Why Apple's new savings account is attracting users
In April, tech giant Apple announced the opening of a new savings account for users. The features - and interest rate - were instantly appealing. The account has a 4.15% annual percentage yield (APY) and no fees. It doesn't have any minimum deposit or balance requirements, either, making it a smart place to protect and grow your savings.
Many people were attracted to the account. Forbes reported this week that nearly $1 billion in deposits were made in just the first four days the account was available. It's easy to understand why it's been a big hit. In today's inflationary environment with high interest rates and prohibitive costs, many Americans are looking for any edge they can get. Savings accounts - particularly high-yield savings accounts - are a smart and reliable resource.
That said, while Apple's new account has multiple benefits, there are a variety of accounts on the market worth considering, some of which may have even higher interest rates.
Explore high-yield savings account options here now to see how much more you could be earning.
Why high-yield savings accounts are attracting users now
There are multiple reasons high-yield savings accounts like Apple's are attracting depositors now. Here are three to know:
Higher interest rates
The obvious appeal of high-yield savings accounts is in the name: the high yield they can earn each year. Interest rates on traditional savings accounts are currently around 0.39%, according to the FDIC. By leaving your money in these accounts at that rate, you're essentially losing money. Meanwhile, interest rates on high-yield savings accounts are near the 4.15% Apple is offering - and, in many cases, they can be even higher, particularly if you choose an online bank.
Still not sure if it's worth moving your money into one of these accounts? Do the math and see. Let's say you have $5,000 to deposit. If you put it in a regular account, you'll have $5,019.50 after one year. But if you move into a high-yield account using the Apple APY as an example, you'll have $5,207.50 after that same year. And that's at the 4.15% rate. You may be able to find even higher interest rates here now.
They're flexible
High-yield savings accounts work similarly to regular savings accounts. That means all of the flexibility you're used to having with a regular savings account - deposits, withdrawals, cash access, etc. - are the same, but you'll be earning more interest in the background. Many banks and lending institutions even issue you an ATM card to access your high-yield account.
Just make sure you're aware of any withdrawal limits or balance requirements so you don't get penalized, which can eat into any interest you may have earned.
Rates could change
Unlike certificates of deposit (CD), rates on high-yield savings accounts are adjustable and can change based on any number of factors. The rate you get for opening an account this week may be lower next week or be higher the week after. So it makes sense to take advantage when rates are high.
It wasn't that long ago (2020, to be precise) when rates on high-yield accounts were just 0.5%. While it's unlikely they'll drop that low again in the short term, no one really knows for sure. The rate market is unpredictable. It's advisable to act now and start earning interest at these high rates.
If rates go even higher, you'll earn even more, but if they drop, you'll have at least earned some extra money when the environment was favorable. And you'll never lose anything from your principle (unless you make withdrawals for other reasons).
Explore your high-yield savings account options here now to get started.
The bottom line
Apple's new savings account has highlighted what many Americans already knew: Now is a great time to open a high-yield savings account. These accounts have exponentially higher interest rates than traditional savings accounts while incorporating the same flexibility. But rates could change, either negatively or positively, making now the right time to act to start earning more money.
