According to polling company Gallup’s annual “Confidence in Institutions” survey, last year, prior to SVB, only 27% of Americans reported to have a “great deal or quite a lot” of confidence in their banks.
Apple Savings hits $1 billion in deposits
That number is down from its peak of 60% in 1979.
By contrast, Apple landed in the top spot for the tenth consecutive year in 2022 according to Interbrand’s annual Global Best Brands ranking. The only bank to make the top 25 was JPMorgan, ranked at 24, just ahead of YouTube.
It should therefore be of no surprise to you to read that the high-yield Apple savings account attracted as much as $990 million in deposits in the first four days of its launch.
The successful launch helped underscore Apple’s ability to further monetize its iPhone user base of more than 1 billion people. On the first day alone, Apple’s new savings account attracted nearly $400 million in deposits, according to a Forbes report, which cited two sources familiar with the matter.
With more than 240,000 high-yield savings accounts having been opened in the first four days of launch, that represents just 0.2% of Apple’s US iPhone users, based on estimates that there are about 120 million of them.
Apple launched a high-yield savings account last month as more and more consumers seek to take advantage of the high interest rate environment.
The savings account is available to Apple Card customers through its partner, Goldman Sachs, and offers a yield of 4.15% with no minimum deposits, no minimum balance requirements, and no fees.
While Apple’s starting yield of 4.15% isn’t the highest for a high-yield savings account, there is something Apple offers that few others do: convenience.
At least, convenience for iPhone users who already have an Apple Card, as the savings account integrates into the iPhone’s Wallet app.
The massive scale Apple enjoys, combined with the convenience it is able to offer its customers, is something many regional banks are likely envious of right now as the recent collapse of First Republic Bank rocks the sector and questions the overall stability of banking institutions that were once thought of as relatively safe and stable.
The new savings account is only the latest in a series of high-profile financial offerings from Apple.
Last month, the company began offering its own BNPL product giving consumers the option to split payments into four instalments with zero interest or fees.
In July, Apple launched tap-to-pay allowing merchants to accept card payments directly from their iPhones. By offering financial products like these to consumers and merchants, Apple is integrating itself into every aspect of its customers’ lives while collecting swipe fees and cross-selling its own products.
In all of its financial products, Goldman Sachs operates in the background, despite its own formidable reputation, suggesting that they are betting that customers no longer value the marble columns and venerable histories that thousands of redundant FDIC-insured financial institutions continue to bank on.
154 year old Goldman Sachs is essentially an infrastructure player not unlike Evolve and Cross River, brandless banking-as-a-service providers serving other fintechs.
“It’s partnerships like these that could basically make banking become invisible,” Chris Nichols, director of capital markets at SouthState Bank, says.
“Apple goes at warp speed and a lot of banks are driving 45 mph in the right lane,” concludes Dan Ives, analyst, Wedbush Securities.
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