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Comment by websap | Hacker News Reader

How is it that the rate offered GS & Apple, is greater than GS's own banking product Marcus?

WTF is going on?

Marcus has a 10mth no-penalty CD promo right now at 5.05APY. So, it's not like there's no precedent for doing promo rates like this. This is just a promo.

Where do you see that? I'm seeing 5.05 for penalty cds.

https://www.marcus.com/us/en/savings/no-penalty-cds

Best no penalty cd I've found is 4.80 @ CIT bank, which is funny enough...ex SVB.

https://www.cit.com/cit-bank/bank/cds/no-penalty-cd

teaser rate to get people to move from other banks, probably won't last

.. guaranteed for 12 consecutive months.

no the rates can change at any time

It's 0.25% higher than the rate they pay for Marcus. I've been a Marcus customer for a few years, and the rates consistently go up (and down) after the Feds change their rates.

Why is the Apple rate higher than the Marcus rate? It could be a higher intro rate, but there's no indication that that's the case. My guess is that they can afford to give an extra 0.25% because they don't need to spend any money on customer acquisition/marketing costs.

Marcus and Betterment often go back and forth on who provides the higher rate. Right now Betterment is 4.2%, so the rate that Apple/GS is providing isn't outrageously high, it's potentially a real rate that can be sustained. It's only outrageously high compared to the 0.01% that many big banks offer.

The higher rate is a customer acquisition cost. But perhaps you can say Apple is contributing to the expense whereas for Marcus they don't.

Also, and I'd guess this a key thing, is that if you're using an Apple credit card, your cash-bask rebates are auto-deposited into the Apple Savings account. Since GS is the issuer is the card, they're keeping that money instead of paying it out to you.

It's still cheap for Apple to do that instead of raise a bunch debt to finance their buybacks

The delta is added to the CAC calculation. Probably it is for a limited time in the fine print.

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