Apple's Goldman Sachs-backed savings account attracts $10 BILLION in deposits in first five months -...

Apple's Goldman Sachs-backed savings account attracts $10 BILLION in deposits in first five months -...

Tech giant Apple has recently shared that its high-yielding savings account has managed to accumulate a staggering $10 billion in deposits from users within the United States. This milestone has been achieved since the account's launch in April, even in the face of various challenges encountered during the initial implementation of the service.

The savings account provides a remarkable 4.15 percent return, exceeding the average rate offered by banks in the United States by more than tenfold.

The announcement is a display of power after recent news that Goldman Sachs, who collaborated with Apple on the project, was contemplating a departure strategy from the partnership that played a significant role in establishing the iPhone maker's presence in the financial realm.

According to an article published by The Wall Street Journal in June, discussions were being held to transfer the partnership and various additional services that the bank assists in providing to American Express.

It comes after Apple faced certain challenges following the introduction of the service, as customers claimed the company was withholding their money and faced difficulty in accessing their savings.

Apple has recently revealed that their high-yield savings account has gathered a whopping $10 billion in deposits from customers in the United States. This impressive achievement comes after the account was first introduced in April.

The return on investment from Apple's savings account surpasses the average savings rate in the United States by more than tenfold, currently standing at a pitiful 0.39 percent.

According to a statement released by the company, ever since the account was introduced, a whopping 97 percent of users have opted to receive their Apple Daily Cash, which happens to be a fantastic cashback incentive, directly credited into their account.

The money-saving feature is integrated into the Wallet application found on iPhones, making it convenient for users to move funds in and out.

This feature is exclusively accessible to individuals who possess the Apple Card, and it grants them the freedom to retrieve their funds whenever they desire. This sets it apart from numerous conventional accounts that impose a restriction of only six cash withdrawals per annum for customers.

Upon its debut in April, it quickly captured significant interest because of its attractive pricing. Informants informed Forbes that approximately 240,000 accounts were established during the initial week of operation.

Two informants disclosed that the initial offering generated approximately $400 million in deposits during its inaugural day.

Savings rates have remained disappointingly meager when compared to the expense of borrowing, as indicated by information from the Federal Deposit Insurance Corp. (FDIC), showing that the average yield in the US is now merely 0.39 percent.

It is significantly lower than the current rate set by the Federal Reserve, which is now at its highest point in over twenty years following the recent increase by the central bank.

Three major American banks earned nearly $50 billion from increased interest payments last quarter, but they have not raised the returns on their savings accounts.

JPMorgan Chase and Bank of America provide an abysmal 0.01 percent return on their regular savings account, whereas Wells Fargo offers a marginally improved yield of 0.15 percent.

Three of the largest banks in America earned almost $50 billion from increased interest payments in the last quarter. However, our analysis at reveals that none of these banks have increased the interest rates on their savings accounts.

This implies that an individual who has an Apple account and saves money can earn 400 times higher interest compared to a customer of Bank of America, for instance.

As an illustration, let's say a client deposits $1,000 in a savings account at Bank of America. In this particular case, their gains from interest over a year's time would only amount to $0.10.

Nevertheless, by having an Apple account, they could earn a total of $41.50 from their savings.

However, the technology behemoth has faced some obstacles in launching the savings account.

The tech giant faced a situation where its customers claimed that their money was being held 'captive', compelling the company to discreetly reimburse them with $100 last month.

The introduction of the account was overshadowed by conflict when depositors expressed their dissatisfaction with being unable to reach their funds or conduct money transfers between accounts.

Nathan Thacker, a thrifty individual residing near Atlanta, shared with the Wall Street Journal in the month of June that he had been attempting to move $1,700 from his Apple account to JPMorgan Chase but had been unsuccessful since the 15th of May.

Whenever he reached out to Goldman Sachs' customer support team, he was advised to be patient for a couple of days. The funds were solely received after the outlet stepped in.

Social networking sites were also filled with comparable narratives of individuals unable to access their funds.

Kevin Smyth, hailing from Minnesota, sent a tweet to Tim Cook, the CEO of Apple, and inquired: 'Did you intend to collaborate with a financial institution that keeps people's hard-earned money as a captive?'

Yet another Twitter user stated: 'Avoid setting up direct deposit with Apple through a savings account.'

Based on my personal encounter, it is unlikely that you will receive that money for a period of 3-4 weeks. Allow them to keep the small amounts of money and nothing more substantial than that.

During that period, Goldman Sachs stated that only a 'restricted' group of clients were experiencing challenges. They further explained that the delays were frequently caused by strict protocols put in place to safeguard the users.

A representative stated, "The feedback from customers regarding the newly introduced Savings account for Apple Card users has been extremely positive and has surpassed what we were anticipating."

Although most customers do not encounter any delays when transferring their funds, there are a few situations where users might experience a hold-up in the transfer process. This delay is necessary as a precautionary measure aimed at safeguarding their accounts.

The spokesperson also mentioned: 'We have a strong commitment to ensuring the safety of our customers' funds and strive to strike a harmonious combination of providing a smooth customer journey while safeguarding their deposits.'

A message sent to clients and shared on the MacRumors website conveys that the service we delivered when fulfilling your request to withdraw funds from your savings account in the month of May fell short of our usual quality standards.

We appreciate your understanding as we conducted internal evaluations. As a gesture of goodwill, we have decided to provide a special credit of $100 to your Savings account as a token of our apology for the inconvenience caused.

Apple discreetly provided a $100 'goodwill payment' to certain individuals who held savings accounts with them, as evidenced by emails shared on internet discussion boards.

Both Apple and Goldman Sachs did not reply to the requests for comment from at that moment.

In the meantime, merely a week ago, there were reports indicating that the credit card collaboration between Apple and Goldman Sachs turned down Apple's CEO Tim Cook. The reason behind this rejection was a mistaken assumption that Cook posed a high risk of engaging in fraudulent activities.

In the most recent update, though, top officials from both Apple and Goldman Sachs presented a more optimistic outlook.

Jennifer Bailey, the vice president of Apple Pay and Apple Wallet, expressed her excitement about the positive response from both new and returning customers to Savings. She highlighted that Savings offers a convenient method for users to save money regularly, with no charges, no obligatory initial deposits, and no mandatory minimum balances.

Liz Martin, the head of Enterprise Partnerships at Goldman Sachs, expressed her delight at the achievements of the Savings account. As we persistently bring forth flawless and advantageous offerings to Apple Card customers, our mutual objective remains centered on delivering an unrivaled customer experience that aids individuals in achieving more financially stable lives.

Read more
Similar news