4 ms·

Apple’s 4.15% Savings Account Marks Golden Age of Cash

27 points by csomar 4y ago

ciconia 4y ago
https://archive.ph/lJqN5 https://archive.ph/lJqN5
Temporary_31337 4y ago
Super shallow and confusing article. One of the counter arguments for savings account presented in the article is that it’s “risky” because deposits over 250k are not insured. As we have seen with SVB all deposit holders were bailed out even above that limit and in case of Apple account, the entire Goldman Sachs would have to go bankrupt for a similar situation. I’m curious to see what startups will emerge that will make it more worthwhile (risk/reward) to invest than a stable 4% every year. I think on the broader stock market some staple stocks like food and oil companies are probably going to outperform the savings rate but not without risk.
- uf00lme 4y ago
  Pretty sure the maximum cash allowed in the account is 250k
- alenrozac 4y ago
  Well, the real interest rate is not 4%, but rather about 1% which is around the historic average tbf.
pdc56 4y ago
I vaguely remember _years_ ago, someone, perhaps here on HN but not sure, predicted Apple would become a bank. It seemed insane at the time... from memory it was maybe around 2010 or perhaps earlier. Does that ring any bells for anyone here? Id love to re-read it and know the exact date
- antoinog 4y ago
  https://hn.algolia.com/?dateRange=all&page=3&prefix=false&query=apple%20bank&sort=byDate&type=story https://hn.algolia.com/?dateRange=all&page=3&prefix=false&qu...
- DrStartup 4y ago
  They aren’t a bank. More like a MVNO but instead of being a mobile carrier they are a value added reseller of a real bank (Goldman Sachs).
  - senttoschool 4y ago
    Until they're big enough to start their own banking license...
- lotsofpulp 4y ago
  Why does this move indicate they are closer to being a bank? Also, Apple’s profit margins are already much better than a retail bank’s, so why would Apple want to get into that business and be subject to all that extra bureaucracy?
  - zamnos 4y ago
    As to why, A) given Apple's lawyers, I'm sure they can structure the deal so as to minimize exposure to regulations for the rest of the empire, and B) they like money. Judging from how much of it they have, they really like money. More to the point though, banking sucks - as did smartphones for a lot of reasons before the iPhone, so if Apple thinks they can make a better product for their customers, they totally would. Given their inroads into the space already, it's not that far fetched that they wouldn't need to in order to accomplish their goals, simply by co-opting their current partner, Goldman Sachs, which is a bank. Why this current move moves them closer to being a bank, it means they're now running savings accounts for consumers, which is a very bank-shaped thing to do.
    - lotsofpulp 4y ago
thexumaker 4y ago
wealthfront has 4.3% and 3 mil fdic, way better options available.
- senttoschool 4y ago
  Robinhood is 4.4% an insured by up to $1.5m. But the Apple option is attractive for those who want to trust a bigger name - even though their money is insured.
  - reducesuffering 4y ago
    Robinhood requires a $5/mth subscription for that rate, otherwise 1.5%.
    - senttoschool 4y ago
      Yes, but the assumption is that the $5 is easily compensated by the extra interest.
      - reducesuffering 4y ago
        It was in comparison to Apple's 4.15% and Wealthfront's 4.3%. So that's .1 - .25%. And I think most would argue that, at max, you should have a year's bills in cash. So that's like $30k - $80k. Assuming standard marginal income tax rate of 30%, that extra interest is $30 - $400, so $21 to $280, and Robinhood's $60/yr loss, so -$39 to $220. Maybe kind of worth it at the high end, but I guess I should also then mention that 4mo T-bills pay 5.17%.
  - yunwal 4y ago
    Obviously Apple is a big name, but bigger than the FDIC?
nly 4y ago
More like rusty tin than Gold when inflation is running at 10% YoY
- ofcourseyoudo 4y ago
  Source? As of March 2023 US inflation was 4.99% the lowest its been in almost two years (since May 2021). https://ycharts.com/indicators/us_inflation_rate https://ycharts.com/indicators/us_inflation_rate
  - piepiethesailor 4y ago
    I think 10% refers to the United Kingdom rate of inflation.
  - lockhouse 4y ago
    From your link: “US Inflation Rate is at 4.98%, compared to 6.04% last month and 8.54% last year. This is higher than the long term average of 3.28%.” Inflation was 8.5% last year, but even that is misleading because it is based on a cherry picked basket of goods that does not include things like fuel or housing costs.
jprafael 4y ago
It seems like there are several options for US persons/USD deposits that achieve similar ~4.5% guaranteed returns. Anything similar for EU/EUR deposits? Even services like revolut that operate on the two jurisdictions and offer multiple currency accounts in both, have very different yield rates.

