Personal Finance

Savings account wars: Apple ups the ante, paying 4% interest

Apple's announcement has upended the banking industry, whose saving yields are generally far lower.

Savings account wars: Apple ups the ante, paying 4% interest
Jenny Kane / AP

With ongoing recession fears, everyone knows the importance of having money in the bank.

But where you keep your savings is essential, too, because you could now be earning over 4% on that money if you put it in the right place.

And Apple wants your business.

It has just upended the banking industry, launching a new high-yield savings account to compete with national banks.

It allows Apple Card holders to earn a 4.15% annual yield as of mid-April, far above what most bricks and mortar banks are paying on savings.

A growing number of other high-yield online savings accounts now offer competitive rates of 3% or more.

Most savers are not taking advantage

But not everyone is taking advantage of this easy way to grow your savings, according to Greg McBride, chief financial analyst with Bankrate.com.

"There are a plethora of accounts that are available nationwide and have no minimum deposit and no monthly fees," McBride said.

But Bankrate found that:

- Just one in five savers are earning 3% back or more.

- One in six savers report earning no interest whatsoever.

"Leaving that emergency savings sitting in an account that's still earning near zero is a big difference, and it leaves a lot of money on the table," McBride said.

Device showing an Apple savings account summary..

Apple unveils high-yield savings account with 4.15% interest rate

The savings account comes with no fees, no minimum deposits and no minimum balance requirements.

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The national average rate for savings accounts is still less than 1%.

So why have people shied away?

In a Bankrate survey, many customers said they prefer access to a local branch -- even if it pays little to no interest. Others worry about the security of their money, though McBride says those fears are often unfounded.

"Always deal directly with a federally insured financial institution, either a bank or a credit union," McBride said. "And in that case, even if you're interacting with them solely online, they may be located in a different part of the country, but they're regulated just the same as the bank down the street."

Appleā€™s new savings account, offering more than 4% interest, was just launched with Goldman Sachs. It's only available to Apple Card users but has no minimum deposits or balance requirements.

To see if any of these high-yield options are right for you, check out Bankrate's online banking tool.