In order to convince consumers that it’s time to save money once again, the Financial Services Roundtable and the Consumer Federation of America are teaming up to think of ways to offer cash incentives. According to the groups, millions of low- and middle-income Americans are without savings accounts, so on Thursday, large banks and consumer advocates decided to change that.
Savings Account Stats
A new analysis from the Consumer Federation of America determined that more than two-thirds of families making less than $19,000 a year lack savings accounts. And approximately half of families making $34,000 are without accounts.
But even more astonishing is that 42 percent of middle-income families making between $34,000 and $54,000 and 20 percent of those making more than $80,000 don’t have accounts either. With so many families lacking accounts, banks have declared a savings crisis and are now urging families to save money again.
Convincing People to Save Money
The groups have decided that the best way to convince people to save money again is by offering financial incentives. Some banks have already decided to make changes to savings accounts. For instance:
- U.S. Bank has eliminated the minimum savings account balance.
- Regions has reduced the minimum savings balance to $5.
- Bank of America has a minimum savings balance of $25.
Since the average savings balances usually starts at $100, these reductions are great deals for customers.
Other Bank Offers
Banks have tried other options to encourage consumers to open savings accounts. A few include:
- BBVA Compass plans to start a program that will annually match up to 6 percent of funds that customers have automatically transferred into their savings each month.
- U.S. Bank is offering a $50 Visa gift card for the first $1,000 in savings and another $50 gift card if the balance is maintained for a year.
- Bank of America is rounding up debit card purchases to the nearest dollar and transferring that changing into an account. Also, the bank matches a portion of the change up to $250 per year.
The Financial Services Roundtable is also encouraging bankers to allow customers to transfer money from checking to savings from free. They hope that these and other cash incentives will encourage families to open save money even if they’re working with a low income.
Do you currently have a savings account?
