A silver lining to banking w/ First Republic is, I’ve learned I should not take various banks “money savings management” as gospel truth
After First Republic, people are waking up to where they should really be parking cash
Apple’s new 4.15% savings account, which according to Forbes attracted nearly $1 billion in its first four days despite being open only to Apple credit card holders, is a sign that Americans are finally waking up to the fact that they can earn a lot more on their cash than what the big banks are paying.
Another sign: After soaring in 2020 and 2021, U.S. bank deposits began falling in April 2022, shortly after the Federal Reserve launched the first of 10 consecutive rate hikes. They took an even sharper tumble following the failures of Silicon Valley, Signature and First Republic banks.
Savers have been flocking to better-paying alternatives such as money market funds, which are yielding up to 5%, Treasury bills and the government’s inflation-linked savings bonds.
Some online and lesser-known banks and credit unions have been attracting customers with high-yield savings accounts — at least 30 are yielding more than Apple’s 4.15% according to Depositaccounts.com, a banking research website. By comparison, Wells Fargo, Citi, Bank of America and Chase are paying between 0.01% and 0.35% on their basic savings accounts.
The Federal Reserve raised the short-term federal funds rate on Wednesday by a quarter point to between 5% and 5.25%, a 16-year high.
Although it’s pretty easy to earn more than 4% with almost no risk these days, a recent Bankrate survey found that only 22% of savers are earning 3% or more.
Bottom line if you’re keeping less than $250,000 in AppleSavings, the only risk is opportunity cost and inflation,… AND is much better than just letting money sit in brick and mortar bank account like in Chase or First Republic
Said another way you cannot lose money using non traditional investment vehicles like AppleSavings unless there’s a way bigger crisis happening that probably makes those dollars in a traditional bank worthless anyways (like a complete collapse of the US government).
(Looking at the big picture) as I read the tea leaves, seems Apple is putting together necessary hardware/software for a rival “credit card” payment network based on iPhone technology that will take on the traditional big four networks of American Express, Discover, Mastercard and Visa
