Apple savings account offers 10 times more interest than US average — draws $1B in deposits

Apple’s new high-yield savings account — which is dangling an interest rate that’s 10 times the national average — has been swamped with customers who have deposited a total of $1 billion during the first four days since its launch.

The iPhone maker’s foray into commercial banking has been a successful one, according to Forbes.

The account offers depositors a 4.15% annual return, which far exceeds the less than half a percent that is typically offered by banks.

After just four days, the service, which is only available to holders of Apple’s credit card, Apple Card, numbered 240,000 customers, the magazine reported.

March data from the Federal Deposit Insurance Corporation showed consumers earned an average of 0.37% on savings in bank accounts.

On the day it launched, depositors stashed $400 million into their accounts using the service, which is being offered in partnership with Wall Street investment giant Goldman Sachs.

The Apple rate is higher than the 3.9% Goldman offers for an online savings account at its digital consumer bank, Marcus.

Regional and small banks are competing for deposits by dangling promotions, including higher rates and cash bonuses for opening new accounts.

The moves come after rattled consumers moved billions of dollars to banking giants from smaller lenders in March following the failures of Silicon Valley Bank and Signature Bank.

The banking sector was further rattled on Monday after the FDIC took control of failed lender First Republic Bank and brokered its sale to JPMorgan Chase, which acquired $92 billion in deposits.

Shares of Apple were trading at around 0.5% lower as of 2:21 p.m. Eastern time on Tuesday.

The Apple savings account can be monitored through a dashboard that’s integrated with Apple’s digital wallet.

Before the company rolled out the service, cash rewards were automatically posted into Apple Cash, a prepaid digital card whose annual deposits are worth an estimated $3.8 billion.

Rewards offered up by Apple Cash will now be deposited into the high yield savings account, though holders are not permitted to exceed the $250,000 FDIC insurance threshold.