q...
It is also in Apple's best interest to drive deposits, as most of these agreements end up with the bank (GS) and the provider (Apple) splitting the interest earned. Even if they are currently passing most of the interest to the customer for now, they will want to build up deposits as high as possible so they can lower rates in the future and print money.
While not huge on an individual basis, it could be a large $$ across the entire Apple Card user base (from Goldman's perspective)
Their cult following takes care of that honestly
https://phatwalletforums.com/topic/109/best-nationally-avail...
https://www.doctorofcredit.com/high-interest-savings-to-get/
4.15% is good, but there are better options, including with big banks like Bank of America (4.50% currently, though with an initial deposit requirement of $100k).
TD is not even close to offering 4% https://www.td.com/ca/en/personal-banking/products/bank-acco...
And RBC only gives higher interest rates for 3 months https://www.rbcroyalbank.com/investments/psi/hisa.html
However the GIC is not like a savings account where there are minimum balance requirements to get an advertised rate.
https://resources.bankofamerica.com/email/render-resource/40... https://olui2.fs.ml.com/Publish/Content/application/pdf/GWMO...
Big banks like Chase and Morgan Stanley have similar deposit products tied to their investment/wealth management arms:
https://www.jpmorgan.com/wealth-management/premium-deposit https://www.morganstanley.com/campaigns/wealth-management/qu...
They are not really competitive due to the high initial deposit or total balance requirements, as there are smaller banks that offer higher yields and no requirements. These products mostly function as an incentive for higher net worth individuals to maintain the relationship with their existing big bank.
First LLMs, now this. This is absolutely revolutionary technology, and it's no surprise that it originated from a $2.6T company with an absolute army of the smartest engineers on the planet. The technology preview is VERY impressive. Apparently you can take some of your money, and escrow it with Apple, who will then pay you interest on the balance. Absolutely insane space age technology.
2023 is such a wild year in big tech, with all these revolutionary inventions like "savings accounts", but it's disappointing that Google didn't get there first. Sundar really needs to launch a Manhattan Project style effort to get ahead of this. I heard a rumor that Microsoft is working on this crazy stealth project with OpenAI called "checking accounts", where not only can you deposit money, but you can ALSO draw against it with a 100% carbon-neutral device called a "check".
If there's any truth to this rumor, buy MSFT and sell GOOG. It's pretty funny that even Kurzweil didn't anticipate this level of ridiculous technological achievement. The Singularity is here, baby!
> Starting today, Apple Card users can choose to grow their Daily Cash rewards with a Savings account from Goldman Sachs, which offers a high-yield APY of 4.15 percent
Meanwhile, Marcus by Goldman Sachs just bumped their APY to 3.9%.
https://www.bankrate.com/banking/savings/marcus-savings-rate...
However, given recent trickery around stealing iPhones and taking over entire accounts: https://www.wsj.com/articles/apple-iphone-security-theft-pas...
I worry this makes iPhones that much richer (heh) of a target. I would be hesitant to add a significant amount of money to my wallet’s savings account as it would create an incredibly financially potent single point of failure in the event my iPhone is stolen and compromised.
A financial product that is only available to iPhone users seems like a reasonable business, but if it's only available in one market it's limited and you can't build much else on top because it's slicing the market to granularly.
I realise that international financial products are hard, but isn't that the reason why Apple is delegating the finance part to Goldman Sachs (and I suppose, theoretically, others in other countries) – so that they don't need to deal with the nitty gritty in each region?
a true sweet spot
Less than half of French people even have a single credit card
Got a source ?
https://www.cartes-bancaires.com/cb/chiffres/ says 76M cards over a population of 67M (50M for people over 18yo). Sure some people have multiple cards, but that sounds hard to believe. (Also that's not counting non-CB credit cards. Those are pretty rare in France, but I have one)
(Maybe I'm misunderstanding what you said in "a single credit card")
adoption across countries https://www.statista.com/statistics/968220/credit-card-owner...
your link seems to be confusing debit cards with credit cards
Apple card is not a debit card, which is widely used in Europe, with much less credit card/debt normalized vs. the US
I don't understand how is that relevant to savings or Apple Card though? I mean sure Apple Card is currently a credit card, but I don't think that's relevant? In France most banks just give the customer the choice between credit and debit cards, and we just mostly prefer debit cards. Apple could probably just do that as well.
