A new report reveals that while savings accounts are a financial staple for nearly half of America's families, not all of these accounts are created equal.
The study released last month by the Consumer Federation of America analyzed data from a yet-to-be-published report from the Federal Reserve Board, as well as the policies and bank rates at 160 financial institutions. The report focused on what types of banks are offering consumers the best deals on their savings accounts.
"Bank savings accounts remain the most useful way for most lower-income families to save for a rainy day, but some of these accounts are far more pro-consumer than others," said Stephen Brobeck, CFA executive director and author of the report, in a written statement.
Finding consumer-friendly savings accounts
The financial institutions in the study included:
- 50 largest banks in the nation (by number of branches)
- 50 medium-sized banks
- 50 small banks
- 10 largest credit unions in the nation
Surprisingly, more than half (51 percent) of banks do not disclose interest rates or yields on their website, and one in five do not publish their monthly fees -- two features the report identifies as anti-consumer.As for monthly fees, 30 percent of banks charge less than $2 per month, while 35 percent charge at least $5 per month. Of the large banks, 16 of the 50 in the study waive monthly fees for those who set up automatic deposits to the account, and others waive the fee for consumers who also open a checking account at the institution. About half of the banks surveyed require consumers to maintain a minimum balance between $200 to $300. And practically all banks pay virtually nothing in terms of interest. Only 4 percent of the banks surveyed pay more than 0.25 percent in interest. However, the study noted that some of the best savings account rates go to savers who choose online accounts.