Apple’s high-yield savings account has reached $10 billion in U.S. deposits since its launch in April, the company has announced, despite setbacks in rolling out the service.
The savings account offers a competitive yield of 4.15 percent – more than 10 times the average interest rate given by US banks.
The news comes in a wake of recent reports that Goldman Sachs, which partnered with Apple on the venture, was considering an exit plan to end the relationship, which helped the iPhone maker break into the financial world.
The Wall Street Journal claimed in June that the bank was in talks to transfer the partnership and other services it helps offer to American Express.
It comes after Apple ran into some trouble after the service launched, with customers accusing the company of holding their money “hostage” while struggling to access savings.
Apple’s high-yield savings account has hit $10 billion in U.S. deposits since its launch in April, the company has announced
The return on Apple’s savings account is more than ten times the average savings rate in the US, currently a paltry 0.39 percent
Since the account launched, 97 percent of users have opted to have their Apple Daily Cash — a cashback rewards program — deposited into the account, the company said in a statement.
The savings account is built into the Wallet app on iPhones, allowing customers to move money in and out.
It’s only available to those using the credit card, Apple Card, but it allows users to access their funds at any time – unlike many regular accounts that limit customers to six ATM withdrawals per year.
When it launched in April, it immediately attracted a lot of attention because of its competitive rate. Sources told Forbes that about 240,000 accounts were opened in the first week of work.
And two sources revealed that the offering raised nearly $400 million in deposits on its first day.
Savings rates have remained pitifully low compared to the cost of borrowing, with average returns in the US now standing at 0.39 percent, according to data from the Federal Deposit Insurance Corp. (FDIC).
It falls well below the Federal Reserve’s benchmark interest rate, which is at its highest level in more than two decades after the central bank raised rates again last week.
Three of America’s largest banks raked in nearly $50 billion in higher interest payments last quarter — but none have raised interest rates on their savings accounts.
JPMorgan Chase and Bank of America offer a pitiful 0.01 percent yield on their standard savings account — while Wells Fargo offers a slightly better 0.15 percent.
Three of America’s largest banks raked in nearly $50 billion from higher interest payments last quarter — but none increased yields in their savings accounts, a Dailymail.com analysis finds
It means that a saver with an Apple account can earn 400 times more interest than, say, a Bank of America customer.
For example, if a customer deposits $1,000 into a Bank of America savings account, he will earn only $0.10 in interest in 12 months.
However, with the Apple account, they would earn $41.50 from their savings.
However, the tech giant has experienced some hiccups when rolling out the savings account.
Last month, the company was forced to quietly credit some of its customers $100 — after they accused the tech giant of holding their money “hostage.”
The account’s launch was controversial after depositors complained they couldn’t access their funds or transfer money between accounts.
Saver Nathan Thacker, who lives outside of Atlanta, told the Wall Street Journal in June, he attempted to transfer $1,700 from his Apple account to JPMorgan Chase since May 15, but failed.
Every time he contacted Goldman Sachs customer service, he was told to wait a few days. He only received the money after the outlet stepped in.
Similar stories were also posted on social media from savers who could not get their money.
Minnesota’s Kevin Smyth tweeted Apple Chief Executive Tim Cook, writing, “Were you planning on partnering with a bank that takes people’s savings hostage?”
Another Twitter user wrote, “Don’t set up direct deposit with an Apple savings account.
“Based on my experience, you might not see that money for 3-4 weeks. Let them have the nickels and dimes and nothing else.”
Goldman Sachs said at the time that the difficulties were being experienced by a “limited” number of customers. The added delays were often due to rigorous processes designed to protect users.
A spokesperson said: “Customer response to the new Savings Account for Apple Card users has been excellent and exceeds our expectations.
“While the vast majority of customers do not see any delays in transferring their funds, in a limited number of cases a user may experience a delayed transfer due to processes designed to help protect their accounts.”
The spokesperson added: “We take our obligation to protect our customers’ deposits very seriously and are working to strike a balance between a seamless customer experience and that protection.”
An email to customers published on the forum MacRumors reads: ‘The experience we provided with a withdrawal request you made to your savings account in May did not meet our standards.
“Thank you for your patience while completing internal reviews. We will make a one-time $100 goodwill credit to your savings account as a courtesy to you for this experience.”
According to emails posted on online forums, Apple has quietly credited some of its savings account customers with a $100 “goodwill payment.”
Neither Apple nor Goldman Sachs responded to DailyMail.com’s requests for comment at the time.
Meanwhile, it was reported last week that Apple CEO Tim Cook, in conjunction with Goldman Sachs, had been declined from the company’s credit card because he was falsely perceived as a high-risk fraud target.
However, in the latest statement, executives from both Apple and Goldman Sachs gave a better picture.
“With no fees, no minimum deposits, and no minimum balance requirements, Savings offers an easy way for users to save money every day, and we are delighted to see the excellent reception from both new and existing customers,” said Jennifer Bailey, vice president of Apple Pay and Apple Wallet.
“We are thrilled with the success of the savings account as we continue to provide seamless, value-added products to Apple Card customers, with a shared focus on creating a best-in-class customer experience that helps consumers lead healthier financial lives Liz Martin, Head of Enterprise Partnerships at Goldman Sachs.