Bankers Unveil Savings Inducements
An effort to prepare millions of Americans to save for their rainy days and for retirement was launched by a group of large banks and consumer organizations at a Newsmaker Feb. 18.
"There really is a savings crisis. and it ranges from low to middle class families," BNY
Mellon Asset Management President and CEO Ronald P. O'Hanley said. "They blow out a tire in their car, they need to take care of a leak in the roof, but they have no money to handle that.
“More people in the world today are over 65 than the people ever had reached the age of 65,” he cautioned about the retirement group emerging in the coming years."
O'Hanley said that “35 million people have no retirement plan while a minimum of $52,000 is needed for an average American household to survive."
Other speakers highlighted the ways the Consumer Federation of America and the Financial Services Roundtable are implementing savings programs that pay consumers to save with “automatic” options and offering very low minimum balance requirements.
Of the 21 banks in the group, 16 major banks have announced they will lower their minimum balances on savings accounts, making it easier for people to save without having to worry about getting hit by low balance fees.
U.S. Bank has no minimum savings account balance, Regions has a $5 balance, and Bank of America has a $25 minimum balance.
In the past, the standard minimum savings account balance could be as much as a few hundred dollars.
Financial Services Roundtable President Steve Bartlett said, “I think we have a responsibility to bank the unbanked, and some days we do a better job at that than others. This is targeted at tens of millions of families that have a bank or credit union but don't have a savings account."
U.S. Bank, a Fortune 500 company, is offering a $50 for the first $1,000 saved, and if the balance is maintained for a year, the saver gets a $50 Visa gift card.
In April, BBVA Compass will start a program that annually matches up to 6% of the funds that customers have automatically transferred into savings each month.
The Financial Services Roundtable also wants to encourage its bank members to let customers transfer money from checking to savings for free, as each of the group's 21 largest banks do.
The panel called on Congress to propose and pass more legislation to help Americans save and streamline the ongoing efforts to ingrain “savings” habit in the American culture.