The tech juggernaut, Apple, known for it’s worldwide successes of the iPhone, iPad, Mac, and Apple Watch, has a savings account with a high interest rate that comes with their credit card. 

Did you know that Apple is pushing into the world of banking and finance?

Apple launched its credit card in the summer of 2019 and has had massive success, with over 6.4 million people becoming Apple Card users. And it makes sense — Apple designs beautiful, intuitive, and functional products, and they’ve managed to translate that same level of quality into their credit card. With features like unlimited daily cash back, zero fees, and the ability to get approved in minutes, all built into the most popular phone in America, it's no surprise that it's been a hit.

Naturally, Apple is looking to build off that success with the launch of its newest banking product, Apple Savings, which drew in nearly $1 billion in deposits in its first four days, according to Forbes.

But is Apple Savings right for you, or is this a product you should avoid?

What is Apple Savings?

Apple Savings is a high-yield savings account (think: savings account that pays an above-average interest rate) offered exclusively to Apple Card users. Just like the Apple Card, Apple Savings is a partnership between Apple and Goldman Sachs. Apple offers the product and technology on the front end, while Goldman Sachs handles all the banking behind the scenes.

Interestingly, unlike other savings accounts that you can open at a bank regardless of any other accounts or products you use, Apple Savings is only available with an existing Apple Card.

In fact, to open an Apple Savings account, you actually need to open up your Apple Card in your Apple Wallet, click on Daily Cash, and then you'll see an option for "Savings" under your Daily Cash Election.

What Are The Benefits of Apple Savings?

Apple knows how to design a good product, and Apple Savings is no different. Here are the benefits or features of Apple Savings:

1. The interest rate is roughly 10x higher than the national average.

While interest rates change over time, Apple Savings is currently offering 4.15% interest on all deposits. To put that in context, the average savings account in the US pays a meager 0.23%, according to Bankrate. That means if you had $10,000 in Apple Savings, you would earn $415 in interest in a year. In comparison, you'd earn just $23 in interest per year from an average US savings account.

"Being an apple card holder, I was inspired to open an apple savings account when I saw the email,” says Billy Quirk of AdvisorCheck. I knew I needed to save more and the high interest rate was the push that I needed," Billy continued.  

2. There are no mandatory minimums or monthly fees. 

Unlike many traditional savings accounts, Apple Savings has no minimum account balance requirements or monthly fees. This makes it an excellent option for many.

3. You can deposit your Daily Cash from your Apple Card directly into your Apple Savings. 

One of the most powerful features of the Apple Card is the high rate of cashback you can receive on purchases. Now, with Apple Savings, you can deposit that cashback directly into your Savings account and earn interest on the deposits. This combines two powerful features from Apple's banking products.

4. You can send, receive, and earn interest on funds within your Savings account. 

Anytime you have money in your Apple Savings account, you are earning interest. In addition, you can easily send and receive funds directly from your Savings account using your phone. This makes moving money and making payments a breeze.

5. Savings offers an intuitive dashboard to track your balance and interest earned. 

One of the core reasons that Apple has been so successful is they know how to build beautiful and intuitive products. Fortunately, that same level of design and intuitiveness carries over to Apple Savings. The dashboard provides a clear overview of your account balance and interest earned, giving you a quick and easy way to view the big picture.

6. The entire experience is integrated right into your Apple Wallet. 

And perhaps the best part of the entire experience is that you don't have to go into a bank, and you don't even need to open a banking app. Just open your phone and manage your money directly within your Apple Wallet. This makes managing your money easier than ever before.

7. All deposits are FDIC-insured up to $250,000. 

That means your money is safe and secure while earning a competitive interest rate.

Overall, Apple Savings is an incredibly powerful and user-friendly product allowing users to make the most of their money. With easy transfers, great interest rates, and a beautiful UI, Apple Savings could be an excellent fit for many.

But, like anything, there are some drawbacks to consider as well.

What Are The Drawbacks of Apple Savings?

While Apple has undoubtedly built a nice product with Apple Savings, it's essential to cover the potential drawbacks or considerations with this account.

