Apple rolls out savings account with Goldman Sachs offering 4.15% interest rate

The rate is more than 10 times the national average, as banks continue to offer customers low savings yields

Last month, Apple 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. Bloomberg

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.