Apple's Finance Products Grow with Savings Account
Apple's Finance Products Grow with Savings Account
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Apple's Finance Products Grow with Savings Account

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Speaker 1: You need to be paying attention to Apple's new savings account because Apple is out here looking like it's doing banking better than actual brick and mortar banks. Apple's latest shakeup is in the financial services world. Apple credit card owners in the US can now put their money in a savings account with an attractive 4.15% a P Y. That means putting money into Apple savings account can earn about 10 times more interest than average savings accounts and customers can withdraw the money at any time [00:00:30] with no minimum balance or minimum deposit, no fees. The timing of this is wild. Everyone is worried about where to put their money, worried about rising costs and interest rates. People are worried about trusting banks. We just saw the collapse of Silicon Valley Bank and then Signature Bank in New York and then Credit Suisse was taken over by ubs. People right now are getting less for their dollar. Speaker 1: Folks are rightfully frustrated. So it's very interesting to watch what is happening here with Apple to see the company swoop in with a savings account that pays [00:01:00] customers higher interest than most other accounts, and it's all managed on the iPhone. Just three weeks prior, apple also got into lending with a buying out pay later service inside the Apple Wallet. So as we watch Apple make a bigger play to get deeper into your wallet and make its credit cards, sit at the top slot. We should take a step back here and look at the bigger question. Is Apple becoming a big threat to big banks? It sure seems that way. I'm Bridget Carey, and this is one more thing. Speaker 2: We've [00:01:30] created an entirely new payment process and we call it Apple Pay. Speaker 1: Apple has given us a few years to get used to the idea of Apple handling finances. We have slowly seen the creation of a world where you may not care about what big bank you use because it all just gets managed in your phone's. Apple Wallet, this all start at small in 2014. With Apple Pay, you can store credit cards on a digital wallet and use it to [00:02:00] pay online or tap to pay with N F C readers. That's no big deal, right? Google Wallet was already a thing by then, but here's where Apple started to take small bites into banks. Apple charges a transaction fee. Two banks, every time you use a card on Apple Pay, it's a fraction of a percentage, but it adds up and more and more people have been adopting Apple Pay over the years. A lot of retailers didn't always take Apple Pay in the beginning. Speaker 1: The pharmacy CVS didn't accept Apple Pay at first, but now [00:02:30] it does the grocery chain. Kroger tried to do its own thing called Kroger Pay, but after years of holding out some stores started accepting Apple Pay this week. There are still places that will not take it. Walmart in the US won't accept Apple Pay. It's trying to make Walmart pay a thing. Some banks tried to do their own tap to pay wallets. JP Morgan Chase shut down. Chase Pay last year. Capital One also pulled plans for its own wallet. That's according to reporting from the Wall Street Journal, which also highlighted research about how around 75% [00:03:00] of iPhones now have Apple Pay activated. Compare that to like the 10% that activated it in the first few years. So those little fees Apple is taking have added up. The journal also reported Apple took in $782 million in fees last year that citing estimations from Deepwater Asset Management. Speaker 1: So yeah, I think you could say people in general are getting more used to using Apple as a means of payment, especially with how Fast Apple makes it to check out online [00:03:30] Securely on your phone. If you want evidence that banks are maybe not happy having Apple take all the glory will seven big banks have come together to make their own Apple Pay. It's called pays. JP Morgan Chase and Wells Fargo and Bank of America and a bunch of their friends, they want you to pay with pays instead of Apple Pay or PayPal. The Journal is reporting that the service is expected to roll out this year, starting with a pilot in the summer at some online merchants. [00:04:00] But how are they gonna get anyone to wanna use a new payment option and how many retailers can they get on board? I want to go back to the Apple savings account and break that down for a minute just so you understand how it compares to what other banks are doing right now. Speaker 1: For starters, let's remember. Apple is not an actual bank. It is not a financial institution. And also not to be confused with Apple Bank in New York. Apple, the tech company is working with