The latest consumer banking statistics reveal that interest rates are trending upward, bank counts have ticked upward after a long and steady decline, and consumers of all types are switching to mobile-first banking in large numbers. Prepare for a deep dive into these statistics and how you should respond to them.
As a consumer with money in an FDIC-insured bank or NCUA-insured credit union account, you can trust that your funds are safe to the same degree that you trust the U.S. government will remain intact and solvent. These federal agencies, the Federal Deposit Insurance Corporation, and the National Credit Union Administration, insure deposit accounts up to $250,000.
This being the case, your only reason to care about the status of the banking industry is that a thriving industry will likely mean better banking deals for you. So, how does it look? Well, if you are a saver who’s long lamented near-zero bank account interest rates, you may have cause to celebrate. Interest rates are on the rise. As well, banks’ assets are plentiful and growing, and online banking and mobile banking are becoming more useful and feature-rich by the day.
Consumer banking statistics: industry overview
To get situated, let’s first look at the consumer banking industry as a whole. We’ll examine the 10 largest banks, commercial banks’ total assets, and total open bank branches.
10 largest U.S. banks
Among U.S.-chartered, FDIC-insured banks, these are the top 10 according to the Federal Reserve’s most recently released statistics (source):
Commercial banks: total assets
As of 13 September 2023, the total assets of all commercial banks in the U.S. is about $22.86 trillion (source).
Though growth appears to have stalled recently, perhaps owing to a small but well-publicized number of bank failures (four banks failed in 2023: source), that stall follows a period of exceptionally rapid growth.
Should you fear more bank failures?
Peter Schiff, an economist, and investor known for having predicted the 2007–2008 financial crisis, believes that more bank failures may be on the way (source):
Why would rising bond yields threaten some banks? One of Schiff’s associates at Schiff Gold, Alasdair MacLeod, explains the danger posed by rapidly rising yields on U.S. Treasury bonds (source):
As the rates on new bonds rise, the resale value of existing bonds with lower rates naturally drops. If a bank holds such bonds as collateral for loans, the rising bond yields pose increasing risk for that lender. Think mortgage lenders during the collapse of a housing bubble.
How should you respond to this?
Should this worry you as a consumer? Since a “wave of bank failures” would have negative economic consequences, it certainly should. But, provided your accounts are all FDIC- or NCUA-insured, you probably don’t need to worry that you’ll lose your deposits — unless, of course, the crisis becomes so severe that the U.S. government collapses. Short of that, bank consumers should find their existing balances protected. Of course, if the only way the FDIC and NCUA can cover claims after a wave of bank failures is to have the Federal Reserve create new money for these agencies to borrow, increased inflation could significantly erode the value of your deposits.
Suppose you believe there’s a good chance of a catastrophe that will make your deposit accounts much less valuable despite preserving your balances. In that case, you may wish to prepare accordingly. (Although the linked article discusses hyperinflation, the same tips apply to any situation where the purchasing power of your dollars drops.)
Commercial banks: number of branches
The latest data from the FDIC indicate that FDIC-insured banks had 69,905 branch locations open in the U.S. in 2022. At that time, there were 4,136 FDIC-insured banks, averaging about 17 branches per bank (source).
In 2023, the number of banks grew to 4,645, but the FDIC had yet to report a new branches total when we prepared this article in early October 2023 (source). If the average of 17 branches were to hold true in 2023, the 4,645 banks reported by the FDIC for 2023 would yield close to 79,000 branches.
Declining bank count: cause for concern?
Despite turbulence and some bank closures, the banking industry has no shortage of assets or branches. FDIC-insured banks have been declining in number for several years, likely representing industry consolidation through mergers and acquisitions. Larger banks, like larger companies in general, are better able to cope with complex government regulations. Hunter Hastings, a business consultant and economics writer, has noted (source) that regulations provide large enterprises with
Larger banks are probably also better able to remain profitable when the interest rates they can charge for loans are very low. Higher rates allow more “wiggle room” for offering creative financial products and better deals to the best (lowest-risk) borrowers. Creative, niche product offerings allow smaller, alternative financial services to compete. When rates are very low, qualified borrowers may find that the offers they get don’t differ much one from another. As rates rise, differences between the best and worst offers grow, making comparison shopping more worthwhile.
