households. Similarly, they have double the percentage of college educated heads that unbanked households have in general. But what is most striking is that this subgroup of 165 respondents reported nearly 40% higher mean assets (58190 pesos) than the whole sample of unbanked households. Thus, excluding unbanked households that chose the “No money” response causes mean assets to rise far more than income, suggesting that this response means that the household is unbanked because it has too little savings to justify opening an account, and not because it earns too little.

# **5   Savings accounts: Their costs and benefits**

The BANSEFI survey collected data on savings accounts by asking households to list the balances and the institutional type- bank, formal or informal micro-finance institution (MFI)- for all their savings accounts, and additionally by asking them about account details, such as the interest rate, for up to three each of old and new savings accounts. Tables 8 and 9 use these data to describe the savings accounts of the banked households.

Table 6 first tells us that 13.8% of “banked” respondents had a savings account with a bank, 0.9% with an informal MFI, and nearly 89% with a formal MFI. The rest of this table summarizes savings accounts after having aggregated across accounts within a household. Mean total household balances in savings accounts were 5314 pesos, and most of this was held with a formal MFI: on average, a banked household had 4379 pesos in an informal MFI, 908 pesos in a bank, and a mere 31 pesos in an informal MFI.

The remaining statistics in Table 6 are based on the more detailed data from (up to) six accounts per household. What do these data reveal about the benefits and costs of savings accounts? The average yield on these savings accounts was 1.5% per annum, and the average initial deposit was 2161 pesos, with households on average depositing money into an account 13 times and withdrawing it 8 times in a year. Most notably, only 7.3% of respondents had an account which required an annual maintenance fee. Among those that paid a fee, the median household paid fees of 100 pesos per account, and the mean fee was about 600 pesos per account, suggesting that while some households held accounts with very high fees, the vast majority paid very little or nothing in annual fees. However, 54% of households had a savings account which charged a “social participation fee”, which is a one-time, non-recurring fee, and of these households the median one paid fees of 500 pesos per account.

Table 7 breaks up account features by type of savings institution by averaging within all accounts of a type across all households. Savings accounts in banks had the highest mean balances (6600 pesos), followed by those in formal and informal MFIs. Median balances, however, were about 1000 pesos across all account types, indicating that most account balances are similar irrespective of the institution, although some accounts in banks and formal MFIs can be large. Banks and informal MFI’s gave roughly similar mean yields of about 1.5% per annum, and accounts with informal MFI’s gave a mean yield of 3% per annum, but since this latter figure is based on just 14 responses, we should hesitate in concluding from this that informal savings accounts pay more. None of the informal MFI accounts charged a fee, however, while 35% of bank account and 2.7% of formal MFI accounts did so. Not only were bank accounts more likely to charge an annual fee, but they also charged the highest fees, with the median annual fee in banks being 187 pesos.