Revolut boss says Apple’s new high-yield savings account is ‘scary’ for the market

Revolut’s US CEO has said Apple’s foray into banking is “scary” after the tech company launched a competing high-yield savings account.

Apple made headlines last month when it launched its new account with an interest rate of 4.15 percent — about 10 times the average savings rate, which is a paltry 0.4 percent.

The deal generated nearly $1 billion in deposits in its first four days, sources familiar with the matter said Forbes.

Now Sid Jajodia, the US CEO of digital bank Revolut, has admitted that the move poses a “challenge” to mainstream banks that offer much lower rates.

“Apple, by having an installed customer base, is one of the best distribution channels you can find,” Jajodia told a panel at the Fintech Nexus conference in New York last week.

Apple made headlines last month when it launched its new account with an interest rate of 4.15 percent — about 10 times the average savings rate

“Great for Goldman, great for any other bank that partners with Apple”

He speculated that other banks could collaborate with the technology company, but added that it would not be open to working with “anyone and anyone.”

“You have to have the right scale, the right balance sheet strength, the right credibility for Apple to work with; he said.

‘So it does create a challenge in the market for others.’

Apple doesn’t necessarily offer the highest rate on the market, as Revolut accounts offer an APY as high as 4.25 percent.

HMBradley also offers up to 4.5 percent and SoFi accounts have APY up to 4.2 percent.

But Apple’s deal remains competitive and far exceeds those offered by mainstream banks.

Data from the Federal Deposit Insurance Corporation shows that the current average bank savings rate is 0.4 percent.

Chase savings account, for example, offers a 0.01 percent rate on his savings account.

The deal is only available to people who have an Apple Card – Apple’s credit card

In practice, Apple’s competitive deal means users can earn up to 10 times more over the course of a year.

For example, if a customer puts $1,000 into a savings account that offers the Fed’s average yield of 0.40 percent and leaves it alone, he’ll only earn $4.00 in interest in 12 months.

However, with the Apple account, they would earn $41.50 on their savings – a difference of $37.60.

The company also requires no minimum balance or deposit – meaning customers can sign up with just $1 – and withdraw the funds at any time.

The deal is only available to people who have an Apple Card – Apple’s credit card.

Users must sign up through the wallet app on their iPhones.

Jajodia explained, “If you’re just leading the way with price on deposits, Apple probably won’t be the best price in the market, but it has the best ability to absorb a good portion of the price in the deposits.” on the market.’

He added that the offer was “scary for anyone leading the way just with deposit prices.”