Cash App competes with Apple with 4.5% APY for savings accounts (with direct deposit)

Apple’s recent move increase interest rates The 4.5% for its Apple Card savings account is now prompting a competitor to do the same. Cash App announced today that it will now offer 4.5% APY (Annual Percentage Yield) for its… cash app savings Customers, with some caveats. While Apple’s savings account requires that customers qualify for the Apple Card credit card, Cash App will cap its higher percentage rate for its cardholders in a different way.

The company says customers must have $300 or more in paycheck direct deposited per month to bump their rate up to 4.5%. This may be more challenging for people who bank elsewhere but use Cash App for peer-to-peer payments or business purchases. But for those new to Cash App, it may prove to be an incentive to use the app as your main account going forward. (Without direct deposit, Cash App’s rate is notably less than 1.5%).

To earn the 4.5% rate, customers must also have a Cash App card, use a personal (not business) account and be at least 18 years old.

Image Credit: cash app

To be competitive with other banks, Cash App offers other features. For example, customers get overdraft coverage of up to $50 on purchases made with their Cash App card, free ATM withdrawals in the network and one free withdrawal per month at any ATM, plus the ability to call customer support from within the app , the company says.

This news is not only another example of how Apple’s entry into the savings market is forcing others to raise rates to compete, but also how pressure from the Federal Reserve to fight consumer inflation. Are benefiting. Banks take their cues from the federal funds rate, which has also been raised,

At launch, Apple Savings Account Arrived with a high APY of 4.15% But Apple increased it Up 4.5% last month, At that time, Apple’s rate was almost 10 times higher than the national average,

Other fintech companies have followed Apple in attracting customers. Another digital banking service, step, increased its rate to 5% For example, after Apple entered the market.