FDIC Steps to Support 

Household Savings

Keith Ernst

Federal Deposit Insurance Corporation
Session goal

 Gather feedback on a set of potential 

steps the FDIC could take to add value to 

efforts to encourage regular household 

savings, particularly in liquid, insured 

accounts
Presentation outline

 Brief review of savings statistics

 FDIC role

 Perceived challenges to savings efforts

 Potential steps

 Discussion 
Low household savings participation

 30% of households lack a savings account 

(FDIC 2012)

 39% of families save regularly and an 

additional 35% save amounts “left over” at 

year end (FRB 2012)

 Even among families with incomes of $15,000-$30,000, median 

account holdings were higher among regular savers ($2,220 vs. 

$1,326) and lowest among those that did not save (< $250)
Limited household resources 

 2 in 5 consumers report that they certainly or 

probably could not come up with $2,000 if an 

unexpected emergency arose (FINRA 

Investor Education Foundation 2013)

 Families in the bottom three-fifth’s of the U.S. 

income distribution reported a median of 

$1,500 across all of their checking, savings, 

and other transaction accounts (FRB 2012)
Families want more savings
Consequences

 43% of Americans could not sustain poverty 

level spending for three months if they faced 

income disruption (CFED 2012)

 Upon job loss, low income families frequently 

face hardships (food, bills), but are more 

likely to do so when in “liquid asset poverty” 

(51% vs 28%) (Urban Institute 2009)
FDIC’s role

 A safe option to build savings is an important 

benefit from a banking relationship

 Making that opportunity available broadly is 

consistent with FDIC economic inclusion 

priority

 Builds on prior work, including safe savings 

account
Four perceived challenges

 Limits to intermediary expertise and capacity

 Consumer challenges

 Lack of identified benefits to motivate forprofit partners

 Lack of awareness among civic leaders and 

other stakeholders
Complement existing expertise and 

capacity

 Support efforts to convene national and 

regional conversations

 Clarify potential technical obstacles

 E.g., perceived obstacles arising from CIP 

requirements & application screening

 Identify and promote promising practices on 

savings product development and marketing
Address consumer challenges

 Develop and distribute FDIC-branded 

materials specifically designed for use with 

consumers that—

 Motivate

 Clarify and simplify choices

 Assist in developing a plan to save regularly

 Help position consumers to have success on 

savings commitments
Motivate partners

 Conduct research into the benefits that may 

flow to institutions that promote positive 

savings options to consumers

 Conduct and highlight research into best 

practices around savings program design and 

marketing

 Clearly and consistently speak to institutions 

about opportunities to promote savings
Raise awareness

 Enhance data collection in the Household 

and Bank Surveys to focus on household 

savings habits and institutions’ efforts to 

assist households to save

 Develop a communications strategy to detail 

savings rates and opportunities to encourage 

strong savings habits targeted at reaching 

civic leaders and other stakeholders
Discussion questions

 Do we have the right set of challenges?

 Would the steps we have described to 

address them add value to efforts to 

encourage household savings?

 Are any duplicative of existing efforts?

 Are there additional steps the FDIC should 

consider?