:max_bytes(150000):strip_icc()/GettyImages-1810936589-6a02772cae124bbd93cd553d30501dc1.jpg "Most Americans Are Missing Out on Key Savings Account Benefits, Research Reveals")
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Key Takeaways
- The majority of Americans say their savings are earning less than 3% interest, according to a survey by Vanguard.
- More than half of respondents reported saving in traditional bank savings accounts or checking accounts, earning them minimal interest. Many high-yield savings accounts are available, with several having rates over 4%.
Americans are trying to save, but research suggests that many are leaving money on the table.
Nearly 90% of Americans currently save or plan to save for short-term goals, according to a Vanguard survey from earlier this year. But more than half are using traditional bank savings accounts or checking accounts, Vanguard said, where average interest rates are roughly 0.41%
Almost 60% say that their savings are earning less than 3% interest, according to the Vanguard survey. That echoed another survey from Santander Bank, which found that almost 70% of respondents said they weren’t using higher-rate accounts.
Why This Matters
Choosing the right savings vehicle can meaningfully boost returns, especially as inflation erodes purchasing power. Understanding yield gaps helps consumers keep more of their money working for them.
“By leveraging accounts with competitive yields and establishing intentional savings strategies, Americans can make their money work harder,” Andrew Kadjeski, Principal and Head of Brokerage & Investments at Vanguard, said in the report.
There are many high-yield savings accounts currently available, several with interest rates exceeding 4%.
Many Americans say they hope to change their savings plans: Almost 70% of Vanguard respondents said they intend to adjust their plan in the next year, with inflation being the biggest factor. But another report said Americans fell short of their savings goals last year.