Bottom line on banks and branches: though a sudden large drop in the number of banks would be concerning, the gradual decline we’ve seen doesn’t seem so. As well, 2022–2023 has seen an uptick in the bank count.
Consumer trends in banking: rates and balances
Interest rates are rising, which should encourage more savings. As yet, however, American households don’t seem to have ramped up their savings much. If you are like most consumers, you should probably save more than you do.
Overall transaction account balances
Transaction accounts allow you to make payments or transfers to third parties. Checking accounts are the most familiar example. The Code of Federal Regulations (CFR) provides a full legal definition in Title 31 Section 566.318 (source), and Nasdaq makes available a somewhat simplified version (source).
The CFR definition just mentioned notes that “transaction accounts” include “demand deposits, negotiable order of withdrawal accounts, savings deposits subject to automatic transfers, and share draft accounts.” In addition to checking accounts at banks and credit unions, this list includes many savings accounts, money market accounts, and prepaid debt card accounts. These are the most liquid bank accounts that consumers have. When the Federal Reserve Board of Governors last updated its Survey of Consumer Finances (2019), only 1.8% of American families had no transaction accounts (source).
Average account rates, balances, and fees
The most notable 2022–2023 development in bank accounts may be rising interest rates. The average annual percentage yield (APY) for checking accounts has more than doubled, from 0.03% to 0.07%. Meanwhile, savings account APYs have risen from 0.06% to 0.45%.
Meanwhile, Money market accounts’ average rates have risen from 0.07% to 0.63%, and the average rate for a 12-month certificate of deposit (CD) has jumped from 0.14% to 1.76%. And keep in mind that the best rates from online banks can be significantly better, up to 10 times the national average for checking, savings, and money market accounts.
Average checking account balance
The Federal Reserve’s Survey of Consumer Finances found that the median total balance in an American family’s transaction accounts was $5,300 (source). Although checking accounts are not the only bank accounts that can fit into the “transaction accounts” category, they are probably the main transaction account for most families (alongside a savings account). The one weakness in this statistic, however, is that this survey was last updated in 2019.
JPMorgan Chase offers some more recent findings, dating to December 2021 (source):
On the assumption that a median American household falls in one of JPMorgan Chase’s two middling groupings (quartiles), the resulting $1,500–$3,000 median balance appears to show a decline from the 2019 level ($5,300).
Since the Federal Reserve’s broader “transaction accounts” category could include accounts excluded from JPMorgan Chase’s findings, however, the value of comparing these findings seems limited. JPMorgan Chase’s assessment of changes since prior years is that balances have dropped the most in the lowest income families since rising in all groups following COVID-era stimulus payments. Though the balances in other groups have also declined from pandemic highs, they remain somewhat elevated in high-income groups. Such, at least, was true as of December 2021.
Average savings account balance
If you ask one of today’s AI-enhanced search engines, you may find the “transactions account” averages from the Federal Reserve’s 2019 Survey of Consumer Finances being quoted as the amount of “savings” an average American household has. Such, at least, is what Google told this writer. This is pretty loose usage, though it seems popular among journalists.
In the broad sense, “savings” includes everything from your transaction account balances to money you have stored in C.D.s, in retirement accounts, under the floorboards or in a safe at your home, and so on. In the narrow sense that we’re interested in here, on the other hand, only an actual savings account qualifies, and the federal definition of “transaction accounts” seems to mean that some savings accounts might not satisfy the criteria. So following the example of several journalists and identifying the median savings account balance as $5,300 (instance), the 2019 transaction-accounts median balance reported by the Federal Reserve, doesn’t seem right.
That option not being open to us, let us attempt a reasonable estimate. If we assume that the largest portion of any family’s liquid savings will be kept in savings accounts rather than checking accounts, money market accounts, or prepaid debit card accounts, then the median savings account balance should be somewhere near, but below, the $5,300 a median family in 2019 held in all its transaction accounts. Given the drop in personal liquid savings indicated by JPMorgan Chase’s end-of-2021 research, we may take it for granted that the median family savings account balance is today further below the 2019 figure, perhaps in the $3,500–$4,500 range.
