Seeking The Most Consumer-friendly Savings Accounts
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more than half (51 percent) of banks do not disclose interest rates or yields on their website, and one in five do not publish their monthly fees -- two features the report identifies as anti-consumer.As for monthly fees, 30 percent of banks charge less than $2 per month, while 35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.
How the big banks rankThe study indicates that big banks are a mixed bag when it comes to offering consumer-friendly savings account features.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV