It's interesting that they will not accept any transfer-in, even reject a transfer, if the balance exceeds $250,000. This must be because of the FDIC insurance limit, and hence protects the consumer's savings. Quite the opposite of what some banks are trying to do: offer accounts that try to provide FDIC insurance over 250k by spreading your money among other banks.
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.
At what point does an investment with Apple actually become just as safe if not safer than the FDIC? Neither is realistically going to fail, but with the debt ceiling once again rearing it’s head, I have more trust in the leadership of Apple not doing something stupid than I do in the US government not doing something stupid. Governmental incompetency and dysfunction seems like a bigger risk than insolvency of Apple.
Apple has approximately $50B in cash on hand. The US government can print a trillion+ on a whim. So if there's a banking crisis I'm going to trust the FDIC to bail me out over Tim Cook (and there's a pretty strong recent precedent of exactly that).
>The US government can print a trillion+ on a whim.
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?
> 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.
>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?
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.
> This sounds like the type of situation where money becomes worthless. 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.
Don't buy Apple Stock instead of keeping some cash in a bank account.
* 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.
Apple would suffer during a default just like the rest of us. Intimidating the majority of voters and businesses is THE point of the debt ceiling stunt.
That is assuming that the only reason the government wouldn't pay out FDIC insurance is collapse of the dollar (or that refusal to pay would cause the collapse of the dollar). I don't think that is the case. I would put the odds of the US government doing something stupid much higher than the collapse of either the dollar or Apple.
They're making money on the difference between their interest rate and EFFR. Therefore, no, they aren't rejecting money for that reason because they're profiting from every dollar saved through this; it isn't a charity.
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.
So far each new Apple financial product makes me research and re-evaluate my options. When they announced their credit card, I got into "cash back" (thankful that I did), and ended up always getting good percentages back on every purchase. Apple Card was a jumping off point for further research. (For those curious, I ended up with Bank of America Premium Rewards at Platinum Honors tier + Amazon 5% card, Target 5% card, Lowe's 5% card, Apple 3% card, etc).
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.
I'm still very happy with Ally for general banking - still prefer their app over others that I have seen. For Savings they are still very good but also have a "No Penalty CD" thats at 4.25% APR and their "High Yield CD" is at 4.8% for 18 months
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.
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....
I recently decided to move our cash into money market funds and built https://moneymarket.fun/ to help find the highest yielding ones. Right now WMPXX is 4.9% on WellsTrade with no minimum investment. Several other options all > 4.8% as well on various other brokerages.
Fidelity and Vanguard have "core" positions (all money goes into these) that are yielding 4.4-4.7%. They're money market funds so are covered by SIPC insurance. If you're looking to open up something for your kid, might as well just open one up for yourself as well.
They're money market funds so are covered by SIPC insurance.
If I understand your post correctly, this is not like FDIC insurance. Money market funds can always lose money and are not SPIC insured like FDIC insurance. (Please correct me if wrong.) What does it mean to "lose money" in money market funds? Most money market funds are buying very short-dated debt (about 90 days or less) -- like commercial paper [CP] (very popular before 2008) or US Treasury bills. For CP, these are not principal guaranteed, like US Treasuries (please ignore the Tora-Bora cave dwelling DeFi crowd that worries about the US Federal gov't going bankrupt -- I expect there will be a few replies to this post!). As a result, it is possible for the CP issuer to go bankrupt and be unable to repay the principle borrowed.
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.
To be clear, money market funds are not cash. They are consider securities under US securities laws. You will be covered up to 500K USD. In my personal opinion, they are about 95-98% as safe as US Treasuries -- usually a very good investment.
Theoretically MM's can break the buck, there's only been like three cases ever, no one actually lost money, and even then worst case scenario they were only ~3% losses. That's why I mentioned SIPC insurance, the only real threat is the broker going under.
I personally fully expect Ally to continue being competitive as they have a history of matching rates competitively.
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.
Apple's cash back is OK. If you want to play and win the points game, Amex Gold for dining/groceries and Amex Green for all travel expenses can net you some nice travel options in the future. Getting 100,000 points (the rough equivalent of $1000 cash back) can get you some nice business class seats over the oceans to EU and Asia that can be worth 5-10x the cash value of the points.
I think this is important to emphasize. The Apple Card is the only credit card available in the US that comes with an explicit commitment not to sell you PII or transaction data.
