Apple’s latest move into financial services is generating a lot of attention. Last month, Apple
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launched its new Apple Card savings account. It offers an attractive interest rate and allows users to move seamlessly between the savings account and credit card while using their iPhone. But is it the right option for consumers?
The savings account, launched in partnership with Goldman Sachs
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currently offers an annual percentage yield of 4.15% — an attractive interest rate by industry standards — and has no fees and no minimum balance requirement. At the moment, it is only available to people who hold an Apple Card, the company’s credit card. The Apple Card and savings account join the tech company’s other financial product, Apple Pay, which got off to a slow start but found its footing during the pandemic as consumers embraced contactless payments and as more businesses moved to accept the payment option. Variable interest rates for the Apple Card range from 15.74% to 26.74% based on creditworthiness, Apple said. That’s broadly in line with the average credit-card interest rate, which is now at 23.84%, the highest since LendingTree began tracking rates monthly in 2019. Citing the attractive interest rate for its savings account and users’ ability to access the account easily using an iPhone, some banking-industry analysts have said that the Apple savings account could be bad news for traditional banks. But will it be good news or bad news for consumers?Apple wants to attract younger customers The Apple Card savings accounts will likely appeal to a younger demographic — that is, people who already use their iPhones for payments and are familiar and comfortable with conducting their banking via their smartphone, said Jesse Whitsit, a financial adviser with Morgan Stanley. The savings account could also be a good way to save toward short-term goals, like a three- to six-month emergency fund or a down payment on a car or or even a home, Whitsit added. While not everyone is comfortable with the idea of handing Apple their financial information, said Ira Rheingold, executive director of the National Association of Consumer Advocates, Generation Z and millennials …
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