After Apple raised its Apple Card Savings Account interest rate to 4.5%, a rival followed suit. Today, Cash App Savings clients may now earn “up to” 4.5% APY, with certain restrictions. Cash App limits its high percentage rate to cardholders, unlike Apple’s Savings account, which needs an Apple Card credit card.
The business claims clients must direct deposit $300 or more each month in paychecks to reach 4.5%. This may be harder for folks who bank elsewhere yet use the Cash App for peer-to-peer or commercial transactions. However, it may encourage Cash App newcomers to utilize the app as their primary account. Cash App’s (1.5%) APR without direct deposit is less impressive.
Customers must be 18 years old, hold a Cash App Card, and use a personal account to get the 4.5% rate.
Cash App gives extras to compete with other banks. The business claims Cash App Card clients receive overdraft coverage of up to $50, free in-network ATM withdrawals and one free ATM withdrawal per month at any ATM, and the ability to call customer service via the app.
The announcement shows how Apple’s entrance into the savings market is causing competitors to hike rates to compete and how consumers are benefiting from the Fed’s inflation war. Banks follow the higher federal funds rate.
Apple increased the Apple Savings Account’s APY to 4.5% last month from 4.15% at launch. Apple’s rate was roughly 10 times the national average.
Other fintechs have adopted Apple’s customer-attracting strategy. Step, another digital banking service, hiked its fee to 5% when Apple entered the market.
Cash App competes with Apple with 4.5% APY for direct-deposited savings accounts.
