Less than four months after Apple
Users must have an Apple Card to access a savings account through Apple's banking partner Goldman Sachs, which made the feature available in mid-April. Nearly all customers, or 97%, have opted to automatically send card rewards they earn with each purchase directly to the associated savings account, which pays 4.15%, Apple said in a press release.
"Savings provides an easy way for users to save money every day, and we're thrilled to see the excellent reception from customers both new and existing," said Jennifer Bailey, Apple's vice president of Apple Pay and Apple Wallet, in the release.
The news comes on the heels of reports that
Other credit card issuers that offer an associated digital savings account have reported strong deposit inflows as interest rates rose this year. Discover Financial Services last month said its direct-to-consumer balances increased by $2 billion during the quarter ended June 30, with total deposits up 20% year-over-year.
Apple's deposit volume appears to be robust primarily because consumers are eager to park their savings in higher-interest accounts, said Brian Riley, director of credit advisory services and co-head of payments at Javelin Strategy & Research.
"It's unlikely that reaching the $10 billion mark had much to do with Apple's card rewards getting auto-deposited, because Apple pays 3% cash-back rewards only on Apple purchases and 2% on everything else," Riley said, noting that Apple's rewards rate is middle-of-the-road compared with other cards that carry no annual fee.
Most major card issuers have a similar automatic feature to sweep card rewards into personal accounts, including Bank of America, JPMorgan Chase and Citigroup, Riley said.
Despite the news of rising deposits, Goldman is still likely dissatisfied with results of the Apple Card partnership, because of looming credit risks within the portfolio and Goldman's inexperience in consumer credit card underwriting, according to Riley.
"The Apple credit card did not live up to its promise of re-engineering the credit card, and it's unlikely it will fill the goal for [Goldman's] savings products," he said.
Stewart Watterson, a strategic analyst with Datos Insights, said the Apple Card savings account's success is disconnected from the credit card portfolio's performance.
"It's still likely Apple and Goldman Sachs will part ways on the credit card," Watterson said.