I feel somewhat confused; my current Wells Fargo saving account APY is 0.01% where did I go wrong? Seems like I might be shifting my money to a new home.
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!
Cannot stress enough how much you should run, not walk, from Wells Fargo. When I was foolish enough to seek a mortgage with them, they instructed me to sign documents stating that a) my partner was my spouse (and doubled-down on that when I highlighted the error), and b) a loan from my uncle to provide necessary "buffer funds" was in fact a gift that would not be repaid (it wasn't, and they knew that). Any bank that knowingly instructs a client to sign a single fraudulent document should be viewed with caution; twice is unconscionable.
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! :)
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!
In general I would avoid Wells Fargo since they made up fake accounts for customers to charge them more money, got fined a billion dollars for it, and then did it again while they were still on probabtion from the first time.
I just took a double-look at the Betterment high-yield savings account they'd offered to me previously (I already have an account there for investments), which I'd dismissed because it seemed convenient to keep my savings and checking in the same place (Chase), and it's 4.2%! I've been getting 0.01% at Chase!
Needless to say I'm going to be trying it out! Thanks Apple!
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?
> 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
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.
In their terms it sounded like if they close your account for whatever reason, you can still go directly to the banks and recover your funds. They did say the funds would be temporarily uninsured at certain points while in transit (deposit/withdrawal, redistribution, etc) but that seems like a relatively small risk
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.
> 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.
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?
Honestly savings account interest rate doesn't matter. If you're keeping a significant amount in there that you don't need to spend in the next 90 days, you're probably doing something wrong and should invest it in I bonds or something like Betterment Safety Net.
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.
The big banks are offering 0% on deposits while raking massive profits. They can do that because they’re too big to fail, so people put their money there anyway so it will be safe. They get enough deposits, so no need to offer better rates to attract more.
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.
The larger banks simply can't offer high interest rates due to the amount of their deposits. For example, JP Morgan Chase has yearly net income of ~$50 billion. The size of their interest bearing deposits is 1.6 trillion. So every 1% rise in savings account rates costs them $16 billion a year.
Yes they do. Do you think a company is going to set themselves for a best case scenario of breaking even? Or just take a 25% hit to profit unless they absolutely need to?
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.
I don't think I articulated myself well, I wasn't taking a judgement. There is no logical inference that a company needs (or deserves) the profit margin it had last year, for example, that's just a fact of business.
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.
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 definitely agree with un-bundling for the best services over all. The problem with credit unions are most are regional (though some are not). I have the best CU in my area which is fine, but it doesn't have a competitive credit card offering or savings rate. It does have good service and some good other benefits and I use it for my main checking account.
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.
> The problem with credit unions are most are regional
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.
Bank accounts are one of the lowest "customer churn" services out there. People typically open a bank account and use it for years and years (which turns into decades on decades).
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)
And everyone hates messing with payroll, even if your employer has a good system it's an opening for problems.
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.
One click setup isn't going to do it. If Apple is providing banking-type services, they're going to need to have support available at the Apple Store. If they don't, banks will beat them every time. Customer support for noney is not something that can be left to a chat window.
Having trouble squaring that with Wise, Revolut, Monzo, Starling, etc. I also don’t think I’ve ever visited Barclays — where I have my primary UK current account — in person ever, other than setting up the account ~10 years ago
Monzo is the only one in the list that has a banking license, i.e. legal right to take deposits and make loans. Not everyone is a digital native, even today. So when it comes to money matters, there will be a time when interacting with a virtual assistant is not going to do.
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.
My bank, Capital One, is a glorified cafe and co-working space. If I try to do any "banking" there they will literally redirect me to use the app. You can definitely do banking completely online. You simply need to have the systems and employees in place to maintain or exceed expectations.
I stopped using BoA because the in branch experience has declined. I never used Wells Fargo for obvious reasons.
I have been getting >4% for most of this year on high yield savings accounts and also 1 month CDs. They are all zero risk(FDIC insured) and money generated from them could pay for my portion(half) of the mortgage on my house(if I lost my job). I would look for bankrate and they list which accounts are paying the highest APR, if you have a brokerage like schwab etc you can look at 1-3 month or even longer term CD's which have rates close to 5%.
