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Nearly 70% Of Middle-Class Americans Haven’t Converted To Higher-Yield Savings Despite Interest Rate Increases

Social Security Benefits
Social Security Benefits; Source- CNBC

Savings accounts are now earning greater returns after years of low interest payments due to a series of interest rate increases from the Federal Reserve. However, many Americans are still not receiving the highest returns on their money.

Concerned About Inflation

According to a recent Santander poll, almost 70% of middle-class Americans haven’t transferred assets to higher-yielding accounts despite concerns about inflation.

However, a staggering 93% of respondents to a study conducted in late May stated that “competitive rates” are critical when selecting a bank.

Even though annual inflation has dramatically decreased over the previous year, the U.S. Bureau of Labor Statistics announced this month that it was still 3% higher in June than it was a year ago.

According to Deposit Accounts, the top 1% of savings accounts were paying above 4.5% as of July 25. This contrasts with a typical bank average of 0.42%.

Inertia, according to certified financial planner Kevin Brady, vice president of Wealthspire Advisors in New York, is the most straightforward answer. People are preoccupied with their daily activities, thus finding alternatives and putting the change into action receive less attention than they should.

There Is No Assurance That The Rate Won’t Decrease Soon At The New Institution


Source: cbs News

Americans with lower balances could be less inclined to move around. According to a May Experian poll, 40% of savers making less than 3% say they don’t have enough savings to make a shift worthwhile. Based on the present rates, someone with a three-figure amount could only receive a few additional dollars in interest.

The Experian poll revealed that convenience, being “too busy,” and a lack of knowledge about higher rates were some other justifications for sticking with a lower-paying bank.

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