A Slightly Improved Rate for Apple Card Savings

For the first time since launching the Apple Card Savings account, Apple (AAPL) has raised the rate you can earn on your cash balance. Originally unveiled last April with a rate of 4.15% APY, Apple bumped that return up to 4.25% APY just before Christmas. Apple Card Savings charges no monthly fees and has no minimum required balance, but it is only available to those who have an Apple credit card.

While an interest rate boost is welcome, Apple has lagged the growth in rates that other high-yield savings accounts have seen as a result of the Federal Reserve's aggressive interest rate hikes. When Apple Card Savings kicked off last spring, the top nationally available rate on a high-yield savings account was 5.02% APY. Today the leading rate is almost a half percentage point higher at 5.50% APY. Meanwhile, Apple has increased its rate just a tenth of a point.

Higher-Paying Options Will Put More Money in Your Pocket

We track the best high-yield savings accounts every business day, and our daily ranking currently includes 15 options that pay 5.25% APY or more. That's at least one percentage point higher than Apple's rate. And you can outperform Apple Card Savings even more by choosing the highest nationwide rate of 5.50% APY.

Another high-earning option for your stashed cash is a money market account. Though not currently paying quite as much as the best high-yield savings account, the leader at the top of our best money market account rankings is paying 5.35%.

Today's interest rates are are historic highs thanks to the Federal Reserve and its aggressive campaign to combat decades-high inflation. Between March 2022 and July 2023, the Fed raised the federal funds rate 11 times for a cumulative increase of 5.25%—taking the benchmark rate to its highest level since 2001. Because banks and credit unions base their interest rate decisions on the fed funds rate, the Fed surge has caused savings account, money market account, and certificate of deposit rates to skyrocket as well.

Is Apple Card Savings a Smart Choice?

Though it's nice to see Apple raising its interest rate a bit, it's simple math that you can earn substantially more interest with a high-yield savings or money market account paying 5% or better. So mathematically speaking, you'd be better served moving at least some of your cash into a high-paying savings account elsewhere.

But strict dollars and cents is just one way to look at it. Since our lives are busy, convenience is also valuable. If you already hold an Apple credit card and find Apple Card Savings to be immensely easy and seamless, then perhaps it's worth the loss of a percentage point or more in interest every month.

It also depends on how much you hold in savings. Someone with just a $1,000 balance may only be missing out on $10 a year in lost interest by sticking with Apple. But if you have $25,000 in savings, the amount you're leaving on the table is $250 or more.

Where Are Savings Account Rates Headed?

As for what we can expect for savings account rates going forward—from Apple or other institutions—it's likely that savings account rates will stay roughly where they are until it becomes clear the Fed is ready to begin reducing rates. While 80% of Fed committee members signaled in mid-December that they expect to implement two to four rate decreases in 2024, it's unknown when the first of these rate drops will actually take place. So until that uncertainty clears up, savings account rates are likely to continue at their plateaued level.

Just remember: Rates on savings and money market accounts are variable, meaning the bank or credit union is free to change the rate at any time, and it does not need to give you advance notice. If the Federal Reserve begins a series of rate decreases over the next two to three years, you can expect savings and money market rates to drop off significantly as well.

For money you can live without for awhile, you can avoid this variability by locking in one of today's historic rates for a year or more down the road. Our daily ranking of the best nationwide CDs gives you dozens of stellar options.

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.