That's what a new Santander poll of about 2,200 middle-income people in the U.S. in early September found.
Why Middle-Income Americans Struggle to Earn: Most middle-income Americans are still not using higher interest rates to save money, even though they are worried about inflation.
That’s what a new Santander poll of about 2,200 middle-income people in the U.S. in early September found.
The results show that 64% of Americans in the middle class are making less than 3% on their main savings account. According to DepositAccounts, the average high-yield savings account rate for the top 1% as of October 30 is close to 5%.
CEO of Santander U.S. Tim Wennes said the bank was surprised that 22% of people still don’t know how much money they are making on their savings.
But the poll shows that Americans aren’t taking advantage of higher rates because they aren’t aware of them. There were 37% of respondents who said they didn’t move their money because they either didn’t have any savings or didn’t have enough to “make it worthwhile.”
Wennes said that 36% of those polled do have at least $10,000 saved, though.
He said, “I would argue it is worth their while” to look into options with higher yields. “Become aware, think about what you say, and then do something.”
Another thing that the poll showed was that people didn’t know what savings products like CDs, high-yield savings accounts, and money market accounts were.
High rates can be locked in with certificates of deposit.
This week, the Federal Reserve is likely to change interest rates again. In the meantime, savers may want to open a CD to lock in higher rates for a certain amount of time. Even though rates won’t be going up, it’s still not clear what the central bank will do next.
According to DepositAccounts, the top 1% of CDs give nearly 5.75 percent for a one-year term as of October 30.
“More and more of our customers are asking about higher interest rates,” Wennes said, pointing out that CD interest has reached its highest level in ten years.
Ken Tumin, the founder and director of DepositAccounts.com, says that the best rates on one-year CDs might be a better deal than high-yield savings accounts or Series I bonds.
Of course, the best way to save relies on your goals and time frame. You usually have to pay extra interest on CDs if you need the money in less than a year. This lowers your total yield.
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