Apple Card Daily Cash can be shunted to high-yield savings soon

AppleInsider

Apple has announced that Apple Card users will shortly be able to transfer their Daily Cash balance into a special interest-accumulating Goldman Sachs savings account.

Source: Apple

Referred to as just Savings, the new account is to be a high-yield Goldman Sachs one, with no fees and no requirements such as minimum balances, or deposits.

"Savings enables Apple Card users to grow their Daily Cash rewards over time, while also saving for the future," Jennifer Bailey, Apple's vice president of Apple Pay and Apple Wallet, said in a statement. "Savings delivers even more value to users' favorite Apple Card benefit -- Daily Cash -- while offering another easy-to-use tool designed to help users lead healthier financial lives."

Apple does not define exactly what high-yield means in financial terms, but currently Goldman Sachs savings accounts are at about 2%. Apple does say that that the new Savings account will not be limited to Daily Cash. Users will be able to deposit additional funds, or transfer the balance to a linked bank account.

The company also does not specify a date for when this Savings account starts. Instead, it commits only to "in the coming months."

Apple Card's Daily Cash feature sees the card owner given a small percentage back on practically every purchase. The 1%, 2% or more that they get and then be automatically credited to their account or, previously, held in a separate Daily Cash account.

From whenever Apple introduces this new feature, the old Daily Cash account will remain, but Apple Card users will now be able to get a, presumably, better rate through the new Savings account.

In use, once a user has elected to take advantage of the new Savings account, they will see no difference in how Daily Cash works. As they make a purchase, they get their 2% or so cash back -- at times vendors offer up to 4% -- as before.

Similarly, it appears they will continue to be able to immediately see their Savings balance within the Apple Wallet app, where they used to see the Daily Cash running total.

Read on AppleInsider

jas99

Very nice. 

Madbum

Wow nice nice!

rob53

When I was a kid, we got 5% interest on savings accounts. That was when banks actually served people instead of their CEOs and the stock market. 2% is nothing except when you compare it to the 0.01% most banks give you.

Appleish

rob53 said:

When I was a kid, we got 5% interest on savings accounts. That was when banks actually served people instead of their CEOs and the stock market. 2% is nothing except when you compare it to the 0.01% most banks give you.

Yep. Banks consolidated, bought up local banks, and now their only real customers are the cream of the 1%.

iOS_Guy80

Currently the only way to add funds to your Apple Cash card is through a debit card. I wonder once this new savings account is set up and you transfer money to it from your Apple Cash card, will you be able transfer funds back to the cash card from this new savings account in order to make purchases and/or send money to someone? Currently, I transfer my cash card balance to a checking account then then in turn into a high yielding savings account.

Anilu_777

Still not in Canada. 

polymnia

rob53 said:

When I was a kid, we got 5% interest on savings accounts. That was when banks actually served people instead of their CEOs and the stock market. 2% is nothing except when you compare it to the 0.01% most banks give you.

And your parents paid 12% on the mortgage. interest cuts both ways. If you are a borrower, low is good. A saver? High is good. 

larryjw

Giving higher interest rates on cash will put pressure on regular banks to up their interest rates on checking and savings accounts, especially if users can transfer money into the Apple Cash account.

My cash account only is increased when I make Apple Credit Card purchases. I don't collect money in the Apple Cash account and never thought of doing that. I routinely spend the cash account down buying coffee or some other fast food. 

This apple offering is unlikely to change my spending habits. 

davidw

rob53 said:

When I was a kid, we got 5% interest on savings accounts. That was when banks actually served people instead of their CEOs and the stock market. 2% is nothing except when you compare it to the 0.01% most banks give you.

As mentioned, that 5% you got for the money in your bank account was the bank paying you a part of the 10%-12% they got for lending your money to a borrower (back then). You can't expect any where near 5% interest, when banks has been lending out money for much less than 5% for the past 20 years or about 5% now. 

If you don't need the money any time soon, you can lock it up in a bank CD and get maybe about  5% or more.  I remember CD's were paying over 10% interest.

I remember getting 5% interest on a checking account and it was free checking that included the checks. But now of days, it cost you in term of less interest, to have your money ready available 24/7. Whether by checks, debit card, ATM, online on a computer/mobile device and not to mention being able to visit a nearby brick and mortar. Those services are not free for the banks to provide and eats into the interest they pay account holders. Even if the account holders only take advantage of some of it or none of it.

That said, I get a "whopping" .4% interest on the non invested cash I have in my Charles Schwab account. It's where nearly all my savings are. Either in cash or stocks. (Even at .4%, it's 40x more than what my bank would pay me in interest on that cash.) Schwab offers a CD that pays about 5%, if i want to lock up some of my cash. But I rather have my cash readily available to buy stocks or transfer to my bank checking account if needed. And this cost me in terms of less interest on my cash (along with other amenities that I don't use.). I only have a free checking account at my bank. And only keep enough funds in it to survive a month or two. It only takes one business day to transfer money into it, if I need to.   

cia

2% interest for money in a savings account, while inflation rips along at 7-10%.  You're losing money using this.

davidw

Appleish said:

rob53 said:

When I was a kid, we got 5% interest on savings accounts. That was when banks actually served people instead of their CEOs and the stock market. 2% is nothing except when you compare it to the 0.01% most banks give you.

Yep. Banks consolidated, bought up local banks, and now their only real customers are the cream of the 1%.

I doubt that the "cream of the 1%" have any significant amount of their wealth in a bank account drawing interest. Or need to borrow money from a bank and pay interest.

Banks main customers are still people that need a loan to buy a home, car, start a business, send a kid to college, remodel a bath or kitchen, consolidate and pay off CC debts, pay medical bills, etc..   

MplsP

cia said:

2% interest for money in a savings account, while inflation rips along at 7-10%.  You're losing money using this.

As opposed to just letting it sit in your apple cash account or using it on another latte? Savings accounts are not intended to be primary investment vehicles. You can get higher interest rates in other places but you also don't have liquidity. An account like this serves to reduce the cost liquidity.

Personally I think this is a great idea. I would essentially be like the 'round up' programs some banks have on their credit cards. Savings rates are pathetic in the U.S. We need more programs like this to encourage more savings.

Stabitha_Christie

cia said:

2% interest for money in a savings account, while inflation rips along at 7-10%.  You're losing money using this.

Huh. It’s hard to pinpoint what you don’t understand in this situation. Is it the inflation number? Inflation in general? Or the product described in the article?