Most middle-income Americans still earn less than 3% on savings, survey finds

Despite concerns about inflation, the majority of middle-income Americans haven’t yet tapped into more interest to fund savings. According to a brand new Santander research of around 2200 middle-income U.S. adults, conducted in the beginning of September. Sixty-four percent of middle-income Americans earn lower than 3 percent in their primary savings accounts, the research shows. In contrast the highest 1% average of high yield savings accounts offered more than 5% in the month of Oct. 30 according to Deposit Accounts. The bank was astonished by the fact that 22% customers do not know what they earn from savings, according to Tim Wennes, CEO of Santander U.S. However, a lack of knowledge isn’t the primary reason Americans don’t take advantage of the higher rates, as per the study. The main reason people aren’t transferring funds — according to 37% of respondents the reason was that they do not have saving or haven’t enough money to “make it worthwhile.” But, 36% of the people who were surveyed have at the very least $10,000 in savings. Wennes noted.

“I would argue it is worth their while” to investigate more yield-oriented alternatives He stated. “Become aware, look at your statements and then take action.”
The survey also found an ignorance gap regarding the terms used to describe savings products, like certificates of deposit and high yield savings accounts as well as the money market account. Deposit certificates can be used to lock in higher rates As Americans are preparing for the next interest rate announcement by the Federal Reserve this week, experts suggest that savers consider opening an CD to lock in higher rates for a certain period of duration. Although the central bank hasn’t been expected to increase rates, the it is possible that future changes in policy are uncertain.. At present, the highest 1% average of CDs offer nearly 5.75 percent over a year period as of Oct. 30 as per Deposit Accounts. “More and more of our customers are asking about higher interest rates,” said Wennes noting that there’s been a 10 year-high rise in interest on CDs. In comparison to alternatives like higher yielding savings accounts or Series I bond the highest rates for CDs with a one-year term could be better as per Ken Tumin, founder and editor of Deposit The ideal savings strategy is largely determined by your objectives and time frame. If you’re looking to draw the money in less than one year, CDs usually come with a penalty for interest, which reduces the overall yield.

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