Ally Bank Survey Shows Consumers Making Changes to Increase Savings
Nearly half continue to shop around for better savings options
MIDVALE, Utah .- Consumers are cutting back on expenses and shopping around for the best places to save money, according to survey results released today by Ally Bank. The survey showed a significant number (77 percent) of consumers have sacrificed discretionary purchases, including vacations, cars, clothing, dining out and entertainment to increase savings, and nearly half (47 percent) have shopped around for a better place to save their money this year.
More than one quarter (28 percent) of those surveyed said fees were the most frustrating aspect of banking. Two groups of respondents, those 18- to 34-years old and 35- to 44-years old, expressed the most frustration towards fees, with 38 percent and 37 percent, respectively.
“It’s clear that consumers are tightening their purse strings, expressing frustration with current banking practices and shopping around for better savings options,” said Sanjay Gupta, chief marketing officer. “These results highlight the need for straight talk in banking, as people seek a safe and efficient place to save and grow their money.”
Giving Up to Save Up
Of the results, approximately 77 percent of Americans said they had sacrificed unnecessary expenses and activities this year to save money and increase their bank savings. Dining out, entertainment, vacation, clothing and car purchases were all affected similarly, with nearly half of the respondents sacrificing something from each of those categories.
Age played a role in the tendency to give up the unnecessary, with 93 percent of the 35 to 44 age group giving up non-essential spending, while just over half (51 percent) of the 65 and over group deciding to cut back.
Nearly half (47 percent) of participants indicated they have shopped around for better places to save money this year. Men were only slightly more active in looking for better banking options than women at 48 percent and 46 percent, respectively. In addition, the 35- to 44-year- age group did the most deal-searching (61 percent).
Where Consumers Stash the Cash
When asked about where Americans prefer to save their money, less than one quarter (24 percent) indicated they use Certificates of Deposit (CDs) as a savings mechanism. Results showed that 68 percent use regular savings accounts as the primary channel for savings.
Participants with the highest annual household income (more than $100,000 annually) were more likely than their less affluent peers to utilize CDs, with 40 percent selecting the option in the survey. Only 13 percent of those making less than $35,000 a year responded that they use CDs to manage their savings.
“Generally, CDs have a higher rate of return, but many consumers may opt to use savings accounts so they don’t lock up their money for an extended period of time,” said Gupta. “Consumers should be on the lookout for products like Ally Bank’s nine-month no penalty CD, which allows them to save money at a higher interest rate than a traditional savings account while avoiding a fee for early withdrawal.”
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