CHARLOTTE, N.C.–A new survey of Americans offers some insights into consumer behavior around deposits, which is increasingly important given the liquidity strains many credit unions are feeling.
Among the findings in the survey: national banks are most popular with consumers even if they don’t pay the best rates; most Americans don’t know what they’re being paid on deposits; and contrary to what one national survey has been finding, Americans said they are most satisfied with credit unions.
Those findings and others were released as part of an analysis by DepositAccounts.com, which said it used its own data to estimate average APYs for small, medium, large and online banks and credit unions among select institutions. In addition, it said it surveyed more than 2,000 U.S. consumers about their banking preferences and experiences.
Among the key findings, according to DepositAccounts.com:
- Americans prefer large banks
- The best high-yield savings account APYs are generally found online
- Consumers are most satisfied with credit unions
- The majority of consumers don't know their current APY
The Most Popular
DepositAccounts.com said it found large national banks are the most popular among Americans, as almost a third (31%) of consumers primarily bank with one.
“But while convenient, they may not be the best place to grow your money,” the report stated. Large banks offer the lowest average APYs on checking accounts (0.02%) and high-yield savings accounts (0.04%) among the select institutions DepositAccounts examined.”
The analysis noted it might be “more comfortable for some consumers to do their banking in person, but the best high-yield savings account APYs are generally found online. With an average APY of 1.78% across select banks, competitive rates are helping web-based banking grow in popularity.”
DepositAccounts.com said it found the majority of the 11% of consumers who say they primarily use an online bank have been doing so for less than five years, including 26% who say they joined two to three years ago.
‘Most Satisfied’
The report offered a recommendation for consumers.
“If you're looking for competitive rates with excellent customer service, credit unions could offer both; 77% of Americans who choose these nonprofits for their primary financial needs report being the most satisfied of any institution type with their service,” DepositAccounts.com said. “If you plan to stash your cash long term, 12-month certificates of deposit (CDs) from select credit unions have the highest APYs — 4.08%, on average — compared to analyzed banks.”
What’s My Rate?
DepositAccounts.com said it found that while APYs can vary depending on the type of institution chosen, 63% of people don't know their current APY.
“This means 74% of Americans aren't primarily banking where the lowest checking account rates generally are found, leaving easy money on the table,” DepositAccounts.com stated. “The best APYs on checking accounts can typically be found at small banks — offering 0.46%, on average, across the institutions analyzed — but only 26% of consumers primarily bank with them. These rates are 23 times higher than those found at the large national banks studied.
Making the Switch
Although 71% of Americans report being satisfied with their banks, DepositAccounts.com said it found 34% could look to switch in the next year. Of the 13% definitely considering a switch, 22% say low fees will be the most important decision-maker, followed by online or mobile banking capabilities (17%) and competitive financial offers (15%).
The full report can be found here.
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