[HN Gopher] People Put Nearly $1B into Apple Savings Accounts in...
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People Put Nearly $1B into Apple Savings Accounts in First 4 Days
Author : ourmandave
Score : 27 points
Date : 2023-05-01 19:34 UTC (3 hours ago)
(HTM) web link (gizmodo.com)
(TXT) w3m dump (gizmodo.com)
| 0zemp2c wrote:
| for people who just want a place to dump their paychecks and have
| a credit card attached, this looks like a win
|
| the bar is set pretty low right now, maybe people are just better
| off running daily expenses through a stable company that isn't a
| traditional bank
| bsder wrote:
| I always wondered what would finally take down Apple. Now we
| know it will be a financial arm.
|
| Every normal company that gets into finance eventually pays the
| price. At some point, that nice, profitable finanical arm will
| go into distress and the company will attempt to bail it out
| with funds from other arms. This cycle will repeat until it
| either kills the company or the financial arm after it has
| sucked down more money than you can imagine.
|
| Westinghouse and GE are more recent ones, but the list goes
| much further back.
| Spivak wrote:
| I think the fact that these are really Goldman Sachs accounts
| probably buys them some stability.
| wallstprog wrote:
| Maybe, but the actual "bank" in this arrangement is Goldman
| Sachs, and they are one of the more established players in
| finance.
| JumpCrisscross wrote:
| > _the actual "bank" in this arrangement is Goldman Sachs,
| and they are one of the more established players in
| finance_
|
| Cupertino is also hosing Goldman in this relationship [1].
|
| [1] https://9to5mac.com/2023/02/16/apple-card-future-
| goldmans-sa...
| shagie wrote:
| That needs to be put into context of the cost to acquire
| a customer.
| https://en.wikipedia.org/wiki/Customer_acquisition_cost
|
| Various sources:
|
| $80 https://askwonder.com/research/average-customer-
| acquisition-...
|
| > The short version is that it costs around $80 to
| acquire a customer who returns about $120 in profit.
|
| https://medium.com/unifimoney/changing-the-vicious-cycle-
| of-...
|
| > It costs on average around $200 to acquire a credit
| card customer in the US (up to and beyond $1,000 if they
| are affluent cards like MasterCard World Elite and Visa
| Infinite).
|
| https://runningwithmiles.boardingarea.com/apple-card-
| custome...
|
| > The Apple Card doesn't need any affiliates or marketing
| yet analysts say that this new card has a customer
| acquisition cost of $350 and will take several years for
| Goldman Sachs to turn a profit on it.
|
| ---
|
| So the corresponding part of that is "we spent a lot to
| get a lot of customers. If they remain loyal, then GS
| will have something quite profitable for a long time."
| Spending $350 per customer is more than the $200
| mentioned... but also much less than the $1000 for high
| end cards (and the tales of Chase Sapphire Reserve).
| JohnFen wrote:
| Has anyone here done this? I'm curious about why. What's the draw
| for you?
| norgie wrote:
| I haven't, but I'm guessing the interest rate (4.15%) on its
| own is a big draw
| Our_Benefactors wrote:
| It's this. The biggest limitation I saw was that you can only
| transfer out $20k per 7 days, no wire transfers.
| overtfuture wrote:
| I signed up, and it's mostly the rate and the ease to have
| rewards just deposited right into the account. The daily cash
| account seemed to always be used to pay off the Apple Card so
| it's nice to have something where the money just accumulates.
| gumby wrote:
| I have read up on it but I don't get the appeal (i.e. what the
| benefits are).
|
| My US bank allows me to write checks (I don't actually have a
| checkbook, but I use bill pay which it will do electronically if
| it can and by issuing a paper check if not) and make various
| transfers, like Zelle. This has comparatively very limited
| payment capability. How would you pay your mortgage? There are
| even very strict restrictions on moving your cash out!
|
| It does have a higher interest rate than some banks, at least at
| the moment, but you can get these rates from competitors without
| the other limitations.
|
| In general all the current Apple banking offers (apple card,
| apple cash, apple savings account) seem pretty meh, and
| definitely far from great, much less "insanely great". The only
| Apple financial product I consider even worth remembering was
| financing your mac purchase back in 1984.
|
| It's also a weird space for Apple to get into: it's highly
| regulated, has limited (at best) connection/leverage/flywheel
| with the rest of their product line or company capability, and
| doesn't even use anything apple-specific (not even their enormous
| cash horde).
| r00fus wrote:
| FYI Apple Card / Apple Savings are run by Goldman Sachs &
| Apple. So I'm guessing they found some value in this operation.
|
| I agree its offering is very mid (just like Apple Card) so I
| don't use it but for some opening a new account elsewhere is
| challenging.
| gumby wrote:
| Goldman's recent earnings report said they were taking a bath
| on their foray into the consumer sector, having lost $3B in
| the process, with a half a billion on consumer loans alone.*
| I don't imagine they'd be doing the Apple bank account if
| they weren't contractually obligated. Or maybe they just
| think there's a hope for some Apple pixie dust.
|
| * https://www.nytimes.com/2023/04/18/business/goldman-
| sachs-1q...
| blinded wrote:
| put 100k at 4% vs what a savings account at a bank gives you
| thats a grocery bill a month in profit.
| dustincoates wrote:
| But why would you put $100k in savings? There are so many
| better places that are going to get you more than a monthly
| grocery bill over time.
| gedy wrote:
| And not lose money unpredictably? Do tell. (I realize 4% is
| less than inflation)
| gumby wrote:
| Money market
| GreedClarifies wrote:
| Looks like vanguard (vmfxx) is offering 4.78 and apple is
| offering 4.15. That's about 60 bps, it's not world
| changing, but vmfxx is a better deal but it may be a
| little more cumbersome for some.
| gedy wrote:
| Are the rates much higher? Didn't seem so at the online
| banks.
| gumby wrote:
| First think I looked at was vio, more than 50 bps higher.
| blinded wrote:
| Any docs or how-tos youd recommend?
| frumper wrote:
| If you're looking to use that 100k soon, maybe for a new
| house, or saving to start a business, then you want very
| safe and liquid options. 4% is close enough to other safe
| options that if it's easy then that's good enough for some
| people.
| gumby wrote:
| Money market is completely liquid.
| fckgw wrote:
| I have an Apple card. I had a few hundred bucks in Apple Cash I
| earned from cash back just sitting there doing nothing so I
| swept it off into Apple Savings so sit there and do nothing but
| at least earn a little interest on it.
|
| I'd imagine the majority of the new accounts have done this as
| well. It's a secondary, not primary, banking account.
| aeadio wrote:
| Were you not aware you could transfer that cash to a normal
| checking account?
| catchnear4321 wrote:
| What normal checking account pays those rates?
|
| Sure, you could then bounce it to a savings account that
| pays those rates, or better. The rate isn't everything.
|
| Apple created a very friendly path of least resistance.
| [deleted]
| fakedang wrote:
| Apple's value add is like Vercel's value add (drawing from the
| other thread on the front page) - user experience for people
| who can't be bothered to deal with all the hard bad stuff. It
| will work up to a certain limit, but once you want the
| slightest of extra features, you're going to land in a tough
| spot.
| blinded wrote:
| I put my emergency fund + some in betterment with the same
| savings rate years ago. It does pay off. Smart of apple to do
| this.
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