VALLEY FORGE, PA — A recent national survey by Vanguard revealed a significant disconnect in Americans’ savings strategies, with many failing to capitalize on higher-yield savings options. While nearly 90% of respondents are actively saving for short-term goals, 60% lack a full understanding of how interest rates impact their savings. This knowledge gap has left 57% of savers earning less than 3% interest, with nearly one in four earning under 1%.
“Americans are not earning the returns they deserve on their hard-earned cash,” said Matt Benchener, Managing Director of Vanguard’s Personal Investor business. “Vanguard is on a mission to change that with our Cash Plus account, potentially allowing Americans to earn eight times more than with a traditional bank savings account.”
The survey also found that over half of Americans save in traditional accounts offering average rates of just 0.41%, far below inflation-aligned options like Vanguard’s new Cash Plus account, which provides a 3.65% annual percentage yield (APY). This savings inertia may be contributing to the fact that 72% are uncertain about meeting their savings goals over the next two years.
To address this issue, Vanguard developed its Cash Plus account, offering competitive yields, FDIC coverage, no minimum balance requirements, and seamless integration with popular payment platforms like PayPal and Venmo. Andrew Kadjeski, Principal and Head of Brokerage & Investments for Vanguard’s Personal Investor business, emphasized the importance of intentional saving.
“By leveraging accounts with competitive yields and establishing intentional savings strategies, Americans can make their money work harder,” Kadjeski said. “We designed the Cash Plus account to give Americans a simple, effective way to save with intention and view their savings alongside their long-term investments.”
With inflation looming as a key driver for change, the survey found that 66% of Americans plan to adjust their savings approach within the next year. Vanguard’s Cash Plus account aims to provide an accessible solution, allowing savers to meet their goals with greater confidence.
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