That being said, I guess the reason there is no Apple Card in Europe, is that you can't make 2%+ markup on card payments.
That’s a pretty unfair characterization of CC borrowing in the US. I’m sure there are some instances of that but most people have either a minimal amount on CC or none at all.
I thought myself fairly responsible until the pandemic hit and now I'm nearly $18K in the hole on credit cards I'm crawling out from under slowly.
They could expand to Europe and Canada without too much effort, but I’m not surprised to see them start with the US.
But the recent bank failures have shown that the US government did not even hesitate to cover depositors who put themselves at risk. Goodbye moral hazard.
I wonder how long that APY is going to sit at that level (and what the maximum balance limit is), given than Goldman Sachs' Marcus accounts offer 3.9% and I don't think there's any balance limit and there is no minimum balance requirement either. https://www.marcus.com/us/en/savings/high-yield-savings
EDIT: I see the max balance limit is $250k https://www.goldmansachs.com/terms-and-conditions/Deposits-A...
Has anybody tried this? Any advice?
edit: their ad is slightly misleading. Rates start at 1%, go up to 3% with a regular direct deposit, and up to 4% when reaching 100K net deposits.
They are not a bank, but spread your deposits over multiple banks if needed in order to achieve high FDIC insurance limits.
They also issue revocable unique login codes for some 3rd party app authentication, which I appreciate a lot. Some other 3rd party connections just use Plaid or similar.
I just don't want to type in my other bank's credentials into Wealthfront. I'm sure they know I don't but won't let me avoid it. So I'll continue to avoid them.
I wonder if that's part of their deal with Apple, and if/how Goldman Sachs is incentivized to offer a better rate to their Apple-associated product then their own in-house brand.
I think the 0.25% extra interest they are offering is reduced marketing expense (general advertising but also things like getting an extra 1% for referring/being referred).
Sometimes Apple is too US centred.
Apple will only offer its card (and now savings account) outside the US if and when it can find a partner that is willing to do what it has persuaded Goldman Sachs to provide in the US, the high interest rate we're discussing being one example, and it thinks doing so will be worthwhile in terms of addressable market and potential profit. This means that a) most countries will never get Apple financial products, and b) it's quite possible that Apple Card will never be available outside the US, not even in fellow high-income countries with comparable iPhone adoption rates.
What's next? With Apple Watch and Health Monitoring the next step could be Apple Health Insurance? or Apple Mortgage?
I don't see any similar need to get into health insurance though.
https://9to5mac.com/2023/02/16/apple-card-future-goldmans-sa...
> In January, a report indicated that Goldman Sachs had lost over $1 billion through its partnership with Apple for the Apple Card. Despite this, however, the company says that it remains committed to its partnership with Apple and expects it to be lucrative in the long run.
This is about offering a consumer product, and attempting to disrupt the market for banking services in the US.
Savings Connect [1]: 4.50% APY, no minimum balance, no fees
Platinum Savings [2]: 4.75% APY, min. $5000 balance to qualify for APY, but once you qualify 4.75% APY on whole balance (not just balance above $5000)
I use the savings connect personally and am considering whether or not I want to open a platinum savings account.
First of all, there was nothing "lazy" about the brand plastering. I am 100% confident that thousands of hours were burned in meetings between GS and Apple executives over precisely the manner and terms of said plastering.
Second, I don't think you fully comprehend what they've done, here. When you transfer money into your Apple(tm) Savings(tm) Account(tm), you have to modify a 64-bit fixed-point integer in TWO separate computers somewhere. Not only that, but you have to do it in the context of this Alien Technology called a "transaction", which requires all kinds of crazy shit like locks, semaphores, mutexes, etc. Then it has to get fsynced to a DISK, man! A disk! Sure, the old Apple may have been cool and all, but if you think Woz knew anything about writing to a disk, I'm not sure what to tell you.
Oh, and then, if that's not hard enough, you have to write a log of the event somewhere, with a timestamp. Do you have ANY IDEA how hard timestamps are? I bet you a thousand Apple engineers wracked their brains for weeks over how to represent it. Julian? Gregorian? Unix Epoch? Picoseconds since the big bang? This is NOT trivial engineering, here.
