WASHINGTON—A new study indicates that most Americans use traditional bank and credit union savings accounts to save and save automatically—however, those under age 25 are less likely to choose CU for savings.
The report from America Saves shows that for the second year in a row, respondent’s top two primary savings vehicles included a traditional bank savings accounts (43%) or a credit union savings accounts (20%). The percentages remained fairly constant from last year’s survey, where 34% reported saving in a bank savings account and 30% in a credit union savings account. Noteworthy is that respondents under 25 were much less likely to choose credit union savings accounts as their primary saving method.
“This along with other data from the Consumer Federation of America and America Saves continues to show that basic savings accounts remain important savings products for Americans, especially for low- to moderate-income families,” said America Saves Director Nancy Register.
However, respondents also reported using non-traditional savings products as one of the ways they save money. When asked “Not counting savings for retirement, which of the following do you use for putting money aside as savings?” 34% of respondents reported using their checking account, a transaction account that is not optimal for saving, and 21% reported using a safe place at home, where they make no interest and risk losing their money if lost or stolen. When asked “Which is the primary savings product or option you use?” only 10% chose a checking account and 6% choose a safe place at home.
Saving automatically through direct payroll deposit (39%) and automatic electronic funds transfer (25%) remained the top two selected savings methods by survey respondents. Nearly two-thirds of respondents use one of these automated methods as their primary way to save.
“For years, savers have told us that setting up automatic savings is one of the best ways to save because they canset it and forget it. America Saves promotes automatic savings as the best way to save and these results highlight the key role this method plays in the lives of responding savers,” said Register.
Compared to those age 35 and older, those under 25 were:
- Much less likely to select “credit union savings” or “money market” as the main savings products they use.
- More likely to select “checking account” or “safe place at home” as the main product they use to save.
- Much less likely to select “automatic electronic funds transfer” and “website” as their main savings method used.
- More likely to select “ATM or teller,” “mobile app,” or “prepaid card” as their main savings method used.
- Somewhat less likely to “agree” that the products they use help them save, are convenient, are easy to understand, and feel safe.
- More likely to choose saving for education, motor vehicle, and special event.