Despite inflation concerns, most middle-income Americans still aren't leveraging higher interest rates for savings. Here's what to know.
Despite inflation concerns, most middle-income Americans still aren't leveraging higher interest rates for savings.
Some 64% of middle-income Americans are currently earning less than 3% on their primary savings account, according to a new survey.Some 64% of middle-income Americans are earning less than 3% on their primary savings account, the findings show. By comparison, the top 1% average of high-yield savings accounts offer close to 5%, as of Oct. 30, according to DepositAccounts.
But a lack of awareness isn't the main reason why Americans aren't taking advantage of higher rates, according to the survey. The top reason for not moving funds — applying to some 37% of respondents — was because they either don't have any savings or don't have enough to "make it worthwhile.
Currently, the top 1% average of CDs are offering nearly 5.75% for a one-year term, as of Oct. 30, according to DepositAccounts. "More and more of our customers are asking about higher interest rates," said Wennes, noting there's been a decade-high uptick in CD interest.Of course, the right savings option largely depends on your goals and timeline. If you need to tap the funds in less than a year, CDs typically have an interest penalty, which lowers your overall yield.
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