While Apple (NASDAQ:AAPL) has not officially announced how Apple Savings is fairing, a recent report indicates that the Fintech offering is already capturing solid interest from Apple device users.
Apple launched its anticipated Apple Savings feature in partnership with Goldman Sachs (NYSE:GS) on April 17th. Apple kicked off the savings feature with an APY of 4.15% – far higher than most banks. Apple Savings does not incorporate any fees, and there are no minimums, but the account tops out at $250,000 – the highest amount insured by the Federal Deposit Insurance Corporation.
In setting up the savings feature, it takes less than one minute to activate it and transfer funds held in Apple Cash – far more convenient than queuing up at a traditional bank. The one thing you must have is an Apple Card – Apple’s popular credit card, once again offered in partnership with Goldman Sachs.
A report from Forbes today cites “two sources familiar with the matter” as providing some perspective on Apple Savings. According to the report, Apple Savings received almost $400 million on day one alone. And in the first four days, neared one billion dollars ($990 million). As this was last month, the total held in Apple Savings is certainly far higher. While this is still pretty small when you compare it to, say, Citi with $1.336 trillion in deposits, it’s off to a solid start.
While some banks have experienced deposit flight to quality banks – IE SIBs or systemically important banks like JP Morgan, most of these banks offer a paltry return on their money – the trade-off being security. Many savers have gone down an alternative path and moved money to mutual funds, CDs, and other competing offers – like Apple, which now offers a competitive savings product.
While none of this should come as a surprise to anyone, Apple’s entry into Fintech is just starting. The recent buy now pay later option will soon be joined by an Apple loan product for longer-term credit. As Apple has unique insight into its customers’ activities, its loan underwriting ability should be pretty robust from day one.
The next piece in the puzzle could be Apple Investments. As the world’s largest tech firm has NOT mentioned this yet – it does make a lot of sense. Consumers want to use fewer services, not more, and the iPhone and Apple ecosystem has become the hub of everyone’s tech existence, so making it a hub of your financial existence is not that big of a leap.
Apple reports quarterly results this Thursday after the bell, so we may know more later this week.