Key takeaways
- Saving money is a significant source of stress for many Americans.
- The US personal savings rate declined from 5.3% in May 2023 to 3.9% as of May 2024.
- There are plenty of steps you can take to boost your savings, even if you don’t have a ton of money to put away.
How does your financial situation look compared to your friends? Since it’s not exactly normal to ask someone how much credit card debt they have, how much their home costs or how much is sitting in their bank account, it’s a tough question to answer.
However, you can get an idea of how you stack up based on national figures. If you’re wondering how you’re doing at saving, here’s a rundown of average savings amounts for a variety of Americans and what you can do to boost your savings habits.
What is the average American’s savings account balance?
The median balance in American transaction accounts is $8,000, according to the Federal Reserve’s most recent Survey of Consumer Finances. Transaction accounts include checking, savings and money market accounts and prepaid debit cards. The average value Americans hold in transaction accounts is $62,410. However, the median value -- the midpoint in the data set -- is a better representation of what the average person has in the bank because a small number of large account balances push average values higher.
A lack of savings can cause significant stress. A recent survey conducted by CNET sister site Bankrate revealed that 47% of people say money negatively impacts their mental health, and more than half of those individuals pointed to not having enough emergency savings as one of the biggest contributing factors to their anxiety.
Savings statistics at a glance
The statistics on US savings show that many Americans continue to struggle. According to research from Bankrate:
- More than a quarter (27%) of households reported having no emergency savings at all.
- More than one-third of Americans have more credit card debt than emergency savings.
- More than half (59%) of Americans are uncomfortable with how much they have in emergency savings.
Additionally, the St. Louis Federal Reserve reports that the US personal savings rate -- the percentage of disposable income a person is able to save -- has declined from 5.3% in May 2023 to 3.9% as of May 2024. In other words: Americans are saving less of their income.
It’s easy to understand, too, as CNET research shows that inflation has created a serious challenge for most households. In the Fed’s latest study on economic well-being, 65% of adults said that increases in the prices they pay have made their financial situation worse.
Average savings by demographic categories
How much you're able to save can be affected by many factors, such as your income, education level and age. The Fed’s SCF report highlights saving outcomes according to several demographic categories. Here are several key ones to help you gain better insight into how your ability to save compares to others.
Average savings by age
Older Americans -- those ages 65 to 74 -- have the most stored in their accounts -- understandably so, as they’ve had more time to accumulate savings. The table below shows the median value held in accounts by age.
Average savings by income
Also unsurprisingly, higher incomes correlate to larger transaction account balances.
Average savings by race/ethnicity
The SCF report also separates savings totals by race or heritage. Asian, Native American, Alaska Native, Native Hawaiian and Pacific Islander are included in the “other” racial category.
Average savings by education level
We can also look at the average savings balance level according to a person’s level of education. College degree holders report more than three times the amount of savings than the next closest category, those with “some college.” This may be because, among other things, education level impacts income level, which the SCF has shown has a direct impact on the average savings balance.
How much should you save?
The answer to this question largely depends on your circumstances. Experts routinely recommend socking away three to six months’ worth of expenses for emergencies. However, that may not be enough for your savings goals.
On the other hand, your savings strategy should be based on your unique situation. If you’re working to pay off high-interest credit card debt, you may need to lower your savings goals in the short term to chip away at it.
To determine your target savings amount, identify your most immediate savings goal. Use this to decide how much you should -- and can -- save from each pay period. Then, use the momentum from accomplishing this goal as motivation to continue growing your savings.
5 easy ways to build a savings habit
Saving may not be your superpower (yet), but it’s a skill you can hone with time and practice. These five tips will help lay the foundation you need to blossom into a sophisticated saver.
- Create a monthly budget. A budget allows you to account for all income and expenses accurately. With a clearer picture of your obligations, you can make better decisions on how to best allocate your money. Budgeting apps such as Rocket Money and YNAB help you set up budgets that can connect to your bank accounts and track your income and expenses.
- Organize your savings goals. Sub-accounts are a great tool for visually tracking your savings goals. You can find these at institutions such as Alliant Credit Union and Ally Bank.
- Generate additional income. Earning additional income will speed up your savings. CNET reviewed some great side hustles to help you generate more income.
- Seek financial advice through your bank. Many banks and credit unions offer consultations with financial professionals to help you find the best savings strategy. Golden 1 Credit Union, for example, provides free instructor-led webcasts. Each session is 30 minutes long and covers such topics as building a better budget and saving over the long term.
- Automate your savings. Whether you choose to save weekly or monthly, automatic transfers can help you maintain a regular savings habit. Your employer can initiate these through your paycheck direct deposit or at the account level. Your bank can help you establish regular transfers from a checking to a savings account. You can also transfer money to an external account to keep your savings out of sight and out of mind until you need it.
Deposit accounts to help you save
While building your emergency savings, you’ll want an account that’s liquid and easily accessible, yet separate from the accounts you use to manage everyday living expenses. Additionally, your savings should be kept in a federally insured financial institution that’s covered by either the Federal Deposit Insurance Corporation (for banks) or the National Credit Union Administration (for credit unions). This protects your money up to $250,000 per person, per institution if the bank fails.
Consider these accounts for storing your savings:
High-yield savings account
A high-yield savings account is an interest-earning savings account often offered by online banks or credit unions or online-only arms of larger banks. Without the overhead costs of brick-and-mortar branches, these banks can pass savings onto you in the form of higher annual percentage yields, or APYs. The best APYs available on high-yield savings accounts continue to top 5%.
High-yield savings account APYs are variable and can change based on market conditions. However, whatever the rate environment, keeping your savings in an account that earns competitive interest only helps your bottom line.
Traditional certificate of deposit
A certificate of deposit, or CD, is a deposit account that offers a fixed rate for a specific time or term. In exchange for fixed growth, you agree not to withdraw your money before the term ends. The main benefit of a CD is that your money grows over time at a fixed APY. Competitive one-year CDs, for example, can earn over 5% APY, which is significantly higher than the national average. If you’re thinking of opening a CD, you’re wise to open one sooner than later as the likelihood of a Fed rate cut is on the horizon.
While a CD can be a great place to store extra savings, it shouldn’t serve as the primary savings option for your emergency fund. That’s because if you need to withdraw your funds before the CD term ends, you’ll pay a penalty (typically equal to a portion of the interest earned).
No-penalty CD
A no-penalty CD is a specialty CD that offers a fixed rate for a specific term like traditional CDs. However, this deposit account doesn’t impose an early withdrawal penalty if you need to access your money before the term ends. These CDs are generally less widely available, and the APYs are lower. However, the additional flexibility can be worth a slight drop in rates.
Money market account
A money market account, or MMA, is similar to a high-yield savings account. It offers a higher interest rate than your traditional savings account but has some added flexibility, such as the option to use a debit card or write checks. MMAs typically have competitive APYs, but they’re slightly lower than high-yield savings accounts. They also tend to have higher minimum deposit requirements.
The bottom line
US savings trend statistics can be unsettling. However, the issues plaguing many Americans don’t have to be part of your story. Taking advantage of high rates on deposit accounts, along with building the consistent and intentional habit of setting aside a small amount of money each pay period, will add up over time.
Remember, saving money isn’t just for problems that pop up when you least expect them. You can also establish a savings habit to help you afford things that make life more enjoyable. Developing a strategy to build your savings includes selecting the best account, or combination of accounts, to store your money. And staying on top of the most competitive accounts banks offer will make your savings journey easier, adding to your bottom line and overall quality of life.