You can't do it from the app, its only on the WEB UI. from there click "Trade" and it will be one of the options to select(in the middle column). Hope that helps.
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.
I recommend Ally. Very good customer service (on rare occasions I called immediate pickup or just a few minutes). Their banking app is good (used to be simper/better in the past imho) and they are known for competitive interest rates (Savings is at 3.75% right now)
Used to be a decent source until they started letting ads take over their content. In your link you have to get past the "Featured" section and "Offers from banks you may use" section to see the actual content. Many times I've needed an extra click to get past the ads, or been completely unable to.
Yeah, obnoxious huh? My main bank is always suggest I open a savings account with them. “Check out our new awesome rate!”
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.
Many banks have high-yield savings accounts, but I think they use them to attract customers, so they don't automatically put you in them if you don't ask. That said, I just looked up wells fargo and I don't see any.
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
What I, and probably many of us want, is a way to keep just enough cash in a checking account at a too big to fail bank while the rest is earning yield at Betterment, Wealthfront, other 4% or more APR locations, automatically topping off the checking account as needed.
Either because banks don't lend out consumer money, or they do and don't pay the interest back to their savings account customers, tons of regular consumer banks and CUs offer 0.01% on savings accounts they bundle with checking.
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
> I’m moving a bunch of cash over once I set it up
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.
Can just put money in SGOV for a minimal fee (0.05%) which invests in T-Bills for you. Slightly lower yield due to timing issues, but close enough and no micromanaging individual treasuries.
Nobody should be moving money around different savings accounts for yield... use products designed to make it easy.
bond funds have principal risk. If you buy an individual bond and hold the duration, you don't care about rate changes, you just sell and don't buy again.
This fund owns 3 month or less T-Bills. There's zero credit risk and effectively zero duration risk. It's an automated Bond ladder of US T-Bills. Though you can save 0.05% in management fees by laddering them yourself
I just buy shares of VUSXX from Vanguard. Currently 4.63%. But really, if you have money to invest, you should have a real stock and bond portfolio that's going to beat any savings account.
It comes down to time frame. If you need the money in a short time frame, stocks/bonds are not going to have a high confidence interval in having the same or more value at the time you need it. So, say, saving for a car 3-5 years from now, probably better off putting it in high-yield savings.
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.
yep - just pop over to fidelity/schwab/etc. and you can buy treasuries, you can also buy directly with treasury direct (but its pretty clunky), you just need to do a little management (e.g. buy treasuries, reinvest when they mature)
TreasuryDirect's website is pretty horrible, but for what it's worth they actually have the option for automatic reinvestment of T-Bills built in. You can even set the number of reinvestments you want to do, or just have it automatically re-deposit into your bank account when the T-Bill is mature.
US treasuries are marketable securities. The 1-month and 3-month ones the most liquid asset on the planet. Also US treasuries have the unique property of being explicitly 100% guaranteed by the US government so no $250K limit to worry about.
I could be wrong, but I thought you could sell T-Bills fairly easily on the secondary market. You might take a bit of a haircut, so it's obviously better to hold onto until maturity, but I think in a pinch you can get most of the money back.
Or you can be SVB and take a lot of a haircut. Putting money you "need in a pinch" in an asset where you could take a haircut to get an extra percent or two of interest is a risk. A risk you can mitigate but still a risk.
I was about to say; if the bonds were going to mature in less than three months, I doubt that the haircut would have been nearly as substantial; I don't know that it would have been enough to save them but at it wouldn't be as cartoonishly awful as it was.
Sure there's some interest rate risk to short term treasuries but the real world risk rounds pretty close to zero. Plus it lessens as it matures.
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.
Oh, no argument there; it's about risk management in my mind. How often do financial emergencies happen? How often do I need to dip into long term savings? If I do have to dip into long term savings, how much of a haircut am I willing to take?
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.
I'm getting 4.25% from Vanguard's "Cash Plus" account[0], which is also FDIC-insured (up to $1.25M). I don't use Apple Pay so can't comment on 3, but I'll happily take an extra 0.10% interest at the cost of only being able to use it as a savings account - though I do recognize that others might disagree!
This is a factual but unhelpful comment. I (and many many other people) have a need for an emergency fund that is liquid at short notice. Storing _all_ my wealth in investment vehicles (and possibly needing to liquidate it at an inopportune time) would be foolish. The devaluation due to inflation can be considered the "convenience cost" of such a fund.
