The following post comes from the America Saves Blog. Follow them on Twitter and Facebook.
July 3, 2013
In a new report released last week, the Consumer Federation of America (CFA) revealed that basic savings accounts remain an important savings vehicle for most Americans, especially for low- and moderate-income (LMI) families.
Basic Savings Accounts Important for Lower-Income Families
o Nearly half of all families (49%) had a “traditional” (or basic) savings account with a median balance of $2,400.
o More than one-third of all LMI families (37%) had one of these accounts with a median balance of $800.
o That represented 16 million LMI families with total balances exceeding $13 billion.
Basic Savings Accounts Help Families Save for Emergencies
As the report notes, these basic savings accounts represent the best source of funds for LMI, and even many middle-income, families to pay for unexpected expenses such as car repairs and many medical and dental bills.
Availability of Savings Accounts
o Basic savings accounts are offered by nearly all of the more than 14,000 U.S. banks and credit unions;
o are guaranteed by the government;
o are easy to access because of low opening balances ($100 or less at 89% of the banks, and $50 or less at 39% of the banks) and the ubiquity of ATMs;
o and are free if minimum balances requirements are met or, at many bank branches, if automatic deposits of as little as $25 are made monthly.
Other alternatives, including payday loans, are almost always more costly financially or socially.
The report was based on analysis of two new sources of data – unpublished data on traditional savings accounts from the Federal Reserve Board’s 2010 Survey of Consumer Finances (SCF) and research of the websites of the 50 largest banks (by number of branches), 50 typical medium-size banks, 50 typical small banks, and 10 largest credit unions, supplemented by phone calls to many of the institutions.
Need help saving? Want to pay down debt? Take the Military Saves Pledge today then visit www.MilitarySaves.org for information and inspiration.
- Written by Katie Bryan
- Category: Blog
- Published: 03 July 2013