27 points by csomar 4y ago

https://archive.ph/lJqN5 https://archive.ph/lJqN5

Super shallow and confusing article. One of the counter arguments for savings account presented in the article is that it’s “risky” because deposits over 250k are not insured. As we have seen with SVB all deposit holders were bailed out even above that limit and in case of Apple account, the entire Goldman Sachs would have to go bankrupt for a similar situation. I’m curious to see what startups will emerge that will make it more worthwhile (risk/reward) to invest than a stable 4% every year. I think on the broader stock market some staple stocks like food and oil companies are probably going to outperform the savings rate but not without risk.

uf00lme 4y ago
Pretty sure the maximum cash allowed in the account is 250k
alenrozac 4y ago
Well, the real interest rate is not 4%, but rather about 1% which is around the historic average tbf.

pdc56 4y ago

I vaguely remember _years_ ago, someone, perhaps here on HN but not sure, predicted Apple would become a bank. It seemed insane at the time... from memory it was maybe around 2010 or perhaps earlier. Does that ring any bells for anyone here? Id love to re-read it and know the exact date

antoinog 4y ago
https://hn.algolia.com/?dateRange=all&page=3&prefix=false&query=apple%20bank&sort=byDate&type=story https://hn.algolia.com/?dateRange=all&page=3&prefix=false&qu...
DrStartup 4y ago
They aren’t a bank. More like a MVNO but instead of being a mobile carrier they are a value added reseller of a real bank (Goldman Sachs).
- senttoschool 4y ago
  Until they're big enough to start their own banking license...
lotsofpulp 4y ago
Why does this move indicate they are closer to being a bank? Also, Apple’s profit margins are already much better than a retail bank’s, so why would Apple want to get into that business and be subject to all that extra bureaucracy?
- zamnos 4y ago
  As to why, A) given Apple's lawyers, I'm sure they can structure the deal so as to minimize exposure to regulations for the rest of the empire, and B) they like money. Judging from how much of it they have, they really like money. More to the point though, banking sucks - as did smartphones for a lot of reasons before the iPhone, so if Apple thinks they can make a better product for their customers, they totally would. Given their inroads into the space already, it's not that far fetched that they wouldn't need to in order to accomplish their goals, simply by co-opting their current partner, Goldman Sachs, which is a bank. Why this current move moves them closer to being a bank, it means they're now running savings accounts for consumers, which is a very bank-shaped thing to do.
  - lotsofpulp 4y ago

thexumaker 4y ago

wealthfront has 4.3% and 3 mil fdic, way better options available.

senttoschool 4y ago
Robinhood is 4.4% an insured by up to $1.5m. But the Apple option is attractive for those who want to trust a bigger name - even though their money is insured.
- reducesuffering 4y ago
  Robinhood requires a $5/mth subscription for that rate, otherwise 1.5%.
  - senttoschool 4y ago
    Yes, but the assumption is that the $5 is easily compensated by the extra interest.
    - reducesuffering 4y ago
      It was in comparison to Apple's 4.15% and Wealthfront's 4.3%. So that's .1 - .25%. And I think most would argue that, at max, you should have a year's bills in cash. So that's like $30k - $80k. Assuming standard marginal income tax rate of 30%, that extra interest is $30 - $400, so $21 to $280, and Robinhood's $60/yr loss, so -$39 to $220. Maybe kind of worth it at the high end, but I guess I should also then mention that 4mo T-bills pay 5.17%.
- yunwal 4y ago
  Obviously Apple is a big name, but bigger than the FDIC?

nly 4y ago

More like rusty tin than Gold when inflation is running at 10% YoY

ofcourseyoudo 4y ago
Source? As of March 2023 US inflation was 4.99% the lowest its been in almost two years (since May 2021). https://ycharts.com/indicators/us_inflation_rate https://ycharts.com/indicators/us_inflation_rate
- piepiethesailor 4y ago
  I think 10% refers to the United Kingdom rate of inflation.
- lockhouse 4y ago
  From your link: “US Inflation Rate is at 4.98%, compared to 6.04% last month and 8.54% last year. This is higher than the long term average of 3.28%.” Inflation was 8.5% last year, but even that is misleading because it is based on a cherry picked basket of goods that does not include things like fuel or housing costs.

jprafael 4y ago

It seems like there are several options for US persons/USD deposits that achieve similar ~4.5% guaranteed returns. Anything similar for EU/EUR deposits? Even services like revolut that operate on the two jurisdictions and offer multiple currency accounts in both, have very different yield rates.