Cash App Heats Savings Game with 4.5% APY, But Watch the Catches!
February 16, 2024 By Raulf Hernes
(Image Credit Google)
Apple faces a challenge from the Cash program, the well-known peer-to-peer payment program, which is giving an astounding 4.5% annual percentage yield (APY) on its savings accounts. This audacious action follows Apple's own recent increase in the interest rate for its Apple Card Savings Account to 4.5%. However, there are a few things to consider before you dash to hide your cash.
Direct Deposit Dilemma: Cash App ties its high annual percentage rate (APY) to monthly direct deposits of $300 or more, in contrast to Apple's requirement of an Apple Card. For people who currently get their paychecks from other banks, this could be a barrier. It is, nevertheless, a very alluring inducement for new Cash App customers who are prepared to make the move.
Beyond the Bonus: There are more benefits besides the 4.5% rate. Cash App offers free ATM withdrawals, in-app customer service, and overdraft protection. Those looking for a convenient and cost-effective banking experience may find these characteristics particularly appealing.
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Apple's Impact: The popularity of Cash App is yet another indication of the fallout from Apple's entry into the savings market. Not only are rivals compelled to hike rates, but the Federal Reserve's efforts to combat inflation are also benefiting consumers. Recall that Apple's initial offer of 4.15% was almost ten times more than the national average!
Stepping Up the Competition: There are more apps pursuing Apple's lead besides Cash App. By providing even greater rates, other fintech companies, such as Step, are expanding the bounds of what is feasible in the savings market. For those who have saved, this is fantastic news because they may now enjoy more attractive returns on their hard-earned money.
The Bottom Line: While Cash App's 4.5% APY is appealing, examine the direct deposit requirement and other account features before switching. It's a perfect time to examine options and pick the account that best suits your requirements and financial goals, especially with the savings race heating up. So, compare prices, pay attention to small print, and watch your savings increase!
