Return on investment (ROI) is the number one determining factor for Americans when choosing a savings product, followed by interest rate, according to a new report from Plinqit, a platform providing automated savings, data-driven financial wellness content and virtual account management.
While savings methods vary among consumers, some are more effective than others in generating returns, Plinqit explains. The top factor, cited by over two in five Americans (41 per cent), used to decide where to save their hard-earned money is the ROI an account can generate for them. The second most-cited factor, at 37 per cent, was interest rates offered by the financial institution.
These findings come from the new Plinqit 2024 State of Savings Report, which offers insights into the savings habits of today’s consumers. The report is based on a recent Plinqit survey conducted online by The Harris Poll of over 2,000 US adults ages 18 and older.
“Given today’s interest rates, taking the time to move any extra cash you may have into the right savings account can make a major difference in your total savings. If you’re not making the right moves, you’re leaving money on the table that could instead be working for you,” explained Kathleen Craig, founder and CEO of Plinqit.
Wealth emerges as an important factor
Plinqit also found that household income also plays a role in these decisions, as the more income a household earns, the more likely they are to consider ROI when deciding how to save their money.
Compared to Americans with an annual household income of less than $75,000, those with a household income of over $75,000 are nearly twice as likely to consider ROI as a determining factor (52 per cent compared to 27 per cent). Higher earners are also more likely to base their decisions on recommendations from a financial advisor (37 per cent compared to 22 per cent).
Craig also explained how insights can support financial institutions looking to better serve their customers: “About a third of Americans reported that when choosing a savings account, they consider how easy it is to understand the account and how it works (34 per cent), or what is available at financial institutions where they have an existing relationship (31 per cent) also play a role in where they choose to stash their savings.
“Uncovering the behaviours of consumers and the factors that play a role in their financial choices, such as household income and age, can help financial institutions better understand how to support their customer segments with the right product offers and recommendations that help them thrive financially.”
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