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So the more I use the Apple Card, pay it off in full. The more GS is in the hole? Also an additional fu if I deposit more money into the savings account since

by xyst 3y ago

So the more I use the Apple Card, pay it off in full. The more GS is in the hole? Also an additional fu if I deposit more money into the savings account since they have to invest that money to guarantee the interest rate. Lol I love it. The savings account is offering 4.15% right now. Might move $10K into account just as a small fu to the GS executives.

xyzelement 3y ago
In my experience, giving a company more business (not to mention, straight up cash!) is seldom an FU :) The above article is kinda slim on why this is bad for GS but the sense that I got from clicking one link down is that the concrete thing is their 'platform' business has not recouped its investment. As in, they paid a bunch of people, paid for a bunch of integrations, etc and aren't generating sufficient offsetting revenue. Given how cards and accounts work, I suspect the incremental margin on a given CUSTOMER is positive. So yes, I think they would be happy to get the merchant fees off of your increased Credit Card spending and to enjoy the spread between your 4.15% and whatever they invest in which presumably pays more.
- datavirtue 3y ago
  Hopefully it's invested in some type of insurance company, and in that case the spread is likely 1%. I would think the investment would have to be a guaranteed return.
  - xyzelement 3y ago
    Not sure why that's "hopefully" - if you like getting the rate GS pays you, you want it to be sustainable for them and therefore for you. In practice - I forget the details - but it works in the other direction. The bank sets the rate it pays YOU based on a combination of what it can make elsewhere and how badly they want to get your money to fund that investment. Unless GS is somehow forced by their deal with Apple to pay out more than they can make (I see no evidence of that in the article) you'd expect this is how they operate.
jrockway 3y ago
I don't think it's an FU to them. You can get a much better rate than 4.15% right now, which means they are just using your money to buy those things to the maximum extent possible. Shop around. If you don't want to deal with some random bank and their crazy password requirements, you can probably buy CDs through your ordinary brokerage account. Finally, if you want to FU a bank, depositing your money there isn't the best way to do that. Start spreading rumors that Apple Card savings is about to be insolvent and get everyone to withdraw their money. That they hate. Ask Silicon Valley Bank.
- KMag 3y ago
  > Start spreading rumors that Apple Card savings is about to be insolvent and get everyone to withdraw their money. That they hate. Ask Silicon Valley Bank. You haven't stated, but seem to imply that the stated rumors would not be founded at the time they start being spread. I'm not a lawyer, but spreading unfounded rumors for any purpose (much less with the intent to cause financial harm) seems unwise. Disclaimer: left Goldman a couple years ago. My GS holdings are a rounding error in my portfolio.
Kirby64 3y ago
Weirdly, their standalone savings offering through Marcus is offering 4.40%. I don't know why the Apple Savings is not competitive. When Apple Savings was first released it was slightly higher than Marcus (for about a month, then Marcus changed to match).
icedistilled 3y ago
Goldman sach's other savings account, Marcus by goldman sachs gives you 4.40% right now. Depending on the deal with apple, the 4.15% through apple could be worse for GS, but it would also be worse for you. (Not to mention, treasuries are over 5% and don't incur state income tax)

by xyst 3y ago

xyzelement 3y ago

In my experience, giving a company more business (not to mention, straight up cash!) is seldom an FU :) The above article is kinda slim on why this is bad for GS but the sense that I got from clicking one link down is that the concrete thing is their 'platform' business has not recouped its investment. As in, they paid a bunch of people, paid for a bunch of integrations, etc and aren't generating sufficient offsetting revenue. Given how cards and accounts work, I suspect the incremental margin on a given CUSTOMER is positive. So yes, I think they would be happy to get the merchant fees off of your increased Credit Card spending and to enjoy the spread between your 4.15% and whatever they invest in which presumably pays more.

datavirtue 3y ago
Hopefully it's invested in some type of insurance company, and in that case the spread is likely 1%. I would think the investment would have to be a guaranteed return.
- xyzelement 3y ago
  Not sure why that's "hopefully" - if you like getting the rate GS pays you, you want it to be sustainable for them and therefore for you. In practice - I forget the details - but it works in the other direction. The bank sets the rate it pays YOU based on a combination of what it can make elsewhere and how badly they want to get your money to fund that investment. Unless GS is somehow forced by their deal with Apple to pay out more than they can make (I see no evidence of that in the article) you'd expect this is how they operate.

jrockway 3y ago

I don't think it's an FU to them. You can get a much better rate than 4.15% right now, which means they are just using your money to buy those things to the maximum extent possible. Shop around. If you don't want to deal with some random bank and their crazy password requirements, you can probably buy CDs through your ordinary brokerage account. Finally, if you want to FU a bank, depositing your money there isn't the best way to do that. Start spreading rumors that Apple Card savings is about to be insolvent and get everyone to withdraw their money. That they hate. Ask Silicon Valley Bank.

KMag 3y ago
> Start spreading rumors that Apple Card savings is about to be insolvent and get everyone to withdraw their money. That they hate. Ask Silicon Valley Bank. You haven't stated, but seem to imply that the stated rumors would not be founded at the time they start being spread. I'm not a lawyer, but spreading unfounded rumors for any purpose (much less with the intent to cause financial harm) seems unwise. Disclaimer: left Goldman a couple years ago. My GS holdings are a rounding error in my portfolio.

Kirby64 3y ago

Weirdly, their standalone savings offering through Marcus is offering 4.40%. I don't know why the Apple Savings is not competitive. When Apple Savings was first released it was slightly higher than Marcus (for about a month, then Marcus changed to match).

icedistilled 3y ago

Goldman sach's other savings account, Marcus by goldman sachs gives you 4.40% right now. Depending on the deal with apple, the 4.15% through apple could be worse for GS, but it would also be worse for you. (Not to mention, treasuries are over 5% and don't incur state income tax)