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5 Reasons to Skip Apple’s Savings Account Today

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5 Reasons to Skip Apple’s Savings Account Today

Key Points

  • Apple introduced Apple’s savings account with high-yield interest rates in April 2023.
  • Apple’s savings account pays 4.15% APY, which is higher than the national average of 0.4%.
  • Apple’s savings account requires an iPhone, an Apple credit card, and the Apple Wallet application.
  • Apple’s savings account has been popular, but Goldman Sachs, the bank partner, has reportedly lost over one billion dollars on the accounts.
  • Apple’s credit card interest rate is between 15.74% and 26.75%, which can outweigh the interest earned from the savings account.

Apple introduced Apple’s savings account with high-yield interest rates in April 2023. Apple’s media department has been working overtime to convince consumers that their high-yield savings account is the greatest thing since creamed corn.

Is it any good, or should we skip Apple’s savings account? It’s a complicated question!

The best answer is how adept you are at staying on top of credit cards. You’ll need to sign up for an Apple credit card to access Apple’s savings account. If you struggle with paying your credit card every month, we suggest that you run (not walk) away from this saving account.

Users of Apple’s savings account need to be “dialed into” electronic financial management. You’ll transfer funds into and out of the savings account via the iPhone’s Wallet application. You don’t have a brick-and-mortar bank to walk into when you need help. It’s certainly not a catastrophic challenge, but it may be critical for some users who prefer a face-to-face encounter.

If you’re on top of your financial game, you may find there are benefits to Apple’s savings account. Unwilling to pay attention to “cash back” retailers? You may find that your cashback isn’t very much cash at all. If you’re not willing to pay close attention to the mandatory Apple credit card, skip Apple’s savings account.

Let’s break down what you need to know about the Apple savings account and why you should avoid it.

Some Background on the Apple Savings Account

Apple’s savings accounts pay 4.15% APY for a high-yield account. Not too shabby, huh? The national average is approximately 0.4% on a low-yield savings account. Apple (and many articles) push the high-interest rate and ignore the apples-to-oranges comparison.

Low-yield interest savings accounts pay an embarrassingly low-interest rate (like .01%) and are not a good deal for consumers. On the other side, high-yield savings accounts are not new. Apple didn’t invent them!

Fun Fact

Between the 1970s and 1980s, the interest rate for savings accounts was between 5% and 15%. There’s a strong correlation between the inflation rate and the interest rate on savings accounts. As the 1990s progressed, the interest rates fell back into the 5% zone. By the mid-2010s, the interest rate was down to 1%.

High-yield savings accounts have been around for a long time. Consumers are willing to trade flexibility (ease of withdrawal, early withdrawal penalties) for a high rate of return on their savings accounts.

Apple’s savings account has been incredibly popular with consumers. Within the first month of operation, consumers transferred roughly one billion dollars into Apple saving accounts. The number jumped to ten billion dollars by early August 2023.

However, not everyone loves it. Apple’s credit card partner, Goldman Sachs (GS), is rumored to have lost over one billion dollars on the accounts. GS is actively looking for an escape hatch to bail out of the savings account business with Apple.

If the bank is losing money by paying consumers so much interest, why wouldn’t we want to sign up for the savings account?

Let’s look at the facts behind the hype and help you determine if Apple’s savings account is a good choice for you or a sour apple (get it?) for your finances.

Quick Facts

iPhone Required?Yes
Apple Credit Card Required?Yes
Interest Rate4.15% APY
Balance TransferMaybe yes, maybe no!
Minimum Age18
Cash Earning3% daily, no limit
Signup Bonus?None
Wallet Integration?Yes

Reasons to Skip Apple’s Savings Account

For every reason we like Apple’s savings account, we also have one or two reasons to skip it. We’re not Negative Nellies, but we have a few concerns to share with you. Apple’s savings account is a good fit for a select clientele.

Let’s look at a few of the drawbacks and see if they impact you.

An iPhone is Required

There’s no escaping from the fact that you must own an iPhone if you want to use Apple’s savings account. Approximately 58% of U.S. cell phone users have an Apple iPhone tucked into their pocket. Based on that math, 42% of U.S. consumers won’t be able to open Apple’s savings account.

You Can Only Use Apple Wallet

The savings account set up by Apple utilizes the (proprietary) Apple Wallet application. Users can configure their savings account settings and transfer funds in and out of the savings account through the Wallet application.

Don’t have an iPhone? Not to worry; you can purchase a new iPhone and quickly set up the Apple Wallet. (Wink, wink. Maybe Apple has an overall goal of juicing up its cell phone sales… iPhone sales did decrease by 3.7% from 2021 to 2022.)

iPhone Operating System

You need to have iOS 16.4 or a more current iOS version to use the Apple savings account. Currently, subject to change at the drop of a hat, all iPhones from the 8th generation (2017) and later are compatible with iOS 16.4. We’d recommend that you check grandma’s iPhone iOS before you (long-term) borrow her phone.

While we jest about grandma’s cell phone, the age of the cell phone is something to keep in mind. If you have an older cell phone, you may end up in a position where Apple stops software updates for your version of the iPhone. You may need to invest in a more current iPhone if this happens.

