Misperceptions Preventing Americans From Earning More on Their Money Ahead of Holiday Season, Santander Survey Finds
- Fewer savers added to their balances in recent months, with six in 10 stating it has become harder to save as the year has gone on.
- Less than three in 10 (29%) use high-yield savings products, which could help a typical saver could earn more than $400 in interest.
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Nearly six in 10 say holiday shopping will negatively impact their savings goals, and three in four prefer to receive the gift of money this holiday season.
Santander Bank, N.A. ("Santander Bank") today announced findings from its Openbank Growing Personal Savings ("GPS") Tracker revealing many consumers are missing out on hundreds of dollars a year in interest by not using higher-rate savings accounts. More than seven in 10 (71%) are not taking advantage of these accounts, including high-yield savings accounts, money market accounts and certificates of deposit (CDs). Among those who have a higher-rate account and know their rate, 56% are earning at least 3% in interest, significantly above the national average annual percentage yield (APY) of 0.45%*.
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The survey, conducted as part of a research series exploring Americans' spending and savings habits, found that commonly held misperceptions about high-yield savings could be contributing to the low use. Among consumers who only have a lower-yielding traditional savings account, five misperceptions may be preventing them from using a higher-rate account to accelerate savings growth.
- Breaking up with your bank: Nearly six in 10 (58%) do not realize that you can open a high-yield savings account without leaving your primary bank.
- Security of funds: Six in 10 (63%) are unaware many high-yield savings accounts are FDIC-insured.
- Access to your money: Seven in 10 do not realize you can access savings in a high-yield savings account in a matter of days.
- Unaware of savings growth opportunity: Four in 10 do not know their current interest rate, and seven in 10 (72%) are not aware yields on savings are generally at their highest level in more than 15 years.
- Account set-up: Nearly eight in 10 (78%) think it takes 10 minutes or longer to open an online savings account, whereas some offerings can be set up in five minutes or less.
These misperceptions have led to inaction, and even regret, as 61% of higher-yield account holders wish they had opened one sooner. Four in 10 (42%) of those who have not yet opened a higher-rate account wish they had already done so.
"Consumers work hard for their money, and their money should work hard for them," said Swati Bhatia, Head of Retail Banking and Transformation at Santander Bank, which recently announced the U.S. launch of Openbank, its national digital banking platform. "Unfortunately, misunderstandings around the time, accessibility and security of having a digital high-yield savings account could deter many Americans from earning interest that can offset real-life expenses like gas or groceries. At Santander, we are working to educate consumers on the benefits of high-yield savings while providing a platform that offers the speed and convenience of a fintech with the strength and stability of a global bank."
Missed Opportunities to Accelerate Savings Growth
Many Americans could earn more interest on their money and accelerate savings growth by using a higher-rate account. For example, a typical saver** with $8,000 in a high-yield savings account earning 5.00% APY could generate more than $400 in interest after one year. The savings growth can be even more substantial for those with higher starting balances. A saver with a $25,000 initial deposit could earn nearly $1,300 in interest over the same time in an account earning 5.00% APY.
Saving Was Harder in Q3
More than eight in 10 Americans (83%) faced obstacles to growing their savings in Q3, such as persistent inflation, too many bills and unexpected expenses. As a result, most Americans were forced to make spending cuts to save in Q3, including 75% who made some sacrifice such as cutting back on dining out or entertainment and other discretionary purchases.
The survey found half of savers added to their balances in August and September, the lowest readings this year, and six in 10 (61%) indicate it has become harder to save as the year has gone on.
Holiday Shopping Hits Wallets
Saving could prove to be even more difficult in Q4, with an anticipated record-setting holiday shopping season just around the corner***. A third of Americans (34%) say they will spend more this holiday season, with nearly half of those with children under 18 years old (45%) saying the same. Overall, six in 10 (58%) say holiday shopping will negatively impact their future savings goals. This holiday season, most Americans (75%) agree they would prefer to receive the gift of money to add to their savings.
Methodology
This research on growing personal savings, conducted by Morning Consult on behalf of Santander US, surveyed 2,206 Americans adults. This Q3 study was conducted between September 27 – 29, 2024. The interviews were conducted online, and the margin of error is +/- 2 percentage points for the total audience at a 95% confidence level. This data was weighted to target population proportions for a representative sample based on age gender, ethnicity, region, and education. Monthly measures were based on additional monthly survey pulses, conducted by Morning Consult on behalf of Santander Bank, of 2,200 Americans adults. The monthly iterations were conducted in July, August, and September to measure month-over-month changes. This data was weighted to target population proportions for a representative sample based on age gender, ethnicity, region, and education.
The full report and more information about the Santander Bank, N.A. survey can be found here.
About Santander Bank, N.A
Santander Bank, N.A. is one of the country's leading retail and commercial banks, with $102 billion in assets. With its corporate offices in Boston, the Bank's more than 5,100 employees and more than 1.8 million customers are principally located in Massachusetts, New Hampshire, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania and Delaware. The Bank is a wholly-owned subsidiary of Madrid-based Banco Santander, S.A. (NYSE:SAN), recognized as one of the world's most admired companies by Fortune Magazine in 2024, with approximately 171 million customers in the U.S., Europe, and Latin America. It is overseen by Santander Holdings USA, Inc., Banco Santander's intermediate holding company in the U.S. For more information on Santander Bank, please visit www.santanderbank.com.
Openbank in the United States is a division of Santander Bank, N.A., which is a Member of FDIC and a wholly owned subsidiary of Banco Santander, S.A. © 2024 Santander Bank, N.A. All rights reserved. Santander, Santander Bank, Openbank, the Flame Logo are trademarks of Banco Santander, S.A. or its subsidiaries in the United States or other countries. All other trademarks are the property of their respective owners. For more information on Openbank in the United States, please visit www.openbank.us.
*According to the FDIC as of October 21, 2024
**The median savings in bank accounts is $8,000, according to the Federal Reserve
***According to the National Retail Federation
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