Banking has evolved a lot since many boomers (ages 59 to 77) opened their first bank accounts. Digital banking has risen in popularity, and the number of institutions and accounts available has increased dramatically thanks to the rise of online banks and neobanks. Meanwhile, personal checks — for the most part — have become obsolete.
Many of these changes have happened within millennials’ (ages 27 to 42) lifetimes as well, but a new GOBankingRates survey found that the younger generation is more likely to embrace these changes.
Here’s a look at some of the key differences between millennials and boomers when it comes to how they feel about money and banking.
Millennials Are Twice as Likely To Use an Online-Only Bank
According to the GOBankingRates survey, 30% of younger millennials and 22% of older millennials utilize an online-only bank. Meanwhile, only 11% of younger boomers and 9% of older boomers bank at an online-only institution.
“Millennials grew up with technology and may be more comfortable using online banking than boomers, who may be more accustomed to traditional banking methods such as visiting a branch or using a checkbook,” said Levon Galstyan, a certified public accountant at Oak View Law Group.
In addition to being more comfortable using online banks, this type of bank may appeal to millennials who are looking for extra convenience.
“Online-only banks typically offer 24/7 access to account information and the ability to conduct transactions from anywhere with an internet connection,” Galstyan said. “This can be particularly appealing to millennials, who may value convenience and flexibility in their banking experience.”
Millennials Are More Open To Switching Banks
The survey found that 38% of younger millennials and 42% of older millennials considered switching banks in the past year. Among younger boomers, only 20% considered switching banks, and just 19% of older boomers did.
“The banking industry has undergone significant disruption in recent years, with the rise of online-only banks and fintech apps. This disruption may be more appealing to millennials, who may be more open to trying new technologies and services,” Galstyan said.
Millenials’ openness to switching banks may also be due to various life transitions that can occur during this age, such as getting married or buying a home.
“As they age and their financial needs change, millennials may be more likely to switch banks to find a financial institution that better meets their needs,” Galstyan said.
According to the survey, the top reasons millennials were open to switching include wanting better banking products and services, and wanting online access.
Millennials Are More Likely To Have Different Bank Accounts at Different Institutions
More than half of millennials bank with multiple financial institutions, while just half of younger boomers and 42% of older boomers hold accounts with more than one bank.
“Millennials may be more likely to have different bank accounts at different institutions in order to manage multiple financial goals, such as saving for a down payment on a home, investing for retirement and building an emergency fund,” Galstyan said. “[Another reason] millennials may be more likely to open multiple bank accounts at different institutions is in order to take advantage of better interest rates, lower fees or other terms offered by those institutions.”
Millennials and Boomers Conduct Their Banking Differently
The survey found that the majority of millennials bank via their phones, with less than 20% banking in person. Among younger boomers, 42% prefer to bank in person — the largest percentage of any group. Older boomers are pretty divided in their banking preferences — 35% prefer to bank online, 34% prefer to bank via their phones and 31% prefer to bank in person.
“Millennials grew up with technology and may be more comfortable using mobile banking apps than boomers, who may be more accustomed to traditional banking methods,” Galstyan said. “Boomers may have formed habits and preferences for in-person banking that they are comfortable with and may be less likely to change.”
Boomers Keep More Money in Their Bank Accounts
The majority of Americans across all age groups keep $100 or less in their savings and checking accounts, but boomers were more likely than millennials to have higher balances in their accounts. Thirty percent of younger boomers and 22% of older boomers keep a minimum balance of over $2,000 in their checking accounts, compared to 9% of younger millennials and 13% of older millennials. In their savings accounts, 25% of younger boomers and 20% of older boomers have more than $10,000, while only 8% of younger millennials and 14% of older millennials have this high of a balance in their accounts.
There are a number of possible explanations for this. For starters, boomers likely have more money in general, so it’s not surprising they have more in their bank accounts, too.
“Boomers may have higher income levels than millennials, which may make it easier for them to maintain a larger balance in their accounts,” Galstyan said.
These differences also might be due to having different financial priorities and behaviors when it comes to saving and spending.
“Boomers may be more likely to prioritize saving for long-term goals such as retirement, while millennials may be more focused on paying down debt or saving for shorter-term goals,” Galstyan said. In addition, millennials may keep less in checking accounts because “they are more likely to use credit cards for their daily purchases than boomers, who may be more likely to use cash or debit cards.”
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Methodology: GOBankingRates surveyed 1,000 Americans ages 18 and older from across the country between Dec. 7 and Dec.12, 2022, asking 19 different questions: (1) What category does your current financial institution fall under?; (2) Have you considered changing banks within the past year?; (3) If you have considered changing banks in the past year, were any of the following factors? (Select all that apply); (4) Which feature, perk or other offering is most important to you when opening an account with a new institution?; (5) Are you currently satisfied with all the banking products and services offered by your bank/credit union?; (6) Would you ever have different types of accounts across multiple banks? (i.e. checking at Chase, but savings at TD Bank); (7) What is your most preferred method of banking?; (8) Which of the following is the biggest factor for you staying with your current bank?; (9) Which of the following bank accounts do you currently use/have open? (Select all that apply); (10) How much is the minimum balance you keep in your checking account?; (11) How much do you currently have in your savings zccount?; (12) What amount of a sign-up bonus would make you consider switching banks?; (13) Have you considered using any app-only banking platforms (aka neobanks) in the past year (e.g. Current, Upgrade, Chime, Dave, etc.); (14) How important is it to you for your bank to be affiliated with a crypto exchange/platform?; (15) In the past year, how often have you written a physical check?; (16) When was the last time you visited your bank in person?; (17) Why would you choose to visit your bank in person? (Select all that apply); (18) When you think about banking, do you think of it as something you need or don’t need?; and (19) What services/products do you expect from your bank and/or credit union? (Select all that apply). GOBankingRates used PureSpectrum’s survey platform to conduct the poll.