One, a fintech owned by Walmart, is offering users a 5% annual percentage yield on savings accounts of up to $100,000, a spokesperson told Banking Dive on Wednesday.
The launch of the savings rate, which was first reported by Reuters, is more than 12 times the national average of 0.4%, according to Federal Deposit Insurance Corp. data, and comes as other digital platforms have boosted interest rates on savings accounts in order to lure new customers.
In order to qualify for the 5% savings rate, which is available for new and existing customers, an account must receive a direct deposit of at least $500 the previous month, or have a total daily balance of $5,000, the spokesperson said.
Customers can also earn 5% on up to $100,000 when they automatically save part of their paycheck using the platform’s autosave feature, the spokesperson said. All other savings balances will continue to receive 1%.
Since acquiring One Finance and earned wage access company Even Responsible Finance in January 2022, Walmart has been quietly building out its own financial services “superapp.”
Other features associated with the platform include 3% cash back at Walmart, overdraft protection, cash deposits and withdrawals and early access to paychecks.
As One looks to grow in a competitive field, it plans to leverage Walmart’s distribution channels, and is rapidly expanding its presence in Walmart stores, the spokesperson said.
Walmart’s brand recognition and nationwide physical presence will likely give an edge on other fintechs which boast similar offerings, David Donovan, executive vice president of financial services for the Americas at digital consulting company Publicis Sapient, told Banking Dive last year.
The retailer has more than 4,700 locations in the U.S. and 90% of the U.S. population is within 10 minutes of a store, according to Forbes.
“They don’t need to go acquire customers, they already have them,” said Donovan, whose company worked to build Goldman Sachs’ consumer bank, Marcus. “They just have to roll that service out and make it really easy and simple. It’s like, build it, and they’ll come.”
Meanwhile, one of the competitors Walmart’s One will be up against is Apple, another well-established brand that is investing heavily in its own financial services products.
In April, the tech giant launched a savings account with a 4.15% APY through its partnership with Goldman Sachs.