A new survey from Santander Bank has found that less than 20 percent of Americans are using higher-rate savings accounts to grow their savings.
In the bank’s inaugural Growing Personal Savings (GPS) Tracker, the bank surveyed 2,203 American adults between March 16-18, 2024. The survey found that a general lack of financial knowledge is contributing to the low use of savings accounts that earn more interest. Only 18 percent of the respondents rated themselves as being proficient or an expert on their finances. Those with lower proficiencies were more likely to earn less than 3 percent interest on their savings.
“Our study reveals an important link between financial knowledge and account engagement with savings growth and better outcomes for consumers,” Tim Wennes, CEO of Santander US and Santander Bank, said. “As a Bank focused on helping our customers prosper, we commissioned this research to uncover the challenges impacting savers and bring to light key actions that could improve the financial outcomes for them.”
According to the survey, 80 percent of the respondents that described their financial knowledge as “novice” were earning less than 3 percent, and 74 percent who described themselves as “experts” were earning more than 3 percent.
Additionally, medium savers (those with between $5,000 and $24,999 in their primary savings account) and high savers (those with more than $25,000) are between two and four times more likely to be using accounts that pay more interest on savings, and were two to three times more likely to have moved money in the past 12 months into an account that offered higher interest rates. Medium and high savers were also more likely to review their account statements and information, were more likely to work with a financial planner, were more likely to save a portion of their tax return and more likely to conduct banking transactions digitally.