Apple appears to have been pushed aside after Step, a digital banking service aimed at young adults and teens, offered a 5% reward on savings accounts, propelling the bank to the top of the list for the highest interest rate.
This announcement follows Apple’s 4.15% interest-bearing savings account introduction by nearly a month.
Top of the Competition
In a groundbreaking move, fintech company Step has shaken up the financial industry by launching a savings account with an incredible 5% earning rate, outperforming even tech giant Apple.
According to the announcement, customers can now earn this interest on their savings balances of up to $250,000 if they have a qualifying monthly direct deposit.
This comes about a month after Apple introduced a 4.15% savings account balance.
Apple has long been moving towards fintech, banking, and everything in between. And here's another powerful step towards developing their financial brand: now, when you open a Savings Account (deposit), Apple offers a whopping 4.15% APY, which is just super awesome compared to… pic.twitter.com/tCB78EmwRc
— Oleg Sotnikov (@OlegSotnikov_) April 18, 2023
Customers don’t have to pay any monthly fees or maintain a minimum balance. However, to qualify for the 5% reward, they need to set up a monthly direct deposit of $500 or more from a payroll provider or company.
Unlike many high-yield savings accounts available on the market, Step allows consumers to access their money without any restrictions on frequency or timing.
Furthermore, users can automatically round up their purchases to the nearest dollar and add the spare change to their savings, earning 5.00% for each dollar they hold in savings.
Move over Apple, Step launches 5% savings account
Interesting article today on Techcrunch. Step, the digital banking service geared toward teens and young adults, is now offering a 5% rate on its savings accounts.
With just one in three … https://t.co/DgfUiaWxd7
— Bruno Macedo – Fintech | Digital Banking (@armindom) May 19, 2023
In addition to the savings opportunity, Step introduced a superior rewards scheme.
Eligible Customers who receive 5% interest on their savings will also earn 3x points at some retailers, 2x points for dining out, food delivery, and charitable contributions, and 1x points for entertainment, streaming, and gaming, allowing them to maximize their daily spending.
Step Outpaces Apple
Tech giant Apple recently made headlines after it partnered with Goldman Sachs to develop a new savings account option for its Apple Card credit cardholders.
This enables them to save and grow their “Daily Cash” – the cash back rewards they earn from using their Apple Card to make purchases.
Apple currently offers an APY of 4.15%, which appears to be a competitive offering.
At the time of the announcement, Bankrate’s most recent statistics revealed that savings account APY rates ranged from 3.5% to 4.75%.
However, Step’s latest announcement seems to have pushed Apple aside, putting them at the top in terms of reward earnings.
Starting today you can now earn 5% on you savings with @step. Time to make the switch!
We are excited to invest in our customers future and encourage savings! pic.twitter.com/xT4kGF4n4V
— CJ MacDonald (@CJMacDonald) May 17, 2023
Step’s 5% savings account is a game-changer in the banking industry. This interest rate is significantly higher than what most traditional banks provide.
This makes it an appealing option for young people looking to grow their savings.
In an interview with Techcrunch, CJ MacDonald, CEO and Co-Founder of Step, stated that the firm has always intended to offer the highest savings rate among competitors to attract customers.
Therefore, Apple didn’t influence their recent action.
Catering to the Younger Generation
This action highlights the vulnerability of the conventional banking sector and the growing disruptive impact of fintech firms.
Due to high inflation, interest rates, and living expenses, young people are having difficulty saving at a time when it is critical to have funds set aside.
According to a recent Bankrate survey, only 22% of savers receive interest rates of 3% or higher, with 24% of the respondents earning less than 1%.
This indicates that the majority of savers are earning significantly less.
Another survey pointed out that 57% of respondents felt that lack of proper emergency savings impacted their mental health, making Step’s initiative an attractive proposition given the growing inflation rate.
According to a @Bankrate survey, 57% of respondents stated that a major issue adversely affecting their mental health is inadequate emergency savings.
But when every day of the last few years has felt like an emergency, is it any wonder those savings are taking a hit? pic.twitter.com/dvckMIfAcM
— Morning Brew ☕️ (@MorningBrew) May 9, 2023
With their innovative approach and attractive interest rates, Step aims to revolutionize how young people manage and grow their money.
According to CJ MacDonald, “Our mission is to assist teens and young adults in achieving their financial goals, whether they involve establishing a business, going to college, or purchasing a car with less debt.
He added that they are rethinking how savings should operate and prioritizing Step users. Therefore, customers may save more money, invest it, or use it to further their goals with the new 5% savings rate thanks to the Step App.
Step’s mission is to provide financial tools and services tailored to the needs and preferences of young consumers.
By understanding the unique challenges faced by this demographic, Step has positioned itself as a platform that not only offers traditional banking services but also focuses on financial education and empowerment.
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