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Apple’s latest foray into fintech offers high interest, but is it too interested in users’ lives?
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Since becoming a force in the tech world, Apple has made several moves into financial technology, also known as fintech. In 2014, it introduced Apple Pay. The company dipped its toe into banking when its credit card, Apple Card, arrived in 2019. Now, the tech giant is making a bigger splash with the Apple Card savings account, which comes with an impressive 4.15% interest rate.
The account is baked into your iPhone operating system, along with your Apple credit card, in your Apple Wallet app. If that sounds like a lot of only-Apple features stacked on top of one another, that’s because it is.
For that reason, Vox senior reporter Sara Morrison said setting up her account was “shockingly easy.” She also said she’s made more in interest with Apple in three weeks than she did in almost three years with her previous savings account — although to be fair, some conventional financial institutions offer similar savings rates, in line with the Federal Reserve’s campaign of interest rate hikes.
But those benefits of being an Apple customer come with questions about how far the company reaches into its customers’ lives.
“It’s in your car. It’s in your financial life. It’s in your health services. I mean, it’s everywhere,” Morrison said. “And it makes sense that banks would be in there. But when you think about it, it’s come such a long way so fast into so many things.”
Morrison wrote about her experience with the account in Vox. “Marketplace” host Kai Ryssdal spoke with Morrison about what it’s like banking on her iPhone. The following is an edited transcript of their conversation.
Kai Ryssdal: You opened up one of these Apple savings accounts. First of all, what was it like? A couple of taps and boom, you’re in?
Sara Morrison: Yeah, it was shockingly easy. Apple products are always pretty easy, but the last time I opened up a savings account with another bank, it was a much longer and more complicated process. And this was literally a few taps.
Ryssdal: I do wonder, though, how shockingly frictionless it was to give Apple more access to your money.
Morrison: I mean, there’s always considerations about how much one company should have of me, and certainly your financial life is a big part of that. I had those concerns when I opened up the Apple Card, which you have to have to get the savings account. That is a concern, but it’s also a 4.15% interest rate on the savings account.
Ryssdal: That’s not nothing. I do wonder, though, what Apple’s reputation for frictionless service means for competitors in this space because now, your savings account is on your phone, and man, that’s pretty easy.
Morrison: Yeah, and one thing that Apple does notoriously is it has a ton of control over its devices. This is all within its Wallet app.
Ryssdal: If somebody had said to you five years ago, maybe eight years ago, that Apple was going to have a savings account, what would be your reaction?
Morrison: I mean, absolutely not. I didn’t ever see why they’d want to do it, why anybody would want to use Apple as their savings account when there are banks. For me — I’m a little old — Apple was a computer maker. Now, it’s a whole lot more. It’s in your car. It’s in your financial life. It’s in your health services. I mean, it’s everywhere. And it makes sense that banks would be in there. But when you think about it, it’s come such a long way so fast into so many things.
Ryssdal: So what’s next? Are we going to see an Apple mortgage app? Are we going to see a Robinhood kind of thing where you can actively trade? I mean, in theory, Tim Cook and the gang in Cupertino are looking for more ways to get their hands on more of your money.
Morrison: Yeah, in theory. I’m not sure how much further they want to go into financial services because you get into a whole thing of regulations. I mean, Apple is not an actual bank — they’ve teamed up with Goldman Sachs to provide the banking service. But they do have the “buy now, pay later” service that’s fairly new, which they set up their own sort of loan company to do. So it’s not out of the realm of possibility that they’d expand that. You have to think, what’s the business interest for Apple to do that? But I wouldn’t rule it out. I wouldn’t rule anything out.
Ryssdal: Let me ask you this, though. You said you’re getting 4.15% on your Apple savings account now. How much has that meant for you in the three weeks that they’ve had your money?
Morrison: I have gotten an interest payment. So far, it’s been three weeks, and it was I think more in that month than I’ve gotten in the last year, possibly two years, maybe three, of my previous high-yield savings accounts. So it is significant. I was very happy to see it.
Ryssdal: “High yield” in air quotes there. But that’s kind of what I’m saying, right? I mean, they’ve made this very attractive for you to give them more access.
Morrison: Yeah, I mean, when I saw the 4.15% and I looked at my then-current savings account, which was a fraction of that, I was actually kind of mad at my old bank. I said, “No, I’m gonna go with an FDIC-insured account that gives me as much money as possible.” There’s inflation. I feel like I’m losing money at a certain point when the interest rate isn’t high enough, so I might as well be losing slightly less money with this.
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