Cash App is best known as a simple way to send and recieve money on phones, but it also has some attached banking services, like a debit card. Cash App just updated its connected savings account with a 4.5% interest rate—the same as Apple Card’s savings account.
Cash App Savingsis an FDIC-insured savings account, with no hidden fees or minimum account requirements. The annual percentage yield, or APY, has now been updated to 4.5%. That means money in the savings account will earn interest at the same rate as the Apple Card savings account (whichstarted at 4.15%but iscurrently 4.5%). It’s also close to some other competing savings accounts, such asSoFi with its 4.6% APY, and much higher than the interest rates at most big banks. Notably, the savings account is accessible through the regular Cash App on both iPhone and Android, and isn’t limited to iPhones like the Apple Card savings account.
There are a few requirements before you’re able to start accumulating money, though. You need toorder a Cash App Card, then set up direct deposit to put at least $300 in paychecks each month to unlock the 4.5% APY. That higher interest rate will remain as long as the direct deposits continue each month, otherwise it will drop to the standard 1.5% APY. That’s similar to how the savings accounts at SoFi and other fintech banks work—it’s easier to sell you on other financial products (Cash App has stock trading, for example) when you use it as your primary bank with direct deposit for paychecks.
Apple’s high interest rate savings account has helped spur competition, though we still don’t know what the future holds for the Apple Card ecosystem. Apple’s primary banking partner, Goldman Sachs, hasreportedly been trying to break awaybecause the Apple Card isn’t profitable enough. The money in those accounts are insured by the FDIC, so that’s not as risk of vanishing suddenly, but customers could eventually be migrated to other banks or updated with a lower APY.
The interest rate for all savings accounts is also patially based on theFederal Reserve’s funds rate, which is expected to start dropping in 2024, so all these accounts might have lower interest rates in a year from now. For the moment, though, it’s great to see another option for savings account with a high interest rate.
