Survey Finds Majority of Millennials Willing to Change Banks

As the year comes to a close and Americans set resolutions, it looks as though a number of consumers will be seeking a new banking account in 2023. A recent survey conducted by the FinTech M1 found that 71% of Millennials surveyed would consider changing their primary bank in order to receive a higher annual percentage yield (APY) on their funds. That figure rose to 79% among those intending to retire early (before their 60s).

In terms of how much of an increase they’d require to consider a change, 40% said an APY difference of less than 1.5% would be enough for them the switch. Also notable is that 31% of respondents were more likely to move their primary financial institution now than they were 12 months ago.

While 2022 began with low savings account interest rates, a series of aggressive increases from the Federal Reserve have sent APYs soaring. For example, online banks such as Discover and Ally have recently increased the rate on high-yield savings accounts to 3.30% APY. However, many larger banks have kept their savings account rates steady at 0.01% APY, bringing the national average to 0.19% according to Bankrate.

Offering commentary on the survey results, M1’s founder and CEO Brian Barnes explained, “Millennials may have a reputation for prioritizing short-term experiences over long-term savings, but what we’ve found is that they are overwhelmingly ready and willing to make sacrifices for their long-term financial health.” Barnes continued, ” What’s missing from their financial picture is a system of products that works as hard for that financial future as they do. The largest banks in the American financial system refuse to significantly raise savings rates to a meaningful degree because of the impact on their bottom line, even as inflation continues to grow and central bank rates continue to rise. They are betting on inertia to carry them through the next economic cycle, but our survey finds that consumers may not be willing to stick around this time.”

Not coincidentally, this survey from M1 comes as the platform intends to launch a high-yield savings account early in 2023. According to the company, those enrolled in its M1 Plus membership will be able to earn 4.50% APY on their cash once the account launches. However, the base rate for non-Plus members is expected to be 0.50% APY. Currently, an M1 Plus subscription comes at a cost of $125 annually.

With APYs among online institutions now proving significantly higher than what larger, brick-and-mortar banks are offering, it’s understandable that frustrated savers would be considering a change. At the same time, since APYs can change over time, those seeking better rates should be sure to consider all that a banking account has to offer before deciding to go “all-in” on one option. Nevertheless, given today’s technologies and the diversity that FinTech brings, there’s certainly no shortage of options available to those who want to earn more on their money in 2023.

Leave a Reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Bilt and Point.Me Partner for Award Flight Search Integration

With several credit cards, customers can earn points that can then be transferred to various travel programs and redeemed for flights or hotel bookings. Unfortunately, finding and booking the best award travel deals isn't always as straightforward as one might assume. To assist with that, Bilt has unveiled a new integration with Point.Me that will help its rewards members search for award flights on airlines that participate in Bilt's transfer...

Zurp Raises $5 Million for Creator Experience Rewards Credit Card

A FinTech looking to marry credit card rewards with the creator economy has just closed a fresh round of funding. This week, Zurp announced that it had raised $5 million to create a "credit card for experiences." New Form, MAGIC Fund, Launchpad VC, OVO Fund, Darling Ventures, and Animal Capital all participated in the pre-seed fund along with a number of strategic investors. Zurp is a startup looking to create...

U.S. Bank to Launch Business Altitude Connect Credit Card

U.S. Bank is set to expand its small business credit card line-up. Recently, the bank announced the impending launch of the new Business Altitude Connect card. Applications for the new product are expected to open next month. In terms of rewards, Business Altitude Connect cardholders can earn 5x points on hotel and car rentals booked directly in the Rewards Center. Meanwhile, other travel purchases, such as airfare and hotel bookings, will...