Apple recently launched a savings account offering 4.15% APY interest, outpacing average savings accounts nearly 10x over. But is this new offer right for you?
I‘ll outline 5 key disadvantages to Apple‘s savings account you should review before rushing to open a new account. While the interest rate seems appealing, limitations around required credit cards, withdrawal restrictions, account flexibility and alternative competitive offers give reason to pause.
Whether Apple‘s savings deal is worth it or not depends largely on your personal financial situation. My goal is to provide comprehensive facts and comparisons to help you make the most informed decision.
Reason 1: Required High Interest Credit Card
To qualify for Apple‘s 4.15% APY savings rate, you must open an Apple credit card. This card charges variable interest between 15.74% and 26.75% APR if you carry any kind of balance.
- For example, if you carried a $2,000 balance on the Apple card charging 20% interest, you‘d pay $400 in interest fees yearly.
- Meanwhile the savings account would only earn you $83 per year in interest at 4.15% APY on a $2,000 balance.
So in this scenario, you‘d still lose $317 per year when you factor both accounts.
| Account | Balance | Interest Rate | Yearly Interest |
|---|---|---|---|
| Apple Credit Card | $2,000 | 20% | -$400 (fees paid) |
| Apple Savings | $2,000 | 4.15% | +$83 (earned) |
| Total | -$317 net loss |
As you can see, the high credit card interest can quickly negate any savings account gains.
Reason 2: Slow Withdrawals
While you can deposit funds instantly into the Apple savings account, withdrawing your money takes 1-3 business days for external bank transfers.
Without checks or an ATM card, you cannot directly access savings funds same-day in cash. Transfers go through a settlement process before becoming available for spending.
So Apple‘s savings works well for parking cash you don‘t need immediate access too. But it poses challenges if you require routine withdrawals or cash on hand.
Reason 3: Competitors Offer Similar (or Better) Rates
How does Apple‘s 4.15% APY rate compare against other top high yield savings accounts?
| Bank | APY | Minimum Deposit | Credit Card Required? |
|---|---|---|---|
| Apple | 4.15% | $0 | Yes |
| CIT Bank | 4.75% | $100 | No |
| Marcus by Goldman Sachs | 4.75% | $0 | No |
| Bread Savings | 5.00% | $100 | No |
| BrioDirect | 5.10% | $100 | No |
As you can see, Apple‘s rate is competitive but not the highest available. Other online banks match or exceed Apple‘s offer without requiring an associated credit card.
So if you already have savings at another institution earning around 4%+ interest, Apple likely provides no incremental rate benefit.
Reason 4: Lack of Balance Transfer Options
A common way to reduce credit card interest fees is transferring balances from high APR cards to introductory 0% APR cards. However…
Apple considers balance transfers "non-confirming payments" with uncertainty whether they will post correctly or at all. So offloading Apple card balances to cards with lower rates appears difficult.
This could really trap consumers in high interest debt cycles.
Below are some examples of popular credit cards offering 0% intro APR periods for transferred balances:
| Card | 0% Term | Balance Transfer Fee |
|---|---|---|
| Wells Fargo Reflect | 21 months | 3% fee |
| Citi Simplicity | 21 months | 5% fee |
| Chase Slate Edge | 18 months | 3% fee |
While paying a balance transfer fee stings, it beats paying high double-digit interest charges longer term. But Apple lacks clear paths to reduce rates this way.
Am I Better Off Avoiding This Account?
The Apple savings account certainly has pros and cons. Ultimately whether it fits your needs depends on your financial priorities.
You may want to skip opening an Apple savings account if:
- You already have a competitive high yield savings account elsewhere
- You routinely carry credit card balances month-to-month
- You want flexibility to easily transfer balances to low/no interest cards
- You value quick withdrawals without external bank delays
- You prefer access to in-person tellers and ATM machines
On the flip side, Apple‘s offer pays nicely if:
- You have no existing high yield savings account
- You pay all balances in full monthly without interest fees
- You just seek a place to park cash not needed for daily uses
As with any financial account, your particular situation matters most. So carefully weigh Apple‘s savings product against your specific needs and priorities before transferring any funds.
Frequently Asked Questions
What are the main downsides to Apple‘s Savings Account?
The biggest disadvantages are the required Apple credit card with high interest rates, multi-day delays withdrawing money, lack of ATM/branch access, uncertain balance transfer options, and potential to find higher savings rates elsewhere without needing a paired credit card.
What interest rate does the Apple Credit Card charge?
The Apple Card charges variable APR between 15.74% on the low end up to 26.75% for some users depending on credit history.
How does Apple‘s 4.15% APY compare to other banks?
Apple‘s rate is competitive but not the highest among top online only banks. Many rivals like CIT Bank, Marcus, and Bread Savings offer the same or slightly higher interest without requiring a credit card.
Can I transfer other credit card balances onto my Apple Card?
Balance transfers are considered "non-confirming payments", meaning it‘s uncertain whether transfers will go through. So it appears moving high interest balances from other cards onto the Apple Card will be difficult.
I hope this detailed analysis gives you the facts needed to determine if Apple‘s new high-yield savings account is a fit or folly for your specific financial situation and priorities. Let me know if any other questions come up!
