Lots of credit cards come with cash-back rewards. But how many cards pay you interest on those rewards?

For that perk, you'll need the Apple Card. With Apple's cash-back credit card, you can earn 4.25% APY on your rewards when you deposit them to an Apple Savings account. The downside? This savings account doesn’t have the same functions as a regular bank account.

What is the Apple Savings account?

Apple Savings is a high-yield savings account (HYSA) that allows Apple Card users to deposit their cash-back rewards and earn interest.

When you earn cash back on other credit cards, it usually sits in your card account, waiting to be applied as a statement credit. With the Apple Card, however, you have a unique option: You can either transfer the rewards to Apple Cash to spend them, or you can set up an Apple Savings account where the rewards are deposited to earn interest.

Here's what makes Apple Savings accounts unique:

• Only available to Apple Card account owners and co-owners (not participants)

• Pays interest on your credit card rewards and your deposits from other bank accounts

• Cash-back rewards, also known as "Daily Cash," are automatically transferred into the account

• Funds must be transferred to Apple Cash or a linked bank account before spending

• Managed exclusively through the Wallet app

Read more: How to transfer Apple Cash to your bank account

Account details

Apple Savings accounts, which are available through a partnership between Apple and Goldman Sachs, were first launched in 2023. While these are FDIC-insured bank accounts, they have some unique limitations. There are no fees or minimum balance requirements, but accessing your funds can be cumbersome. Here's what you get:

• APY: 4.25% (variable)

• Minimum opening deposit: None

• Fees: None

• Minimum balance: None

• Maximum balance: $1,000,000

• Direct withdrawals: Not allowed

• Apple Cash transfer limit: $10,000 per transaction

• Apple Cash transfer timeline: Instant

• ACH transfer timeline: Up to five business days

How to set up an Apple Savings account

If you have an Apple Card, you can open an Apple high-yield savings account in just a few minutes by following these steps:

1. Add Apple Card to your iPhone

2. With your iPhone, open the Wallet app and select Apple Card

3. Tap "More" and then "Daily Cash"

4. Tap "Set Up" and then follow the instructions

Once you complete this process, your cash back rewards will automatically be deposited to the Savings account.

Pros and cons of Apple Savings

Is the Apple Savings account worth it?

The Apple Savings account is only worth opening if you already have an Apple Card. If you're already getting cash back with this card, the Apple Savings account gives you an easy way to increase your reward.

Just be prepared to navigate a few restrictions. You can't spend money directly from your Apple Savings account. Instead, you have to transfer the money to a linked bank account. In the past, some customers complained that transfers took weeks to complete, according to a report in The Wall Street Journal. Today, you should expect them to clear within five business days (not including evenings and weekends).

For anyone considering an Apple Card, the Apple Savings account shouldn't be your only reason to apply. The card's 1% to 3% cash-back reward comes nowhere near offsetting the ultra-high APR, which ranges up to nearly 30%. Even when you figure in the Apple Savings Account interest rate, the high APR will still translate to losses for anyone who carries a month-to-month balance.

Alternatives to the Apple Savings account

Apple Savings isn't the only bank account with attractive rates. You can earn even more if you put your money in one of these accounts, and you may have quicker access to your funds:

High-yield savings accounts

Apple Savings is a type of high-yield savings account, but its earning potential doesn’t measure up to some other HYSAs on the market. In fact, it’s possible to earn 5% APY or more with an account from certain financial institutions, including Poppy Bank (5.50% APY), Western Alliance Bank (5.31% APY), and LendingClub (5.30% APY) — and with fewer restrictions.

High-yield checking accounts

Checking accounts usually aren’t meant to hold cash long term. But if you tend to have a high checking account balance, earning interest on that money is a great perk. And there are some high-yield checking accounts (particularly from online banks and credit unions) that pay anywhere from 1-7% APY. Plus, these accounts often come with added perks such as early direct deposit, debit card rewards, and more.

Certificates of deposit

If you aren’t planning to spend your savings for a while, a certificate of deposit can be a great way to lock in today’s competitive interest rates for a year or more. Again, some of the best CDs pay 5% APY and up.

Money market accounts

If you’re looking for the high earning potential of an HYSA with the flexibility of a checking account, a money market account could be a great option. These accounts pay higher interest rates than traditional savings accounts and often come with check-writing capabilities and/or a debit card.

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