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Apple’s High-Yield Savings Account Created In Partnership With Goldman Sachs

Apple's new high-yield saving account comes at a right time when inflation is at the highest hurting households.

A new high-yield saving account from Apple in partnership with Goldman Sachs comes at when inflation is at an all-time high.

Apple, Inc. (NASDAQ:AAPL) stirred up excitement by announcing earlier this month a high-yielding savings account that promises an annual percentage yield of 4.15%, a percentage that nearly matches the inflation rate. The new service will be offered in collaboration with Goldman Sachs Group, Inc. (NYSE:GS).

A customer of the Hamburger Sparkasse holds a mobile phone in her hand and adds her credit card to the Apple Pay payment service. On Tuesday, 371 savings banks in Germany, Commerzbank, Norisbank and LBBW, launched support for Apple’s payment service. CHRISTOPH DERNBACH/BENZINGA

Apple Card was first introduced in 2019 as a credit card for all iPhone users for those on approved credit in 2019 with Goldman Sachs as the issuing bank and MasterCard as the payment network.

“Our goal is to build tools that help users lead healthier financial lives, and building Savings into Apple Card in Wallet enables them to spend, send, and save Daily Cash directly and seamlessly — all from one place,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet.

There are no fees with the Apple Card that as the Savings account from Goldman Sachs builds up financial health benefits, which Apple already offers.

In the first episode of “Signal or Noise” this week, Creative Planning’s Chief Market Strategist Charlie Bilello discussed the strategic move with the firm’s president and CEO Peter Mallouk.

Apple’s launch of a high-yield savings account is a “pretty smart move” to push the company’s Apple Card, since one has to own an Apple Card in order to have the savings account, Bilello said.

“They’re trying to get everyone to be on their phone, of course, all the time. And now you have the watch the phone, the iPad, the Mac. [The] Apple ecosystem just continues to grow,” he said.

Apple had a successful first quarter on 2023 where the company earned a revenue of $117 billion, but was down 5% from the first quarter of 2022. The earnings diluted about $1.88 per share.

Mallouk called the move “typical Apple genius,” saying that, while Apple may not want to get into the money management business for fear of risking their “perfection image,” making money on cash is an easy business to be in.

“The brilliance of Apple has been about taking the complicated and making it look easy,” Mallouk said, explaining that, while Apple didn’t invent the smartphone, the company made its own phone visually appealing and very organized so that anybody could figure it out.

Mallouk said he sees Apple doing the same with its savings account. The account could be a much easier option for customers to invest their money in rather than Treasury bills, certificate of deposits or money market funds.

“This is going to be a grand slam, and a ton of people are going to sign up for their card, and it’s going to be another huge profit center for them,” he added.

The yield in savings comes at a time when inflation is at its all-time high where households are cutting down on expenses.

“Stashing money for big purchases or with the same app used to buy things each day could prove a little too convenient, tempting users to spend instead of save,” The Wall Street Journal said.

Produced in association with Benzinga

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