Apple now has a banking ap that's insured and pays 4.15% interest. Banks look out!

Apple Makes the iPhone a Home for Savings Accounts

Apple Card credit-card holders can open an account with a 4.15% annual percentage yield

The savings accounts are protected by the FDIC.

By Julia Carpenter and Will Feuer, WSJ

Updated April 17, 2023 1:33 pm ET

Apple Inc. AAPL 0.01%increase; green up pointing triangle joined the competition for bank deposits on Monday with the launch of a high-yield savings account that pays an annual percentage yield of 4.15%.

The new accounts, created in partnership with Goldman Sachs, are available in conjunction with Apple Card, the tech company’s credit card.

The savings accounts require no minimum deposit and are protected by the Federal Deposit Insurance Corp. There is a maximum balance of $250,000.

Apple Pay is a dominant competitor in digital payment, but Apple has more competition when it comes to savings accounts.

Money can’t be spent directly from the Apple savings account, but would first need to be transferred to a checking account or Apple Cash.

Though the 4.15% rate is higher than that of the standard savings account, a handful of online banks offer rates as high as 5% APY, according to Bankrate. But popular high-yield savings products from Ally Bank or Goldman’s own Marcus offer lower rates than Apple’s: 3.75% and 3.9%, respectively.

The favorable rate, combined with Apple’s existing brand recognition, could be especially attractive to new customers given concerns about the stability of the banking industry after the collapse of Silicon Valley Bank, said Yiming Ma, assistant professor of finance at Columbia University.

“I think what is special in this case is Apple is Apple,” Prof. Ma said. “Everyone knows what Apple is, and many people already have an Apple Card.”

The partnership between Apple and Goldman Sachs began in August 2019 with the Apple Card.

Write to Julia Carpenter at julia.carpenter@wsj.com and Will Feuer at Will.Feuer@wsj.com