Consumers are focused on short term deposits and high interest rates, but will not compromise on bank reputation, According to The Smart Investor Banking And Savings Trends Survey.
“The past year has seen a significant shift from low or zero interest rates on deposit products to higher rates, reaching up to 4% or even 5% APY, in financial products like savings accounts and CDs. With this in mind, we conducted a study to understand the current trends among consumers seeking savings products,” explained Baruch Mann (Silvermann), CEO of The Smart Investor.
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“Given the highest interest rates seen in the past 15 years, it’s natural that consumers prioritize interest rates. However, our findings also indicate that bank reputation holds great importance, which can be attributed to the recent uncertainty in the banking sector.”
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Key findings from the 2023 Banking And Savings Trends Survey include:
- Interest rates and bank reputation are top factors when choosing CDs or savings account: Most respondents (56%/62%) prioritize interest rates when choosing a savings account/CD, while 32%/31% consider reputation important.
- Consumers are looking for a reliable bank with great customer service and a variety of products:Â Bank reputation (30%) is the top priority when choosing a checking account, followed by customer service (20%) and variety of products (20%). Fees (13%) and mobile banking (9%) also influence decision-making.
- Short terms CD are highly preferred compared to long term CDs: 37% of respondents prefer a 1-year CD term, followed by 24% for a 6-month term. Longer-term options are less popular.
- Savings accounts are more popular than CDs: The majority of respondents (59%) prefer to put their money in a savings account, while 41% opt for a CD as their primary alternative.
- Savers are not comfortable with CDÂ laddering: Only 17% of respondents have utilized a CD ladder strategy, while 83% have not.
- Interest rate is important, but it depends:Â 57% of respondents would consider transferring their savings account for an additional 0.5% APY, while 43% would not consider making the switch.
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