Apple’s high-yield savings accounts have brought in more than $10 billion worth of deposits so far in its partnership with Goldman Sachs.
The tech giant said in an Aug. 1 press release that those deposits piled up over the three and a half months since Apple Card holders have had the option of opening them.
Most lenders have raised rates on customer deposits to prevent clients from moving their funds to other high-yield alternatives in the wake of this spring’s bank crisis, which shook the industry.
Apple and Goldman Sachs have worked together on the Apple Card since 2019.The latest announcement comes just before Apple published its its third-quarter results on Aug. 2.
Apple’s Foray Into Financial Industry Sees Potential Growth
In March, Apple launched its “buy now, pay later” (BNPL) plan in the United States, which allow users to make payments over the course of six weeks, and expanded its footprint in the financial technology sector.
The BNPL plan allows shoppers to apply for loans between $50–1,000 to make online and in-app purchases through an iPhone or iPad.“With each of the financial products we’ve introduced, we’ve sought to reinvent the category with our users’ financial health in mind. That was our goal with the launch of Apple Card four years ago, and it remained our guiding principle with the launch of Savings,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet.
Liz Martin, Goldman Sachs head of enterprise partnerships, said in the announcement that the bank was “very pleased” with the Savings account success.
“We are very pleased with the success of the Savings account as we continue to deliver seamless, valuable products to Apple Card customers, with a shared focus on creating a best-in-class customer experience that helps consumers lead healthier financial lives,” Ms. Martin said.
As the Savings accounts are technically managed by Goldman Sachs, deposit balances are covered by the Federal Deposit Insurance Corporation (FDIC).When customers pay with their Apple Card, they get cash back on all purchases.
All purchases grant by default 1 percent in cash rewards and 2 percent for all purchases made using Apple Pay, while transactions with select merchants unlock 3 percent in rewards.
Apple Card holders also have a feature that automatically directs the Daily Cash cashback rewards they earn via purchases in their accounts.About 97 percent those with the savings accounts have selected the automatic deposit option, according to Apple.
There is no limit on how much Daily Cash users can earn, and they can also increase their deposits by sending additional funds into their savings accounts through a linked bank account or from their Apple Cash balance.
However, Apple Card is still limited to iPhone users in the United States, which heavily restricts use of the Apple Savings accounts.
Goldman Sachs Has Second Thoughts
Apple’s announcement comes after a June 30 report by The Wall Street Journal alleging that Apple’s relationship with Goldman Sachs was nearing its end.It was reported that the banking giant was negotiating to get out of its Apple Card partnership, as it aims to scale back on its consumer banking business.
The investment bank was reportedly looking to have American Express or another company take over its partnership with Apple.
Goldman Sachs did not find the current terms favorable, according to The Journal, because the Apple Card lacked fees.
Other potential partners, meanwhile, are reluctant to take over from the bank.
In addition to not making enough money, the Goldman Sachs-Apple partnership has had trouble dealing with customer service issues.
Serious teething issues with the Savings account has strained the relationship between the two companies, after customers initially saw long wait times when attempting to withdraw money.
