Americans Aren't Saving Smartly, Survey Finds

10.17.07 | Money | 0 Comments | by junger

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More than 60 percent of American adults who have a savings account aren't set up for automatic deposits, while 32 percent don't know how much interest their savings account is earning, according to a new study.

Countrywide Bank commissioned a national banking survey that shows that, well, American consumers aren't saving smartly.The survey (full release here) found that 45 percent of respondents know that their savings account has an interest rate of under 5% APY. (This report was conducted during the recent rate drops.)

Given the number of high-yield online savings accounts that (did) offer a 5%+ APY, it's discouraging to know that nearly half of the respondents aren't utilizing the best options.

The study also found that 71 percent of respondents keep their savings and checking accounts in the same institution — not always a good idea, says Countrywide's Pierre Habis.

"Serious savers consider their savings account as 'one way' only, meaning that they make more deposits than withdrawls, and they succeed at this by keeping their transactional banking relationship at one bank and savings at another. We've found that if consumers' checking and savings are under the same roof, it's too easy to draw from that nest egg and that's when savings accounts stagnate," said Habis.

More telling, 67 percent of those with checking and savings accounts at the same institution haven't considered separating their two accounts.

Habis suggests three steps to smarter saving:
1. Separate your checking and savings accounts into different banks
2. Automate deposits from your checking to your savings account
3. Look for the best rate available if you aren't already getting it

While I'm a big proponent of informing yourself and taking personal responsibility for your financial situation, do consumers deserve all the blame for poor savings habits?

No, probably not. We don't have enough financial e ucation in our school systems — I don't remember ever taking a single class dealing with money management — and banks can take advantage of not offering their best products (normally online-only) to those not familiar with online banking.

(photo by [Un]conventional Beauty Photography)

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