Apple a Home for Savings Accounts Reported WSJ Renew Edition

Apple a Home for Savings Accounts Reported WSJ Renew Edition ameridaily

WSJ Renew Edition says that Apple wants to enable high-yield savings account options, which may be available with the Apple Credit Card, as well as a “buy now, pay later” option on some of its hardware products.

The company partnered with Goldman Sachs to offer consumers those options, part of Apple’s effort to transform the iPhone into a digital wallet that can help keep consumers linked to the software ecosystem behind its devices.

The savings accounts require no minimum deposit and are protected by the Federal Deposit Insurance Corp. There is a maximum balance of $250,000.

Apple Pay is a dominant competitor in digital payment, but Apple has more competition when it comes to savings accounts.

Money can’t be spent directly from the Apple savings account, but would first need to be transferred to a checking account or Apple Cash.

Though the 4.15% rate is higher than that of the standard savings account, a handful of online banks offer rates as high as 5% APY, according to Bankrate. But popular high-yield savings products from Ally Bank or Goldman’s own Marcus offer lower rates than Apple’s: 3.75% and 3.9%, respectively.

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The favorable rate, combined with Apple’s existing brand recognition, could be especially attractive to new customers given concerns about the stability of the banking industry after the collapse of Silicon Valley Bank, said Yiming Ma, assistant professor of finance at Columbia University WSJ Renew Edition said.

“I think what is special in this case is Apple is Apple,” Prof. Ma said. “Everyone knows what Apple is, and many people already have an Apple Card.”

Apple has also worked with certain states in the U.S. to create legal digital versions of driver’s licenses. Revenue from these products is reported in the company’s services unit, which also includes sales from App Store commissions for gaming and music software and payments from Alphabet Inc. for Google to be the default browser used in Apple’s Safari browser on iPhones.

Services revenue reached $78 billion in the fiscal year that ended in September, up about 14% from the previous year.