Survey: Consumers Are Missing Out on Higher Return on Savings

Quick Answer

Only 1 in 5 consumers with savings accounts believe they are earning more than 3% APY on their savings, according to an Experian survey.

A couple meeting with their financial advisor to review their savings.

Experian surveyed 1,012 Americans about their savings accounts, and if they've sought higher rates than they may have previously earned this year. Survey conducted May 6-7, 2023. The sample was collected using a third-party company and was not from Experian's consumer credit database.

Since early 2022, rising interest rates have increased deposit yields to levels not seen in several years. Some savings and certificate of deposit (CD) accounts had annual percentage yields (APYs) that topped 4% as of May 2023, but so far, only some consumers are reaching for those higher rates.

Experian surveyed more than 1,000 consumers about their savings accounts, where they think interest rates are headed, and why they're not making moves to earn more on their deposits.

Only 1 in 5 Savers Believe They Are Getting the Best Yields on Their Saving Accounts

When we asked consumers with deposit accounts about the interest rates their savings are earning, only 19% said that they're earning 3% APY or greater. Moreover, 25% of respondents said they're earning no more than 1% APY on their savings, despite the rapid increase in interest rates over the past year.

Question: What do you think the APY is for your primary savings account?

Even When Better Rates Are Available, 40% Say It's Not Enough for Them to Move Savings

When we asked the savers earning less than 3% APY why they haven't moved their savings to a higher-yielding account, 40% said the higher yield still doesn't make moving their accounts worthwhile for them. Although the definition of "worthwhile" varies by individual, every $1,000 in savings moved from a savings account yielding 2% APY to one yielding 4% APY results in an additional $20 in interest earned annually.

But 30% of savers with low-yielding deposit accounts weren't even aware that higher-yielding savings were available. Younger savers, especially, were less likely to be aware of higher-yielding accounts.

Question: You indicated that your savings APY is under 3%. Is there a reason you haven't yet moved savings to a higher paying account?

However, somewhat counterintuitively, we found that awareness of higher-yielding savings decreased as household incomes increased. Among savers with household incomes of less than $50,000 annually, 28% weren't aware they could likely find higher savings elsewhere, while 36% of households earning more than $75,000 a year weren't aware of improvement. For those with incomes between $50,000 and $75,000 annually, 31% of low-yielding savers weren't aware of better savings alternatives.

More Savers Expect Credit Card Interest Rates to Climb Than Expect Savings Yields to Climb

More savers expect savings rates to be the same at the end of 2023 than expect it to rise or fall. Nearly half of our survey respondents, 46%, think rates will be the same in December 2023 as they are now. According to the Federal Reserve, the average deposit rate at U.S. banks was still a meager 0.37% in May. Fortunately, that's the average, and consumers can readily find many high-yield savings accounts online that yield above-average yields of more than 4% APY. If these savings yields persist, then about 60% of those in our survey are giving up at least 2 percentage points in interest.

Interestingly, although almost half of consumers surveyed said they expect savings account rates to be about the same at the end of 2023, even more think that credit card APRs will be higher. Of those surveyed, 60% think credit card APRs—currently averaging 20.92% APY—will be even higher by December.

Question: By the end of 2023, do you think interest rates for ______ will be:

One expectation seems especially certain among consumers: Rates aren't going lower anytime soon. Only 9% surveyed expect credit card APRs to decline by the end of 2023, and just 18% expect savings account yields to fall.

Not All Consumers Yet Motivated to Save

Consumers are generally aware that savings rates now pay meaningful interest, but many still aren't incentivized to seek higher-yielding savings. Higher-income respondents are surprisingly less likely to be aware that they should be moving their savings to a new high-yield savings account, despite being more aware about prevailing savings account yields.

One possible explanation is that consumers are now a generation removed from the last time savings accounts, certificates of deposit and other savings products paid meaningful interest. Since 2008, when home prices—followed by interest rates and the rest of the economy—collapsed, deposit accounts paid less than 1% APY, with the exception of modestly higher yields from 2018 to 2020. Whether elevated interest rates lead to a major shift in consumer sentiments around high-yield savings accounts remains to be seen.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.

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