The Consumer Federation of America (CFA) released a report addressing a key question about traditional savings accounts at banks and credit unions: Since they often pay only 0.01 percent interest – 10 cents annually on a $1,000 deposit – are these savings accounts still popular and, if so, why?
The report found that over half of U.S. households now own a traditional savings account, that the incidence has increased in this century, and that deposit levels have grown as well. Between 2004 and 2019:
- The proportion of households with traditional savings accounts rose 10.6 percent – from 47.1 percent to 52.1 percent – and the increase in this period was continuous.
- The median level of deposits of households with savings accounts rose by two-thirds – from $3,000 to $5,000 in nominal dollars (the CPI increased by only about one-third in this period).