The Top 5 Factors People Care Most About When Opening a Savings Account
When you’re looking for a savings account to place your hard-earned money, it makes sense to take a good look at the interest rate you’ll earn on your deposits.
But while interest rate may seem like the most critical aspect of a savings account — and it certainly is important — there are other factors that were rated even more crucial to savers in a recent SaveBetter survey.
In fact, interest rate was ranked #5 of the most important aspects of a savings account. So, what are the things that people care about more than interest rates? Let’s take a look.
The Survey Says ...
In the survey, “The Impact of the Covid-19 Pandemic on American Consumers’ Savings & Banking Behaviors,” we asked respondents to rate the importance of factors when it comes to deciding where to deposit their money.
Here were the top five results:
1. Strong safety, security, and fraud protection
Almost two-thirds, or 61%, of participants ranked strong safety, security, and fraud protection as the most critical factor of a savings account — and for good reason.
Data and cybersecurity hacks are becoming more sophisticated every day. And, according to a recent report, cyberattacks against the financial sector increased by 238% from February to April 2020, amid the Covid-19 pandemic.
Smart savers know that keeping their personal and financial data secure is of the utmost importance in our digital age. To provide better peace of mind to our customers, SaveBetter recently obtained SOC 2 certification, created by the American Institute of Certified Public Accountants (AICPA).
SOC 2 is a prestigious designation that confirms a company’s information security measures are up to snuff and have been properly executed. More precisely, SOC 2 ensures that an online savings bank has detailed, ongoing internal procedures to maintain the safety and protection of customer information.
2. No fees
After security concerns, 56% of survey respondents said that no or low fees are crucial in selecting an online savings account.
Savings account costs may seem minimal or insignificant, but over time, fees add up just like any other small, repeated expense. These expenses can put a significant dent in your nest egg’s growth over time.
For example, some major banks charge $5 monthly maintenance fees on their savings accounts unless you maintain a minimum balance of several hundred dollars. This means you could be paying a bank more money to hold onto your savings than you’re earning in interest.
With SaveBetter, we want to help customers reach their savings goals. That’s why none of our partner banks charge unnecessary maintenance fees when you bank through a SaveBetter account.
3. FDIC insurance
FDIC insurance was the third most important aspect of a savings account, according to participants. The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the U.S. government that protects the funds consumers deposit in banks and savings associations.
The FDIC insures deposits in participating banks up to $250,000 per depositor, per insured bank for each deposit account ownership category.
This insurance provides customers with the assurance that their money will be secure and accessible, even in the event that their bank fails or closes. Since the FDIC was established back in 1933, depositors have not lost a single penny in FDIC-insured funds.
FDIC insurance covers deposit accounts, including:
Money market deposit accounts
Certificates of deposit (CDs)
Luckily, all SaveBetter participating banks are fully insured by the FDIC.
4. No or low minimum balance requirements
Fifty percent of respondents stated that a savings account with no or low minimum balance requirements was a critical factor for choosing a savings account.
Other savings accounts that require holding a minimum or specific cash balance may impose a fee if your savings account balance drops below a certain threshold.
Especially in a time of economic uncertainty, you would want to avoid any fees incurred as a result of holding a low balance.
The good news is that with SaveBetter, you can open and maintain a high-yield savings account or CD with as little as $1.
5. An attractive interest rate
Rounding out the top five most critical aspects of a savings account is a competitive interest rate. SaveBetter survey respondents didn’t rank this as the first, second, third, nor even fourth most important factor when choosing a savings account, only just ranking it in the top five.
Interest rate and annual percentage yield are essential factors of any savings vehicle because they determine how much you’ll earn on the money within your account.
While the average national interest rate for a regular savings account is just 0.06%, those offered by SaveBetter’s partner banks are currently offering rates as high as 0.35%.
Such small differences in rate may not seem like a big deal, but here’s how it can play out over time:
If you deposit $10,000 into a traditional savings account with a 0.06% APY, you will earn just $30 in total interest after five years. But if you deposit that amount into a high-yield savings account with a 0.35% APY, your five-year interest would soar to more than $176 — that’s more than five times the amount you’d earn with the traditional account.
SaveBetter can cover all your needs and more
SaveBetter listens carefully to customer feedback, and we are confident that we addressed consumers’ top concerns when choosing a savings account.
When you open a savings account through one of SaveBetter’s partner banks, you can rest assured that your account will meet all your expectations:
Safe and secure — Our SOC 2 certification means our information security measures meet industry-leading standards.
No unnecessary fees — We never charge our customers fees for any SaveBetter high-yield savings accounts or CDs.
Protected by FDIC insurance — All of SaveBetter’s participating banks offer FDIC coverage of $250,000 per depositor for each deposit account ownership category.
Low or no balance requirements — You never have to worry about incurring low balance fees with a SaveBetter account. And you can start saving today with as little as $1.
Competitive interest rates — SaveBetter offers some of the most attractive high-yield savings and CD rates available, all from the convenience of a single account. So, you don’t have to sacrifice yield to obtain other essential prerequisites.
It’s time to SaveBetter
SaveBetter is the premier online marketplace for savers to discover competitive, FDIC-insured savings products offered by our network of banks.
With a SaveBetter account, it’s easy to get started with a one-time-only registration. And within minutes, you’ll have access to every savings product offered by our partner banks.
You can quickly and easily compare products with varying maturities and yields that suit your savings goals. Then, track everything from your SaveBetter account.
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The SaveBetter name and logo are trademarks of SaveBetter LLC. The Deposit Solutions name and logo are trademarks of Deposit Solutions GmbH, used with permission.
© 2021 SaveBetter LLC. All rights reserved.
APY means Annual Percentage Yield.
Banking services provided by Central Bank of Kansas City. Each customer authorizes the Service Bank to hold the customer’s funds in a custodial capacity in order to facilitate the customer’s deposits to and withdrawals from deposit accounts at various Product Banks that the customer requests through SaveBetter.com. The Service Bank does not establish the terms of the deposit accounts, or offer the deposit accounts to customers, and provides no advice to customers about deposit accounts. Central Bank of Kansas City, Member FDIC, d.b.a. Central Payments is the Service Bank.