(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)
It is a helpful comment because a lot of people don't think about things in the terms that I'm outlying. In the same way that people don't think about how getting paid a salary in USD is the same as buying dollars.
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.
Both gold and crypto have wildly different profiles than cash in a high interest savings account, so much so that suggesting them as a plug in alternative is at best disingenuous.
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.
Wait a second. I'm only providing examples to better the discussion and now you're calling me disingenuous. I'm not shilling anything. Nor am I saying anything isn't without risk. Putting words into my mouth isn't cool either.
I'm saying you responded to someone explicitly talking about "emergency funds" with examples presented as if they have similar profiles (to savings account) for that use, and they simply don't.
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"...
> Both gold and crypto are poor vehicles for original commenter's need.
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.
> Digital gold solves that, but in general the short term volatility makes it imprudent for emergency funds.
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.
I think you're comparing apples to oranges. Even Crypto's most ardent supporters would not disagree that prices are volatile - which means that it doesn't suit my stated requirement that there's never a bad time to liquidate the investment (if my roof springs a leak right as WhateverCoin takes a nosedive, I'm shit out of luck). I will admit that I've never invested in gold, but if you're talking buying actual literal physical gold then I can't imagine that it can be liquidated as quickly as would be necessary; and, whether you're talking about buying literal gold or an abstract investment tied to Gold, I'd be very surprised to hear that it has an appreciation rate that beats HYSAs - and hey, if it does, I'm extremely grateful to you for pointing out an alternative investment strategy to diversify with!
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.
It sounds like you missed the very end of my comment.
"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.
Fair point. I will certainly admit that, despite having made a decent (not spectacular) profit in crypto in 2021-22, the cascading high-profile failures and rug-pulls have made me lose faith in the individuals involved. The technology and concepts themselves are a different matter. I love and enthusiastically support what people _claim_ to be working towards, but an overwhelming weight of evidence suggests that the rational thing to do is to assume that any crypto project is vapourware, a scam, or some combination. Here's hoping I will be proved wrong one day, I really hope so.
As soon as you get a 'real job', you're immediately pushed on the concept that you're supposed to stuff money into a 401k and let other people manage it for you because you're too busy or this stuff is too hard and others can do a better job at it for you. Sure, that's something that you can do, or you can decide to put the time and effort into learning more about finance and control what you do with your money a bit more. The choice is yours and yes, everything has some level or risk. Even ETF's have buckets of risk/reward.
Absolutely right, and I salute the impulse to educate folks that taking financial responsibility and autonomy is something that is possible and profitable!
(While still disagreeing with you that crypto fits the requirement-profile of an emergency fund :P )
I just wish I had realized it earlier. I'd have never put any money into a 401k or the stock market. Worst performing asset class that I can imagine. Maybe some people are happy with the results they've gotten, but there is really a lot more you can do if you are willing to put the energy/time into it.
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.
Probably not anymore. Rates are up, CPI is down. 4.25% is probably close to break even now or will be very soon. Vanguard treasury money markets are paying a bit higher without FDIC backing but they are pretty risk free.
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.
One of the screenshots shows an "Add Money" button, so at first glance it seems like you can add funds. Also from the linked page:
> 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.
It is interesting that there is no direct deposit requirement for this account. Most traditional (Truist, BofA) and competitor banks (Sofi) offer incentives to encourage direct deposit for the end users. I wonder what other strategies Apple will be using to drive deposits in lieu of this.
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.
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).
Yea I don’t think “any bank” will give you 4%. Just checked CIBC and there are a number of conditions and also the bonus interest only applies for the first 4 months on your first account: https://www.cibc.com/en/special-offers/smart-savings-bonus-i...
I made a mistake, I equated Savings Account with a GIC (which is like a cashable certificate of deposit). In Canada they can both be referred to as a TFSA, or Tax-Free Savings Account.
However the GIC is not like a savings account where there are minimum balance requirements to get an advertised rate.
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!
Yeah was curious about this too. From the article:
> 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%.
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.
I'm surprised that Apple Card (credit and savings) aren't available outside the US yet.
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?
Starting with the US makes sense, but 2 years later not having launched elsewhere and launching a new US-only product, that feels like longer than I expected.
