However, those savings aren’t growing, and consumers are discontented. Nearly seven in 10 consumers (68%) surveyed by MagnifyMoney said they are frustrated by the low annual percentage yield (APY) on their accounts.
DepositAccounts founder Ken Tumin says it’s likely the Federal Reserve will keep its benchmark interest rate near zero for several years, which means Americans’ frustration with low APYs will continue. “We are unlikely to see significant improvement in savings account rates until after the Fed starts hiking rates,” he says.
However, more than one-third (34%) of consumers surveyed admitted they have no idea how much interest they’re earning with their primary savings account. The financial education provider says even those who do know their primary savings account’s APY are likely missing out on higher returns. Only 13% of consumers said they’re earning an APY of 0.5% or higher, even though the best online savings accounts yield an average APY of 0.55%.
Nearly half (46%) of survey respondents have moved their savings to a different bank or account type to earn more interest. MagnifyMoney says shopping around for the financial institution with the best APYs can pay off.
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