Just four days after the launch of the Goldman-Sachs-backed Apple Savings account, users collectively deposited nearly $1 billion, according to two sources familiar with the subject.
On launch day, the savings account received close to $400 million in deposits. With banks currently offering an annual interest rate of less than half of a percent, the biggest drivers that facilitated the surge of account openings can be attributed to its 4.25% annual interest rate and the virtual ubiquity of the iPhone.
Banks Are Falling Short on Savings Accounts
With the Fed preparing to increase interest rates once again, banks have taken a more reactionary approach:
Richard Crone, CEO and founder of payments firm Crone Consulting, told Forbes:
“Banks have quickly responded to the Fed’s interest rate hikes with higher mortgage and car loan rates, but savers have seen little to no increase in traditional bank deposits or savings accounts. There’s an outflow to CDs, money market funds, and fintechs like Apple.”