Not too many options that are high spending countries with plenty of iPhones but also a regulation wild west and people willing to pile on hundreds of thousands in high APY debt like the US
a true sweet spot
Less than half of French people even have a single credit card
> 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")
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.
> people willing to pile on hundreds of thousands in high APY debt like the US
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 would think it will vary greatly by location and status. I'm 34 and in a fairly low income area / states. The only people I know that aren't drowning in credit card debt are people that manage to be financially responsible enough to never get one 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.
It's not explicitly mentioned if the deposits are FDIC insured, but looks like they are reading the foot note. I would have expected Apple to make it abundantly clear given recent bank failures.
They are, it's a Goldman Sachs account branded by Apple.
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.
with a Savings account from Goldman Sachs, which offers a high-yield APY of 4.15 percent. Annual Percentage Yield (APY) is 4.15 percent as of 4/14/2023. APY may change at any time. Maximum balance limits apply.
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
I dream of the unlikely day this lands in Canada. Banking is a highly legislated oligopily here in Canada. They will lobby long and strong to prevent Apple from entering the banking sector.
WealthSimple has been advertizing an account with 3% interest, and up to 4% if you have more than 100K invested with them: https://www.wealthsimple.com/en-ca/spend
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.
I'm looking for a HYS account that also has meaningful 2-factor (ie, not SMS) authentication. Does anyone know a bank that has > 4% APY where they allow an authenticator?
Wealthfront offers real 2FA (TOTP) and their Cash account pays 4.3%. Don't think there is direct Yubikey support yet.
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.
Wealthfront requires me to authenticate with my existing bank (ie, entering existing creds into wealthfront) for transferring money. Any way around that? That's kind of a no-go for me.
Hmm, I don't remember my setup exactly, but I thought there was a way to manually add a new account for withdrawal, of course, you'd be entering account number, which is sort of like a password. But I'm sure they have to handle transfers from old-school banks that don't have all these fintech connections, perhaps their support could help, I'm not totally sure sorry!
Amusingly I got it to accept the ABA routing but then they recognize the ABA and force me to login.
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.
It's interesting that both Marcus and Apple's HYSA are operated by Goldman Sachs, but Apple's gets a higher interest rate.
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'm in the process of moving my Discover HYSA balance to this. Going to take a few days for them to do verification transactions, but I've moved some of my savings from my normal savings over since why not.
Its interesting to see, Goldman sachs equivalent product marcus is only offering 3.9% at the time of writing this. But with apple card, they are offering a much higher rate of 4.15%. I guess, the later is only confined to dollar amount from CC (credit card) related purchases. Nevertheless, I wish more CC companies do this.
You can transfer money from your bank that is used to pay your CC bill (I just confirmed this with a $10 transfer, it takes "1-3 business days").
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).
Canada is another country with a separate banking system and has a different rate of inflation. Don't be confused just because both currencies are called "dollar".
True. Our inflation rates are not that far off though. We tend to be attached at the hip for many things, and Canada tends to follow US trends. The point being, there are savings accounts out there better than 1%, if you look for them.
Goldman Sachs, the bank Apple uses to provide banking products, does not offer consumer banking services outside the US. Banking is a very regulated industry, so does not translate well across borders. This is why having (say) a TD Bank account in Canada does not mean that you can transparently withdraw from it from a TD Bank US branch; you have to have a separate US account, and transfer the funds between.
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.
That was what originally interested me, except I’ve learned that the vast majority of places I frequent don’t allow touchless payments. I’m at Home Depot nearly daily and I really wished they allowed touchless payments.
Home Depot in my area (Seattle) has rolled out touchless/apple pay. They’re not like walmart wherein they were purposefully holding out, they’re just slow
I got hooked on Apple Card when my other Visa got suddenly suspended after I made a legit purchase abroad, and I was in a store and I had the Apple Card up and running in less than 1 minute on my iPhone. Really changed my perception of how the credit card experience should work.
I like tinking it against the table. I got one for the 3% back and financing on Apple products. Kept it for the tink tink noises and for the physical card having absolutely no info on it to steal (and a rotating CCV number)
While the point remains that Apple Card’s rewards are inferior, I find that almost everywhere except Home Depot/Walmart/Lowes/Kroger/Winco accepts Apple Pay.
Apple will be getting a piece from Goldman Sachs somewhere. Both Apple Card and Saving account are US only, nearly 4 years since they first launch Apple Card.