An Apple Credit Card is Required

Opening an Apple credit card is a significant drawback of the Apple savings account. No Apple credit card equals no Apple savings account.

Americans love their credit cards! In December 2022, the average cardholder’s credit card debt was approximately $7,300. Not a big deal, right? You don’t have $7,300 on your credit card! But suppose you didn’t pay off your card every month. How much will carrying that debt on Apple’s credit card cost you?

Interest Rate

The Apple credit card interest rate falls between 15.74 and 26.75 percent. Depending on your credit score, you may find yourself lower (or higher!) on the interest scale. If you’re one of those who carry a month-to-month credit card balance, be very aware of the interest rate.

The credit card’s interest rate (what you’re paying in credit card interest for month-to-month balance rollover!) will fall between four times and six and a half times greater than the interest rate you’re earning from the savings account. Whoa!

Balance Transfer

When we dig into the fine print of the Apple credit card, the answers about balance transfers are elusive. Traditionally, if we have a higher interest rate credit card and a lower interest rate credit card, we’ll transfer the balance to the lower interest rate credit card. It’s as American as apple pie!

A balance between credit cards primarily occurs between the credit card companies. Let’s say you have a Citibank credit card account with a $10,000 balance at 15% interest. You also have a Key credit card account with a zero-dollar balance at 7% interest. You’ll transfer the $10,000 Citibank balance to the Key account. The debt is transferred from your Citibank to your Key account. Easy peasy!

Apple considers balance transfers to be “non-conforming payments.” There’s a lot of noise from Apple credit card users about the success or failure of balance transfers. We see nothing in the fine print that indicates that the Apple credit card accepts balance transfers.

Here’s our non-technical summary of Apple’s non-conforming payment policy “Maybe we’ll take your payment, maybe we won’t. Maybe we’ll credit the entire amount to your account; maybe we won’t. Maybe we’ll credit your account and close it; maybe we won’t; maybe we’ll continue to charge you interest while we sort out your non-conforming payment; maybe we won’t.”

You should not expect to transfer your debt from the Apple card to another credit card. If you cannot pay off your credit card each month, the Apple card may be a credit card to avoid.

Minimum Age

To open the Apple savings account, you need to be approved for the Goldman Sachs (GS) Apple credit card. To be approved for the GS Apple credit card, you need to fill out an application that contains your date of birth (DOB) and social security number. GS will run a credit check on you. If you meet their financial criteria, you’ll be granted a credit card.

If you’re looking to open a savings account for a young child, you can do so, but as a family account. Oh, by the way, you can only have one interest-earning savings account with Apple. You can’t open an account for a child under 18 and list the child as the primary account holder. The child account (AKA Family) earns interest, or your account earns interest — not both.

Apple One Family
Apple’s Savings Account is not for everyone. Be sure to read the fine print!

Cash Earning

It’s hard not to like a credit card that pays 3% cash back on every purchase. Is it too good to be true? Depending on your spending habits, it may not be as much cash as you think it will be. Let’s look!

Apple Cash Back 

How to EarnPercentage Earned
Apple, Ace, T-Mobile, Nike, Uber, Uber Eats, Panera, Walgreens, Exxon, Mobil3%
2% cash back when you use the
Apple credit card with Apple Pay
2%
1% cash back when you use the Apple credit card when Apple Pay isn’t an option1%

How much do you spend annually with purchases from the 3% earning businesses? Let’s be crazy generous and say that (combined) you’re spending $5,000 at these businesses. You’ll earn $150. The same spending, but with Apply Pay, will make you $100 annually. 1% cash back from the Apple credit card will earn you $50.

Chase Freedom Unlimited Cash Back

Other credit cards may offer you a higher cash-back rate with fewer restrictions. Let’s look at the Chase Freedom Unlimited. The percentage earned is highest during the first year of membership.

How to EarnPercentage Earned
Travel via Chase Ultimate Rewards6.5%
Drugstore and Dining4.5%
Other Purchases3%

Depending on how and where you use your credit card will impact what kind of cashback reward you’ll receive from any credit card company. Let’s say that we use the card listed above for everything you can, and you rack up $30,000 in annual purchases. That’s $900 in cashback at the lowest cashback percentage earned.

Signup Bonus

One of the pure joys of switching credit cards is the signup bonus! (Tell us that we’re lying. You know it’s true!)

Unfortunately, the Apple credit card has no signup bonus. You can find many credit card signup bonuses if you shop around for a few minutes.

CashbackSignup Bonus
Chase Freedom Unlimited1.5%-6.5%$300
Capital One Venture Rewards2x-5x Miles75,000 Miles
Wells Fargo Active Cash Card2%$200
Apple1-3%Zero

The three different signup examples reflect the other signup bonuses you can search for. Cash is applied to your balance (Chase) as you use the card. Airline miles (Capital One) should appeal to frequent fliers. A lump sum (Wells Fargo) might appeal to other card users.

It’s all about picking a card that provides you with the bonus that has the most appeal to you. Speaking of you, you have no signup bonus from Apple.