Goldman Sachs that is issuing the credit card and handling the savings account. [00:04:30] And funds in the savings account are F D I C insured, but that savings account is only available for Apple card holders. You need a credit card to even get this savings account, and that's what makes it all a little quirky. There are several high yield savings accounts available now that do not require you to have a certain credit card to sign up, and many don't have minimum deposit requirements or fees. There are a few that have higher a p Y than Apple savings account, [00:05:00] so I don't want you to go thinking that you need an Apple credit card to make money in savings. Speaker 1: Let this teach you now that it's a good idea to shop around for where you put your savings. Really, this is just a perk for people who want the Apple credit card, and I think Apple is hoping that this brings more attention to its card. The Apple card's daily cash rewards can be deposited into this savings account and earn money over time and users can also put in more money from other linked bank accounts. There are no fees, no weird rules to earning the high [00:05:30] a p y rate other than the rule that you need. The credit card and the fact that it all requires iOS 16.4 because it all lives on an Apple wallet. And remember, as Apple says in the fine print, a p y rates can change at any time. Apple again is making its credit card enticing here. So when you are pulling up that Apple wallet, it is getting you closer to a world where you interact less with other cards and other banks. Speaker 1: The Wall Street Journal reported that for years now, apple has been asking the big US banks [00:06:00] to let customers see their deposit account balances inside the Apple Wallet, but the banks have largely declined and the journal says it's because banks are wary of seeding the customer experience to Apple. But Goldman Sachs doesn't seem to be wary. It doesn't have a big consumer banking side, so perhaps Goldman Sachs sees working with Apple as a way for it to grow. Goldman Sachs is helping Apple build all this out. In addition to the card and the savings account, there is a separate thing that just launched. It's called [00:06:30] Apple Pay later. It was introduced at WW d c last June. Speaker 3: Apple pay later lets you split the cost of an Apple Pay purchase into four equal payments spread over six weeks with zero interest and no fees of any kind. Speaker 1: Apple Pay Laters financing option just became available a few weeks ago. In March, apple Wallet users can take out a loan so the next time they go to pay for something online with Apple Pay, there is an option to pay for something in smaller installments. The journal reports that Goldman Sachs also helped [00:07:00] Apple with some of the backend services to launch this pay leader program, but it is actually Apple that is approving borrowers and funding the loans and it's done under a subsidiary called Apple Financial L l c. Speaker 2: But we wanna take the Apple Pay experience even further. Speaker 1: Apple was just getting warmed up in 2019 when it came out with the Apple card. Certainly today's financial environment may have more people looking at the Apple card when they see all the buzz about the savings account, but it is the overall [00:07:30] quality of the Apple Pay experience that leads to Apple having a tighter grip on your wallet and there is still plenty of room for improvement. Even with a company like Apple. There are so many hiccups in getting the experience to be smooth in every type of transaction. Not all stores still want to take it and not all cards work on it. Some of my cards have restrictions. They won't let me add them all to my wallet, which is a pain because I would like to put my transit FSA cards in there, which are MasterCard [00:08:00] to pay for my subway rides easier, but it just gives me an error message and tells me to call the card company. Speaker 1: You can look at shopping on Macy's as an example of how messy can get. Sure, you can check out on macy's dot com with Apple Pay, but you cannot put your Macy's credit card in the Apple wallet. It's been almost nine years of Apple Pay existing and the experience is still fragmented for consumers, even with major retailers. So yeah, banks might be worried, but Apple might not be winning the battle for our wallets [00:08:30] if I slate to carry an actual wallet around with me. Yeah, if you have been using Apple Card and if you're signing up for the savings account, please let me know in the comments. I want to hear about your experiences with using Apple Pay and the Wallet app. How often do you still pay with pulling out a physical card? If the comments get good, we may call it out in a future video. Thanks for watching. I'll catch you next week.

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