Apple Card vs. Navy Federal More Rewards: Does 3.40% Savings Make Apple Card Better?

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I recently started using Apple Card, and one feature caught my attention: Daily Cash can automatically go into an Apple Savings account, where my current APY is 3.40%.

That made me wonder whether I should use Apple Card for more of my everyday purchases instead of my Navy Federal More Rewards American Express card.

The comparison wasn’t as obvious as I expected.

Navy Federal offers higher rewards in several everyday spending categories. Apple Card can offer a lower reward on some of those same purchases, but the Daily Cash can automatically move into Savings and start earning interest.

So could earning interest on Apple’s cash back actually make the Apple Card the better choice?

I did the math.

Apple Card vs. Navy Federal More Rewards

The Navy Federal More Rewards American Express currently earns:

• 3X points at supermarkets
• 3X points at restaurants and eligible food delivery
• 3X points on gas
• 3X points on transit
• 1X point on other eligible purchases

When points are worth one cent each when redeemed for cash, earning 3X works out to approximately 3% back in those categories.

Apple Card works differently.

It generally offers:

• 3% Daily Cash at Apple and select merchants
• 2% Daily Cash when paying with Apple Card through Apple Pay
• 1% Daily Cash on purchases that don’t qualify for a higher rate

Apple also allows Daily Cash to be automatically deposited into Apple Savings, where the money can earn interest.

My Apple Savings account is currently showing a 3.40% APY. That rate can change, so I’m using 3.40% only for this comparison—not assuming it will remain the same.

Does 3.40% Interest Make Apple’s 2% Better Than 3%?

This was the part I initially found confusing.

If Apple Card gives me 2% cash back and that money then earns 3.40% APY, does that make it better than earning 3% from another card?

No.

The reason is simple: the 3.40% APY applies only to the cash back deposited into Savings, not to the amount originally spent.

Suppose someone spends $1,000 at qualifying supermarkets.

	Navy Federal	Apple Card
Purchase amount	$1,000	$1,000
Reward rate	3% equivalent	2% with Apple Pay
Rewards earned	$30.00	$20.00
3.40% on reward for one year	—	~$0.68
Approximate value	$30.00	$20.68

And that example is actually generous to Apple.

It assumes the entire $20 sits in Savings for a full year and that the APY remains at 3.40% for that entire year.

Even then, the additional interest is only about 68 cents.

Another way to look at it:

2% × 1.034 = approximately 2.068%

So even after a full year of earning 3.40% on the reward, Apple’s 2% cash back would be worth approximately 2.07% of the original purchase.

That’s still less than 3%.

The Part I Almost Overlooked

There’s another important point.

Apple isn’t the only card whose rewards can eventually earn interest.

Navy Federal More Rewards points can be redeemed for cash. That cash could then be moved into an interest-bearing savings account.

So theoretically, I could earn approximately 3% in rewards first and then earn interest on those rewards too.

That means Apple Savings doesn’t necessarily make Apple Card more profitable.

What Apple gives me is something different:

automation.

Daily Cash can automatically flow into Savings. I don’t have to accumulate points, redeem them and then manually transfer the money somewhere else.

That’s convenient, but convenience doesn’t turn a 2% reward into a 3% reward.

Which Card Makes More Sense for Different Purchases?

Instead of choosing one card for everything, I think the numbers support using each one where it offers the stronger reward.

Purchase	Better Choice	Reason
Supermarkets	Navy Federal	3X points
Restaurants	Navy Federal	3X points
Food delivery	Navy Federal	3X points
Gas	Navy Federal*	3X points
Transit	Navy Federal	3X points
Apple purchases	Apple Card	3% Daily Cash
Eligible Apple 3% merchants	Apple Card	3% Daily Cash
Other purchases with Apple Pay	Apple Card	2% vs. 1X
Other purchases without Apple Pay	About equal	Generally 1% vs. 1X

*There can be exceptions. Some merchants qualify for Apple Card’s 3% Daily Cash, so it’s worth checking Apple’s current participating merchants rather than following this table blindly.

Merchant coding can also affect whether a purchase qualifies for Navy Federal’s 3X categories.

My Strategy Going Forward

I’m not going to choose one card and stop using the other.

Instead, I’m going to try a simple strategy:

Groceries, restaurants, gas and transit → Navy Federal More Rewards

Apple purchases and eligible 3% Apple Card merchants → Apple Card

Most other purchases where I can use Apple Pay → Apple Card

My Apple Daily Cash can continue going into Savings and earning interest.

For Navy Federal rewards, there’s also the option of periodically redeeming the points for cash and moving that money into savings rather than leaving the rewards sitting unused.

The Bottom Line

The Apple Savings feature made me wonder whether earning 2% Daily Cash plus 3.40% APY could outperform a credit card earning approximately 3% in rewards.

It doesn’t.

The reason is that 3.40% APY is earned on the cash back—not on the original purchase.

On $1,000 of qualifying spending:

3% rewards = $30

while

2% rewards = $20

Even if that entire $20 earned 3.40% for a full year, it would grow to only about $20.68.

Apple’s advantage is convenience. Daily Cash can automatically move into Savings and begin earning interest.

Navy Federal’s advantage is the higher reward rate in several common spending categories.

For me, the better solution isn’t choosing one card.