Apple (NASDAQ:AAPL) has been making headlines for the launch of a savings account that offers a competitive interest rate of 4.15%. Without a doubt, the latest product offering coming out of Apple’s fintech push comes at a pretty exciting time, at least in the eyes of a potential market disruptor. As Apple plunges deeper into financial services with its disruptive hat on, it’s hard to be anything but optimistic about the company.
US regional banks feel pressure. Apple may be seeing an opportunity
US banks have been under a lot of selling pressure for over a month. In fact, it all started with the bankruptcy of SVB Financial. While other regionals fell under the weight of the Federal Reserve’s interest rate hikes, a full-blown US regional banking crisis ensued. Bad bond investments eroded depositor confidence and ultimately paved the way for a run on the banks.
It is difficult to know when this pressure that hurts regional banks will be contained. Over the span of a month and a half, we have witnessed the second, third, and fourth largest bank failures in United States history. After such a wave of failures, it’s no mystery why some depositors are feeling a bit nervous. While the largest US banks have held steady in this storm, they too could lose a bit as depositors look for alternatives.
Of course, there have always been fintech companies, neobanks, and smaller financial institutions that have offered highly competitive deposit rates. That being said, there has never before been a respected, consumer-focused giant of a company like Apple entering the financial services space. Apple is a $2.65 trillion company that many tech-savvy users already trust with their data on a daily basis. For many Apple users, this trust has been built over more than a decade.
When it comes to financial services, trust and reliability play a critical role in where depositors or investors choose to do business. Of course, competitive rates always help, but they are not always the determining factor. With Apple closing the curtain on its high-rate savings account, I think the company could win a lot of business as confidence in banks takes a modest hit with each regional bank that fails.
Apple and Goldman could continue to make moves in consumer banking
Apple may be relatively new to the financial services space, but it has all the tools it needs to thrive. With a little help from Goldman Sachs (New York Stock Exchange:GS), I think Apple is the only company that could revolutionize the financial industry as we know it. Sure, the banking business can be profitable, but it can also be tremendously turbulent when the tide turns. With Apple partnering with Goldman (and perhaps other banks in the future), the company may find itself able to enjoy more of the feast of financial services without possible indigestion.
At this juncture, many depositors may be inclined to take money out of those sub-2% savings accounts and hide it at Apple, where they can earn more than double the interest.
Reportedly, 69% of Apple Card holders expressed interest in opening a savings account. Younger consumers, specifically those in the Millennial and Gen Z cohort, may be inclined to get an Apple Card if it means taking an excess into such a competitive savings account.
According to a report made by Forbes, Apple’s high-yield savings account generated nearly $1 billion worth of deposits in just four days. That is amazing.
Apple is competitively priced, has a reputation built on decades of trust, and a brand name that’s virtually impossible to match. It’s no mystery why Apple’s foray into banking has met with such profound initial success.
Is AAPL Stock a Buy, According to Analysts?
Turning to Wall Street, AAPL’s stock appears to be a strong buy. Of the 25 analyst ratings, there are 21 buy recommendations, three hold recommendations and one sell recommendation. Apple’s median price target is $177.23, implying 5.8% upside potential. Analyst price targets range from a low of $120.00 per share to a high of $205.00 per share.

The bottom line of Apple’s stock and its Fintech push
Apple has always been concerned with doing things better than the competitors it seeks to take on. With some banks facing a crisis of confidence, I would look to get more people to transfer their money to Apple, not just for the higher rate, but for the added convenience and peace of mind.
As for earnings, I would look for more details on Apple’s fintech push. Even if the quarterly results don’t impress, comments about Apple’s direction could be a deciding factor for shares.