Plus, be sure to read the fine print. Your bonus for the Chase Freedom Unlimited card is an additional 1.5% cashback in the first year. For Capital One Venture Rewards, you get your award after spending $4,000 in the first three months. With the Wells Fargo Active Cash Card, you’re awarded only after you spend $500 in the first three months. For the Apple credit card, your cashback rates vary.

Wallet Integration

A key feature of Apple’s savings accounts is the ability to use the iPhone Apple Wallet application to handle your savings. You’ve reached the land of digital currency and digital transactions. There’s nothing wrong with that, but it’s also nice to easily access our cash.

Bank Transfer

The savings account exists in the digital realm, not the paper currency world. When it’s time to transfer funds out of Apple’s savings account, you’ll need patience. You’ll transfer the funds into a secondary checking or savings account with a different financial institution. The funds are only available to you (hard currency) after they’ve been successfully transferred into your secondary account. It may take a day for the funds to transfer between accounts, and it may take three days.

Debit Card Transfer

You can transfer funds in less than thirty minutes if you have an eligible Mastercard or Visa debit card. Unfortunately, Apple’s savings account isn’t tied to any debit card. You must use a debit card from a different financial institution if you’re performing a debit card transfer.

Alternatives to Apple’s Savings Account

It’s easy to poke holes in something but more challenging to offer an alternative. Below are three high-interest-rate savings accounts that bear further investigation.

  • Popular Direct offers a 5.23% APR with a minimum deposit of $100.
  • UFB Direct has no fees or minimum deposit and a 5.06% APR. The account has an ATM card and 91,000 ATM locations available for quick access to cash.
  • Laurel Road offers 5% APR and no minimum deposit to open the account — no minimum account balance is required.

When shopping for a high-interest savings account, it pays (literally) to read the fine print. Many savings accounts have an interest rate tier system. The greater the account balance, the greater the interest rate. The highest levels of interest may only be available for large ($5,000, $10,000+) balances. The interest rates may be a promotion, so pay attention to the time.

Signs You Should Skip Apple’s Savings Account

Do you already have a high-interest savings account? You most likely have little need for Apple’s savings account. When comparing interest rates across high-yield savings accounts, Apple’s offered interest rate isn’t anything to write home about.

Do you carry a monthly balance on your existing credit cards? If you expect to maintain a balance on your Apple credit card, we’d suggest steering yourself to a different savings account. The interest rate on the required credit card falls between 16% and 26%. Whatever interest you make from the savings account may be absorbed by the interest you’re paying on the credit card.

Do you want to transfer your balance from the Apple Card to a different credit card with a lower interest rate? You may find that Apple won’t allow you to do so. You may be stuck paying a higher interest rate. You’ll find information about balance transfers if you read other credit cards’ fine print. You won’t find such language in the Apple Card terms of service.

Do you routinely withdraw cash from your savings account via ATM? Or transfer funds from your savings account to a checking account and withdraw some money from there? Apple’s savings account requires you to use a different account (Chase, Key, Bank of America, Wells Fargo, etc.) to withdraw cash.

Send it from Apple Savings to your other account and then withdraw it or send it from Apple Savings to a qualified Visa or Mastercard debit card and take the cash from there. Overall, expect to be able to get cash, but it may take longer than just walking up to an ATM on your way to the rodeo.

5 Reasons You May Want to Skip Apple’s Savings Account

1.) You already have a high-yield savings account.
2.) You carry a monthly credit card balance.
3.) Balance transfers are a “no-no.” You’ll eat the high-interest credit card debt.
4.) There’s no signup bonus. No cash, no miles, no love. 
5.) It may take several days to obtain “cold, hard cash.” 

Wrapping Up

We recommend that you skip Apple’s savings account if you’re in the market for a high-yield savings account. Other high-yield savings accounts have better interest rates and signup bonuses. We particularly don’t like the need to sign up for a credit card to open a saving account. Consumers may find the high-interest credit card absorbs any potential cash-back rewards or interest earned from the savings account.

Frequently Asked Questions

Is Apple's new savings account worth it?

The Apple savings account offers a 4.15% APR. If classified as a low-interest savings account, the Apple savings account looks excellent. When we expand our view and include other high-interest savings accounts, the Apple savings account could look better. Different credit card companies offer higher APYs, rapid access to funds, don’t require signing up for a credit card, better benefits, and easy balance transfers.

How long does it take to get money out of Apple's savings account?

It will take one to three days to transfer from a savings account to your linked external banking account. If you’re moving funds from your Apple savings to Apple cash, you should have immediate availability.

Is there a downside to Apple's savings account?

Yes, you need to have an iPhone with the current iOS. You’ll need to open an Apple credit card.

If you need help with credit card debt, there are better ideas than adding an additional credit card to the mix. There are no introductory low-interest rates for the credit card, and you can’t transfer the balance to a (different) low-interest credit card.

What is the minimum balance for Apple savings?

Zero! After you’re approved for an Apple credit card, you can open the Apple savings account. No credit card equals no savings account.

What is the maximum balance in Apple savings?

$250,000.

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