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

"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.


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.