What's next? With Apple Watch and Health Monitoring the next step could be Apple Health Insurance? or Apple Mortgage?
Mobile developers needs advertising because, as awful as it is, it's an important business model. It's an important complement to Apple's business model, even if I think they should have stayed out and just used policy/technical means to ensure other companies aren't too sleazy.
I don't see any similar need to get into health insurance though.
I was thinking in terms of the consumer-facing experience, which was pretty slimy and definitely not one of the most straightforward nor honest-feeling experiences. I worked briefly at Radio Shack in the late 90s and part of the job was selling the first generation of digital cell phones. Our competition was phone kiosks in the mall and places like that. The whole experience was ripe for a focus on the consumer transaction as well as the consumer experience (example: visual voicemail).
> 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.
Related to that Goldman Sachs seems to be taking everything they are learning from Apple and applying it to Marcus, their growing consumer banking brand, and Marcus certainly seems low-margin targeted.
Interesting that the primary way they are advertising to fund this is vis Apple Card’s rewards eg your cash back gets deposited in this savings account. So it is encouraging you to use your Apple Card more.
Interested in this as well, because I've been doing research on this and it seems like the ones that aren't banks you've heard of that have higher yields are more prone to playing games with your account (not adjusting your APR but instead keeping you on whatever and creating new accounts for the new plans).
Yeah a lot of the high yield savings accounts feel gamified where it suddenly feels a hell of a lot less simple than "savings account". More "high yield if ... <moving target>".
Most likely never. And for the immediate future, the Fed is forcing a recession with these high rates, since the influx of cheap money caused inflation and that's the main thing people want the US Government to 'fix'.
This is far, far, far more innovative than the Apple IIe, the Macintosh, the iPod, the iPhone, and the M1 processor combined.
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.
Not intentionally, but it is. What Apple is offering is a financial ecosystem for families, particular for parents helping their kids manage money. Apple ecosystem is quickly becoming the one-stop shop for managing all things family
That's not an apples to apples comparison. It's more like people shafting themselves for not evaluating the space of money market savings accounts. You can stay with the same bank and go from a 0.01% rate to 4%+.
Disruptive? It's a bog standard savings account with Apple's terrible Wallet interface. It's convenient if you have and actually use an Apple Card I guess. I personally only use my Apple card for Apple purchases because that's the only place you actually get a good rate, and I just use other cards with better cash back on everything else.
This is below current market rates for savings accounts (edit: for online-based high-interest savings accounts). Current highest rate for a no-minimum FDIC-insured account is from UFB, which is 4.81% APY: https://www.fool.com/the-ascent/banks/the-highest-savings-ac...
Yes but then you have to use those banks, set up accounts, deal with transfers, etc. Just wait, you'll be able to buy and sell stocks and open up an IRA with Apple here within a few years at this rate.
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".
I read some reviews about how awful some of these banks are and it turned me off. People putting their money in and having it disappear. People not getting their money back out. Having a bank you can trust is worth something, even if you get slightly lower interest.
Other reputable banks like Amex or Discover are only returning 3.75% right now.
That assumes that 4.81% will remain 4.81% for the foreseeable future.
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%).
4.15% is lower than 4.81%, but how did you decided that UFB defines "current market rates?"
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.
FDIC says the national average is 0.35% for savings accounts; Bankrate survey of banks says 0.24%. Granted this included dinosaurs taking advantage of their customers, but the point is that it's weird to use the maximum to make claims about "market rate". Of major institutions that are trying to compete on rates, it seem to be 4.0% +/- 0.5%.
Even the default cash positions for many brokerages (money market funds) are now paying over 4%. Untouched cash positions in my Vanguard and Fidelity accounts are doing better than most CDs or bonds right now.
There are plenty others offering north of 4%, and north of apple's rate, that are reputable (not saying UFB isn't, but it's definitely not a household name).
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.
Very true. It irks me that Chase/WF/etc offer 0.03% or something, what am I supposed to do with that rate, other than take all my money to some other bank?
It's a legitimate bank, but the banking experience feels very third rate, and online reviews are scathing. I opened an account but chickened out from depositing anything after their account linking didn't work and no support for that.
From the footnote 1: https://www.goldmansachs.com/terms-and-conditions/Deposits-A...