Apple Card users in the US can now open a savings account with investment bank Goldman Sachs that offers an annual interest rate of 4.15 per cent, in a move aimed at increasing the tech company's presence in the finance space as banks continue to offer customers low savings yields despite consecutive base rate increases by the US Federal Reserve.
The rate of 4.15 per cent is more than 10 times the national average, Apple said on Monday. The US national average annual percentage yield (APY) on savings accounts is currently 0.35 per cent, according to the Federal Deposit Insurance Corporation.
The new savings account comes with no fees, no minimum deposits or balance requirements, and users can manage it directly from the Apple Card in Wallet, Apple said on Monday. However, there is a maximum balance limit of $250,000.
Watch: US Federal Reserve raises interest rates a quarter-point amid banking turmoil
“Savings helps our users to get even more value out of their favourite Apple Card benefit — ‘daily cash’ — while providing them with an easy way to save money every day,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet.
Globally, consumers are increasingly switching to cash accounts with competitive interest rates or high-yield savings accounts as a majority of banks continue to offer customers low savings yields.
While the cost of borrowing has risen in line with central bank base rate increases, banks have been slower to pass on the benefits to savers.
In February, UAE wealth management platform Sarwa unveiled a cash account with a 3 per cent annual interest rate.
Digital wealth manager StashAway also raised the rate of return on its cash management portfolio to 4 per cent, while Saxo Bank is offering a rate of 4.06 per cent that allows customers to earn interest income on their uninvested cash with no lock-in period or upper limit on the amount paid.
Apple card users can opt to increase their “daily cash” rewards with a savings account from Goldman Sachs.
When customers pay with their Apple Card, they get cash back, ranging from 1 per cent to 3 per cent on all purchases.
The cash rewards can be transferred to a regular bank account or used to make bill payments and send money to friends and family members.
Apple Card users can also deposit their cash rewards to the new 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,” the company said.
Last month, Apple also introduced a Pay Later programme in the US that will allow users to split their purchases into four payments over six weeks with no interest or fees. It allows users to apply for loans ranging from $50 to $1,000.
The service will be offered by Apple Financing, a new subsidiary of Apple that is responsible for credit assessment and lending.
It will report Apple Pay Later loans to the US credit bureaus later this year, so they are reflected in users’ overall financial profiles.
The Apple Card credit card is backed by Goldman Sachs for lending and credit assessment.
As part of its new service, users can access a savings dashboard in Wallet, where they can track their account balance and interest earned over time.
Funds can be withdrawn at any time through the dashboard by transferring them to a linked bank account with no additional fees, Apple said.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
BOSH!'s pantry essentials
Nutritional yeast
This is Firth's pick and an ingredient he says, "gives you an instant cheesy flavour". He advises making your own cream cheese with it or simply using it to whip up a mac and cheese or wholesome lasagne. It's available in organic and specialist grocery stores across the UAE.
Seeds
"We've got a big jar of mixed seeds in our kitchen," Theasby explains. "That's what you use to make a bolognese or pie or salad: just grab a handful of seeds and sprinkle them over the top. It's a really good way to make sure you're getting your omegas."
Umami flavours
"I could say soya sauce, but I'll say all umami-makers and have them in the same batch," says Firth. He suggests having items such as Marmite, balsamic vinegar and other general, dark, umami-tasting products in your cupboard "to make your bolognese a little bit more 'umptious'".
Onions and garlic
"If you've got them, you can cook basically anything from that base," says Theasby. "These ingredients are so prevalent in every world cuisine and if you've got them in your cupboard, then you know you've got the foundation of a really nice meal."
Your grain of choice
Whether rice, quinoa, pasta or buckwheat, Firth advises always having a stock of your favourite grains in the cupboard. "That you, you have an instant meal and all you have to do is just chuck a bit of veg in."
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The biog
Hobby: Playing piano and drawing patterns
Best book: Awaken the Giant Within by Tony Robbins
Food of choice: Sushi
Favourite colour: Orange
