Apple’s savings account debuts in the US. In four days he is on his way to earning the same with it as selling 200,000 iPhones

In mid-April, Apple launched a new financial product, a paid savings account through which it launched a challenge to traditional banking. From this account we knew that it was only going to be available to Apple Card users, in turn somewhat restricted to its customers in the United States; and? was going to offer interest at 4.15% APR (4.07% real interest) with a generous limit of $250,000.

Now we know, thanks to Forbessomething else about her: in her first four days of life she obtained 990 million dollars in deposits, attributing this information to sources close to this service.

That allows us to make some simple rules to know the impact that this product is going to have on Apple’s balance sheet.

5%, 4.15%, commission to Goldman Sachs…

If you have obtained 990 million dollars in your first four days, it is to be expected that this amount will increase significantly over time, but we are going to start the calculations with this amount.

If Apple offers this account with 4.15% annual interest, it is to do business with the excess interest it earns. We can make a conservative calculation if we assume that Apple is “only” achieving the same interest that it marks the federal funds rate in the United States, of 5% according to the latest variation, from March 22, three weeks before this savings account came into effect.

This means that Apple keeps approximately 0.85% of the interest it earns on customer deposits. If we add an additional 20.5% to the 990 million (the amount necessary to go from 4.15% to 5%), we have 1,193 million dollars obtained with those deposits. About 203 million gross profit (to discount operating costs, wholesale commissions and taxes) for Apple. We insist, with the annualized figures of only the first four days of active service.

$203 million is almost a rounding error for a company that invoices almost 400,000 million dollars a year, but its profit margin is presumably higher than that of its hardware (around 39% gross, on 18% net).

And if we compare apples with apples, his thing is to limit the comparison to Apple’s regional revenues in what he calls ‘Americas’ (United States, Canada, Mexico, Central America and South America). In these regions, it totals 170,000 million dollars entered in the last fiscal year, according to its 2022 financial results.

“5% is a reference rate after the auctions, but it is not something automatic, they would have to look for investment options that are as safe as possible for this, and it must be reckoned with that Apple does it through Goldman Sachs, who takes a part of that money, but approximately it serves to give us an idea”, says alejandro grandsoninvestment and finance expert, collaborator in The Salmon Blog and author of the book ‘Investment in times of low interest rates’.

“It must also be taken into account that they are annual interests, and the owners of the deposits would have to keep that money throughout the year to achieve that figure,” adds Alejandro. And he adds an interesting nuance: “Apple and company have not launched banks or investment products like this for this entire decade because the rates were at 0%. The interesting thing during this time was only the payments.” And from there Apple Pay, Google Pay, Amazon Pay… “The rest was very complicated. But now that the rates have risen, we see these types of proposals arrive.”

What is obtained with these cabals of the Apple Card savings account is already on the way to becoming, only with what has been achieved so far, and assuming that the deposits will not be withdrawn before the year that ensures the announced interest, 0.12% of its income throughout America. And despite being a uniquely American product, only for those who already have an Apple credit card, and only in its first four days of life.

To turn these figures around, 203 million dollars are the equivalent of the sale of 203,000 iPhonesaccording to the last average selling price analyst Ming Chi Kuo talked about: between 1,000 and 1,050 dollars. For the calculation we have taken the most conservative figure.

However, it does not seem clear that this business is as scalable as its usual online services. The Apple Card has been almost four years since its debut and still hasn’t left the United States, or even neighboring Canada; so we can sit and wait for these financial services to come to Europe.

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Featured Image | Javier Lacort with Midjourney.