1. Easy access can lead to easy spending. Easy access can be a blessing and a curse. Traditionally, savings accounts have been out of sight, out of mind, which makes them a pain to access, but could lead to lower spending. Alternatively, when your Savings is integrated directly into a device that you check an average of 96 times per day, it might end up as more of a spending account than a savings account.

2. Rates aren't the highest, and they are variable. While the 4.15% interest rate is nice, it's not the highest. At the time of writing, a quick search on Investopedia's best high-yield savings accounts shows rates as high as 5.07%. In addition, rates are subject to change as interest rates fluctuate. That said, this is not unique to Apple Savings, as nearly all savings rates will fluctuate with current market interest rates.

3. You must have an Apple Card. One of the biggest downsides I see to the Apple Savings account is that it is being gatekept by the Apple Card. In other words, no Apple Credit card, no Apple Savings. This simply makes it inaccessible to anyone who does not qualify for or is not interested in an Apple Card.

4. Cashback rewards can lead to increased spending. Lastly, one of the big incentives to the Savings account is you can deposit your cashback rewards from the Apple Card directly into the account. But, to get cashback, you must use your Apple Card. So, this could create an incentive to spend more money, to get more cashback, to earn more interest. Ultimately, this could lead to unnecessary spending for cashback rewards and future interest earnings.

5. More Apple products can make it harder to change devices in the future. One interesting drawback to using another fantastic Apple product is that it may make changing devices in the future more challenging. Simply put, if you add banking to the list of things you do with your iPhone, it'll be much more challenging if you decide to switch to any phone other than an iPhone. Of course, if you're all in on Apple products, no worries, but it's something to consider.

6. Additional banking services are limited. The last drawback is that while Apple offers a Credit Card and Savings account, that's all they offer — at least for now. If you want to open an investment account or even a simple checking account, you'll have to go elsewhere. In contrast, one of the benefits of working with a big bank like JP Morgan Chase is that you can save, invest, open a business account, and get approved for a variety of loans, all through a single banking relationship.

Ultimately, Apple Savings is a great product, but it's not without its drawbacks. While it can provide a great way to save money and earn interest, you must weigh the pros and cons.

“I think taking advantage of this new offering from Apple is a great idea,” says Jeffrey Lapidus, a financial advisor at JBL Financial Services. “We have been recommending that all of our Apple user clients investigate this high yielding Money Market for their savings. Great management with Goldman Sachs and better than the Marcus Account. Go for it!” Jeffrey continued. 

Who Is Apple Savings For?

In the end, Apple Savings can be a great fit for anyone who is currently an Apple Cardholder that's looking for a simple, easy, and intuitive way to earn 10x the national average interest rate on their savings. In addition, it's great for anyone that's comfortable using technology and has no problem with a fully digital banking experience through their iPhone. And, with no minimum account balances and no monthly fees, it's perfect for anyone who has less in savings OR who has grown tired of all the fees and penalties in the traditional banking system.

Alternatively, Apple Savings may be a poor fit for anyone who needs a more comprehensive banking relationship complete with investment accounts, business accounts, and brick-and-mortar locations. Of course, if you don't feel comfortable using technology or relying on your iPhone as the interface for your bank account, then Apple Savings may not be right for you. And lastly, if you don't have an Apple Credit Card, either because you can't qualify or simply don't want one, Apple Savings won't be an option.

In the end, Apple Savings is a great product that can provide an easy way to save money and earn some interest. However, it's important to weigh the pros and cons before deciding whether or not this product is right for you. While many people may find it perfect for their needs, others may benefit more from working with a bigger bank where they can access a broader range of services. 

Whatever your financial situation may be, make sure you're making the best decision for yourself. And sometimes, making the best decision for yourself involves consulting the advice of a trusted Financial Advisor. 

That's where we come in.

At AdvisorCheck, we offer a proprietary Advisor search tool that lets you find the best financial advisors in your area. And with a free membership, you can access detailed reports on each advisor and compare them side-by-side to find the one that best fits your needs. With AdvisorCheck, you can get the advice you need to make the best decision about saving for your future.

So don't wait — sign up for a free membership today to start taking advantage of all the great features AdvisorCheck has to offer.

Written by Anders Skagerberg, CFP® 

Fact checked by Luke Jara

Reviewed by Leonard Kim

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