And the interest calculation? I bet you're thinking just use FMUL? Ha, enjoy your $0.0700000000000000000001 interest payment, dumbass. Apple engineers are smarter, they know that you need to package up the balance data into JSON, obtain an auth token from Tim Cook, sign the data with another token, ship the data off so some insane microservices rube goldberg contraption, and poll the event queue until the answer comes back. Sure, it's STILL going to have an IEEE754 mantissa error in it, but at least it was done The Right Way.
It takes ten thousand engineers with an average IQ of 130 and an annual comp of $300k each to figure out how to modify 64 bits inside a distributed transaction and then flush the results to this disc made of iron and glass spinning at 7200rpm. Give Woz or Hertzfeld the most lubricated office chair on Earth and I guarantee you they can't spin that fast. THAT'S the technology here.
And don't get me started on the app. I bet you anything that prior to modifying ALL 64 bits, you have to allocate half a GB of ram in a janky Swift runtime in order to draw some pixels first. Read some books, man. The old Apple were such mewling pussies they were all like, "OH NO THE UI COMPONENTS ARE EATING 4KB OF RAM, WE HAVE TO OPTIMIZE THIS!". Not anymore. New Apple doesn't care about any of that. Just throw 128MB of random shaders at the GPU and it will work itself out. Hell, why even bother with that? Just launch webkit, every other app on the planet does anyway.
Anyway, I'm just saying read some books and educate yourself on how incredible this new technology is. My grandmother used to hold up the checkout line at Kroger to write checks from her checking account using ANCIENT technology, and it was really suboptimal for everyone involved. Now Apple comes along and BAM! Checkmate, Gertrude. Good luck holding up the line with your SAVINGS account. This is what true innovation looks like.
Anyone have thoughts?
And my favorite:
SaveDifferent
https://www.marcus.com/us/en/savings
Seems like they want people to go via Apple.
Citi's fancy "Citigold Private Client" savings account for people with $1M+ in it is at 0.35%.
(My favorite bit about that account: they have an interest rate tier starting at $10,000,000,000,000+ on https://online.citi.com/US/ag/current-interest-rates/savings...)
In the very least it will educate many uninformed folks like myself they are getting shafted at their current banks.
I also wouldn't call it below market rates. I'd call it "below the highest market rate" because rates for savings accounts vary and there isn't a standard "market rate".
Other reputable banks like Amex or Discover are only returning 3.75% right now.
Amex slightly lower, citizens access slightly higher.
Banks looking like they may lead to a more questionable experiences have even higher rates to offset higher chance of frustrations.
https://www.cit.com/cit-bank/bank/savings/savings-connect-ac...
It is also part of First Citizens which is a decent sized institution:
The delta between, say, 4.55% and 4.8%, on the amounts I'm holding, may not be worth the potential extra headache of working with a lesser known bank. Introducing more risk (or just taking time to open more accounts) to earn, say, an extra $8/month... at some point becomes not worth it.
UFB, I note, does not offer a debit card.
4.15% is not the highest yield currently available, but it would put them fourth on this list[0] of ten, making them better than average even on that rarified list. This without fees or minimums, which would put them behind only Betterment, which is not a bank, but a brokerage account.
As always with an Apple offering, there are ways that some people under some circumstances can find better terms so long as they don't care about some of the benefits Apple is offering, but that's a very long way from "below current market rates," and comes from a company a lot of people are already trusting with their funds.
It's fine if you already have an account with UFB, carry on! And next month when it's a different company leading the pack, transfer. And the month after that, while Apple is still consistently in the top five.
0. https://www.investopedia.com/best-high-yield-savings-account...
It's a common tactic to offer premium rates, and then drop the rate precipitously once they meet some quota N months later. Capital One did this circa 2020, for example.
That being said, if you're willing to play the game and monitor your monthly interest rate updates, go for it.
Otherwise, if you're a normal person who likes to ignore their HYSA account, it's prudent to go with people who are offering a rate closer to 4% (e.g. Marcus by GS is currently at 3.9%).