Many Americans unclear on how savings accounts earn interest

Most people have savings accounts, but according to a new study, many are unaware of how their money actually grows.

Commissioned by LendingClub (https://www.lendingclub.com) and conducted by Talker Research, a new survey of 2,000 Americans revealed that 89% are at least familiar with one type of savings account, with the most well-known among them being standard savings accounts (71%), retirement accounts (51%), certificates of deposit (CDs) (45%) and health savings accounts (HSAs) (34%).

However, many respondents are less familiar with high-yield savings accounts (HYSAs) (30%), 529 accounts for education (18%) and cash management accounts (CMAs) (13%).

The data also revealed that while 79% of respondents have a savings account and are collecting interest on their funds, 43% of Americans are unaware of what that interest rate is.

Many also hold misconceptions about interest rates — two in three (68%) believe they need to have more money in their account to earn a higher rate, and 41% assume all banks offer roughly the same rate.

Respondents also have informal forms of savings, such as the 54% who said they have an emergency or rainy-day fund separate from their savings accounts.

Three in four (74%) of those with a rainy-day account are confident that they have a “good amount” of money should something go wrong.

“Many people have basic savings accounts, and that’s a great start. But you also need to understand the rate you’re earning or if there are fees,” said Mark Elliot, Chief Customer Officer at LendingClub. “To really get the most out of your savings, you need to look at those elements and understand how savings can turbocharge your situation over time.”

The study also took a deeper look at how Americans use three major types of savings accounts: CDs, standard savings accounts and high-yield savings accounts.

Those with CDs have held their account for an average of 11 years, starting when they were 46 years old. And since opening their account, two-thirds (67%) said they feel better about their finances.

In fact, once it matures, a majority of CD account holders said they plan to open a new CD account (59%). Meanwhile, others would move their money into a HYSA (26%), make major purchases (14%), or pay off their debt (13%).

It was also found that people with a standard savings account contribute to it 18 times per year — 73% doing so at least monthly. The average account holder said they have maintained their account for 15 years, starting at age 36, yet only 57% are aware of their interest rate.

Those with HYSAs shared a similar story. They contribute just as frequently: 18 times per year with 71% doing so monthly. And the average account holder has held their account for 11 years, starting at age 41. They were also more knowledgeable about their accounts’ interest rate (82%).

Many of those with savings accounts agreed their money is best saved for emergencies (69%), retirement (31%), vacation (31%), and everyday purchases if they were to lose their job (27%).

Collectively, 58% agreed If their accounts offered a higher interest rate, they’d contribute more often. And 61% plan to save more money in 2026.

“Now is a great time for people to start making a plan to reach their financial goals, including how they can build in behaviors that will help them save more,” continued Elliot. “My advice is to treat your savings account the same as a bill you pay every month – ‘set it and forget it’ and then watch your savings grow over time. With the right tools and awareness, saving doesn’t just prepare you for emergencies – it will help you build for the future.”

AMERICA’S TOP AREAS OF EXPERTISE (ON A SCALE FROM 1 TO 10)

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