Most Americans Missing Out on Earning Higher Interest on Savings, Santander Bank Survey Finds

Santander Bank, N.A. (“Santander Bank” or “the Bank”) today announced findings from its inaugural Growing Personal Savings (“GPS”) Tracker, a new series analyzing how Americans approach growing their savings. The Santander Bank GPS Tracker revealed that higher-rate savings accounts including high-yield savings accounts, money market accounts and certificate of deposits (“CDs”) are each being used by less than 20% of the survey participants.

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A general lack of financial knowledge is contributing to the low use of savings accounts that earn more interest, with only 18% of Americans rating themselves as being proficient or an expert on their finances. Those describing themselves as having lower financial knowledge were far more likely to be earning less than 3% in interest on their savings. For example, 80% of those that know their rate and describe their financial knowledge as “novice” were earning less than 3%. On the other end of the spectrum, 74% of those that know their rate and describe themselves as “experts” were earning 3% or more.

“Our study reveals an important link between financial knowledge and account engagement with savings growth and better outcomes for consumers,” said Tim Wennes, CEO of Santander US and Santander Bank. “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.”

The study uncovered a relationship between savings totals and the use of savings account types that generally pay more interest. Medium savers (with $5,000 to $24,999 in their primary savings account) and high savers (with more than $25,000) are two-to-four times more likely to be utilizing savings accounts – such as High-Yield Savings Accounts and CDs – that generally pay more interest on savings. These savers were also two-to-three times more likely to have moved money in the past 12 months into an account that offered more interest.

Medium and high savers also exhibit specific financial behaviors more often, such as reviewing their account statements and information. They are also more likely to work with a financial professional or banker, more likely to save a portion of their tax return, and to conduct banking transactions digitally.