Apple's New 4.15% APY Savings Accounts Reached $1 Billion In Days

Apple has recently announced new Apple Card Savings accounts. It only took four days for attract $1 billion dollars by offering only 4.15% APY returns. Compared to what banks have been offering in recent years, 4.15% APY is a better deal. That is probably because Fed has been raising interest rates, and banks as well started offering higher interest returns for money held in savings. Apple is not a bank. However, it has partnered with an investment bank, Goldman Sachs in this endeavor. While Apple is a successful company, its expertise is not in banking, although it has been interested in getting into money business. It is one of the most successful tech companies and innovators. People may have lost trust in banks, but Apple they trust do. I can see how this partnership with Goldman Sachs can be mutually beneficial.

One of Apple smart business decisions that guided the company, especially when Steve Jobs was running it, has been focusing on what they are good at, and not getting distracting with ambitious goals that they had no expertise, experience and know-how in. Even when Apple was disappointed at Google when it started competing against Apple's iOS with Android, and the drama became public, Apple did not get involved in "search" business. Apple is a software company. They could have explored "search" as well. But they didn't. Because they knew it wasn't their strength. We can see how distraction can produce not desired outcomes. For example, when Apple decided to get into maps instead of just using Google maps, it failed miserably. Apple maps launch was a disaster. It may have improved now. But it was one of the products they launched that wasn't ready for the end user. But maps was more of a necessity for Apple, rather than a desire to capture a market share. Nobody uses Apple maps on non-iOS devices. There is no need for it. Even Apple users probably don't use Apple maps.

The point I am trying to make is that Apple has been slowly pivoting away from its original vision of focusing on what they do best, innovate in computing technologies, both hardware and software. It may be a good strategy or not so good one. But they definitely can afford trying new ideas and experiments. Not one, but many. They have a lot of cash, that they have no idea what to do with. One thing they can and probably do is keeping in savings and earn interests. If it works for them, it probably would work for Apple user-base as well, right? If Apple puts its mind into something they can instantly be somewhat successful because of the brand and reputation they have built. But more importantly because of loyal customer-base they have. Offering interest for money in savings is definitely not an innovation. Not by itself. Since mobile phone are replacing wallets, it does make sense to for Apple to be involved in money too.

In fact, Apple has already been involved in money and payments business, when they introduced Apple Pay and made it possible for iPhone users to pay with their phone in the stores. This was an immediate success, because many store chains partnered with Apple. Why wouldn't they? Then Apple continued improving its wallet app and offering different features like paying for online transactions, storing other cards in the wallet, etc. It definitely was a technology move. Even now when purchasing Apple products they offer credit cards with no interest for 2 years, and this strategy helped them to sell more devices. Since Apple devices kept becoming more expensive with not much of features added with consecutive iterations, people weren't upgrading their iPhones and iDevices as often as they used to in the past. Offering trade-in old devices in combination with no interest payments plan helped them solve that issue.

Back to the main topic. 4.15% APY returns on Savings may seem interesting for many. Apple just proved there is demand for it. $400 million deposited in the first day, and now it is $1 billion and continues to grow. While Apple may not be a bank, just this fact alone is showing the transformation of money from traditional banking into technology has already been happening. The future of the money is in technology. I mean it is the present. Physical credit/debit cards will soon become obsolete. If our wallets live in our smartphones or other devices, it makes sense for a technology company to be involved in money. Creating software for wallets, offering payments is one way to be involved. But eventually there will be demand for more financial services. By slowly removing all need for traditional systems, tech solutions will become dominant players in money. And some of these transformations were a necessity. Amazon had to become a payments processor to create a smooth experience for both merchants and buyers on its platform.

Money and technology together makes sense. Especially for those who understand bitcoin and crypto. It is amazing how crypto technologies advanced in such a short period of time, and have proven how money can be better. Much better. Traditional finance is stuck in the past. The only counter to crypto they have is CBDC. If there was an option between stable-coin and CBDC, the benefits of stable-coins are better than what CBDC offers. Fiat is not changing. What Apple is trying to do is utilize its technology network and transform it into a money network, but still using fiat. Now, most of us can easily see the potential role Apple could play in the real monetary innovation that is bitcoin and crypto. However, Apple has already decided that it is not going get involved in bitcoin or any other crypto. This may become the biggest mistake they will ever make. The train has not left yet. There is still time for Apple to reconsider its position. Apple is know to be a long game company with vision long into the future. For some reason they are blind to the monetary future.

There are benefits for offering fiat utilization in the wallet, no doubt. However, the true potential of their technology is in decentralized money. They don't even have to be invested or involved in bitcoin itself. But they can create a crypto friendly ecosystem and they can build the wallets. There are many things they can do. For now the best the can come up with is offering 4.15% APY for fiat savings. As Hive people know Hive Dollars does a lot better than that, Hive Dollars in Savings earn 20%. Yes, this may change in the near future, but even that change probably wouldn't drop to 4.15% levels. Maybe 15% or 10%. That is if there were risks involved in keeping 20%. Some people think 20% interest is not sustainable. This topic has been discussed before, and there are many good arguments in support of 20% and how sustainable it can be. The simple answer to why 20% is really not a threat, but a good thing is that most of the Hive stakeholders are of firm belief that Hive coins are undervalued. That's why we see same long time whales, orcas, dolphins holding their Hive for a very long time, and they aren't parting ways in near future either. Because market has not offered a price for Hive that we would want to sell at.

Imagine if I think the real value of Hive in USD is 10x, and that is being conservative. That means Hive's price now would be around $4. But it also means the 20% interest paid for HBD in savings is only 2% of Hive real value. Ultimately, it is the Hive stakeholders who decide what percent is APR and if it is paid at all. Stakeholders are also the ones who paid the bill. These interest payments have a potential to devalue and dilute the HP and Hive's value. But most don't really see it that way, because HBD offers great use cases, and it's time to shine has yet to arrive. For now we can be happy with how well it works, and it keeps getting stronger and more reliable over time.

Let me suggest an idea that will never happen. Imagine Apple knows about HBD's 20% interest, and Apple is interested in building a money network. Even with offering 4.15% Apple doesn't lose money, it just offers what the bank can pay. Combining the both ideas, Apple could easily integrate Hive Dollars into its system and offers its customer-base much higher interest returns, all while implementing a technological innovation into their tech network. Are there risk? There are always risks, but I am sure Apple could assign a competent team that would assess all potential risks and come up with the best implementation. The problem is there is no billion dollars worth of HBD in circulations, and Apple will probably attract tens of billions in the months to come with their 4.15% APY. The only way to obtain HBD in billions and tens of billions is by buying Hive and converting Hive into HBD. How high do you think Hive's price would go? It would go so high that paying 20% interest on HBD wouldn't be significant at all. Now the best thing about Apple project is that, people wouldn't be exchanging their cash to HBD just to earn 20% (some will), but the utilization of its other features like transparency, ownership of wallets, and fast, free, secure transfers will keep them within the network. Ok, this is not happening of course. It may not happen with Apple, but it is certainly a possibility with other companies or people who share the vision of technological money.

It is impressive how Apple is able to attract massive amounts of funds by offering low APY. This shows the demand for passive income for savings. Sooner or later this demand may realize that Hive Dollars can offer much better return and a lot better money tools.