Last week Apple effectively dropped the mic on the nation’s banking industry. While the average bank is paying less than a half a percent on savings accounts, the $2.6 trillion technology company announced it would be offering\u00a04.15% annual returns<\/a>\u00a0to savers \u2013 no minimums, no lockups and FDIC-insured. The new product rollout comes at a time when regional banks are scrambling in the wake of the Silicon Valley Bank crisis to maintain their deposit bases, and cash-starved fintech startups are likewise\u00a0struggling<\/a>.<\/p>\n\n\n\n Technically Apple doesn\u2019t have a banking license. It is fronting for Goldman Sachs Bank USA, otherwise known as Marcus, which has a state charter and is FDIC-insured. In fintech parlance, Apple is a neobank like Chime, Revolut and Monzo \u2013 except its brand strength is unparalleled given that there are more than two billion iPhones globally, now serving as Goldman\u2019s branch network.<\/p>\n\n\n\n According to polling company Gallup\u2019s annual \u201cConfidence in Institutions\u201d survey, last year, prior to SVB, only 27% of Americans reported to have a \u201cgreat deal or quite a lot\u201d of confidence in their banks. That number is down from its peak of 60% in 1979. By contrast, Apple landed in the top spot for the tenth consecutive year in 2022 according to Interbrand\u2019s annual Global Best Brands ranking. The only bank to make the top 25 was JPMorgan, ranked at 24, just ahead of YouTube.<\/p>\n\n\n\n \u201cApple goes at warp speed and a lot of banks are driving 45 mph in the right lane,\u201d says Wedbush Securities analyst Dan Ives.<\/p>\n\n\n\n The new high yield savings account is only available to customers with Apple\u2019s credit card, Apple Card. These users can have an account set-up in minutes and their spend rewards, called daily cash, are automatically funneled into the high yield account. The account will be displayed on a dashboard in Apple\u2019s digital wallet where users can track their balance and interest earned. The product allows Apple to offer yet another sticky iPhone benefit by strengthening its built-in digital wallet.<\/p>\n\n\n\n \u201cIt’s really a flywheel of keeping everything in the ecosystem,\u201d says David Donovon, executive vice president of financial services for consulting firm Publicis Sapient.<\/p>\n\n\n\n