Apple and Goldman Sachs are leading interest-bearing savings funds as rates increase

October 17, 2022: -Apple will soon permit iPhone users to put credit card rewards from Apple Card and additional funds from separate bank accounts into an interest-bearing protection account.

On Thursday, in a press release, Apple said the feature is expected to launch in the “coming months,” and the FDIC-insured account will be administered by Goldman Sachs, the bank and lender after the Apple Card. Apple said it isn’t telling an annual yield as interest rates are rushing.

Apple is expanding its consumer financial services offerings as it seeks to broaden the use of iPhones with banking and simple payment and credit features. The station operates a payments network with Apple Pay and offers a credit card. It plans to allow people to use iPhones as point-of-sale devices and offer “buy now, pay later” lending this year.

Goldman Sachs, long known as an exclusive Wall Street investment bank, is also bolstering its customer business, partially through partnerships with Apple. Apple’s buy now, pay later product will use some Goldman infrastructure, but Apple stated it plans to handle its own credit decisions and extend loans.

By hopping into interest-bearing accounts, Apple is capitalizing on rising speeds as the Federal Reserve tries to tamp down soaring inflation. Many traditional brick-and-mortar banks haven’t raised interest rates on savings accounts even as rates are rising broadly. According to a Bankrate survey, the national intermediate interest rate for a savings account is only 0.16%.

Apple representatives said the savings account would offer a competitive interest rate, with the best rates available, and would be the same for all users.

Goldman Sachs already offers savings through its Marcus brand with a 2.15% annual yield.

Apple said it wouldn’t require accounts to keep minimum balances, and it won’t charge fees. Users can automatically deposit the Apple Card rewards, called Daily Cash, into the account.

Users can access the Wallet app, a dashboard showing account balance and interest accrued. Apple expressed the feature would begin rolling out for beta testers through a future iOS release and to all users in the coming months.