Transaction account balances and savings insecurity
A median savings balance of a few thousand dollars or more would seem more than sufficient to make a typical family feel they could afford a small emergency expense of $400, wouldn’t you think? Yet, a Federal Reserve survey found that 37% of respondents couldn’t cover an unexpected expense of $400 without borrowing money or selling something (source). True, 37% is a minority, but it’s a large minority. Should this many people be worried about a $400 expense if an American family with median-level savings has at least a few thousand dollars on hand?
Two explanations suggest themselves. One is that the full median “savings” amount is the short-term product of employment income and is needed for monthly expenses, meaning this “savings” amount is only maintained while income remains unchanged. The other is that people are unduly anxious about their ability to pay small emergency expenses. If you follow pop psychology and biology, you may have heard that humans’ background as hunter-gatherers made persistent worriers more “fit” to survive in hazardous environments where failing to be on your guard (that is, worried) all the time could get you killed. Though the writer doubts these speculations, some readers may grant them greater credence.
On a more practical note, being on your guard about savings does make you more fit to survive and thrive financially. Read our comprehensive guide How to Save Money to ensure you are among the fittest who survive financially in the years ahead.
Additional banking statistics: savings rate and dollars saved
While the average balance in actual savings accounts is a matter of plausible speculation, other savings statistics are more solid. Though personal savings isn’t limited to money in savings accounts, or even to money in savings and checking accounts, balances in such accounts probably vary in tandem with total personal savings. And most banked households probably do keep much of what they save in such transaction accounts.
Here’s a diagrammatic overview of Americans’ personal savings rates and total dollars saved over the last decade.
The personal savings rate is the percentage of disposable income that’s saved rather than spent. As of the most recent observation date in July 2023, Americans are saving only 3.5% of their disposable income, yielding $705.6 billion in savings.
Typical account fees
No discussion of saving money in a bank account would be complete without some discussion of account fees, since these will affect how much you save. Here is a table with sample fees for five major banks and an average of all banks surveyed in 2021. U.S. Bank no longer offers Easy Checking to new clients, but you may find links to alternative financial services on its product page.
|Checking account fees at major banks: five examples and survey average|
|Bank||Checking account||Monthly fee (if not waived)||Overdraft fee||3rd-party ATM fee|
|Chase Bank||Chase Total Checking||$12.00||$34.00||$3.00|
|Bank of America||Advantage SafeBalance||$4.95||$0.00||$2.50|
|Wells Fargo Bank||Wells Fargo Everyday Checking||$10.00||$35.00||$2.50|
|Citibank||Basic Banking Account||$12.00||$34.00||$2.50|
|U.S. Bank||Easy Checking||$6.95||$36.00||$2.50|
Perhaps you noticed the “if not waived” wording in the above table. The fortunate reality is that many bank fees can be avoided. Read our 5 Bank Fees and How to Avoid Them to learn about some common fees and how to not end up paying them.
Consumer trends in banking: online and mobile banking
Though rising interest rates stand out as an important banking industry development, other developments also merit attention. In particular, the rise in online and mobile banking is noteworthy. Among societal trends accelerated by COVID-era policies and social phenomena, such as a shift from in-office to remote work that has created a new category of towns, use of digital banking services stands out. During the pandemic, these services became indispensable to many consumers.
In the words of Nimayi Dixit, a fintech research analyst at S&P Global Market Intelligence (source),
Digital banking trends: accessing bank accounts, all banked households
Every two years, the Federal Deposit Insurance Corporation (FDIC) conducts its National Survey of Unbanked and Underbanked Households. Although officially focused on unbanked households and the underbanked, the survey also includes much useful and interesting data on banked households. It most recently, in 2022, released its 2021 findings (source). Combining data from its 2013–2021 surveys yields the following picture of how U.S. consumers are accessing bank accounts:
From 2017 to 2019, mobile banking replaced online banking as consumers’ first choice when accessing their bank accounts. During that time, use of online banking declined as mobile banking app usage rose. From 2019 to 2021, mobile banking continued strong growth while online banking further declined, but only slightly. Bank tellers and ATMs/Kiosks both saw notable 2019–2021 declines.
Accessing bank accounts: mobile banking by income level
In addition to the preceding bank statistics for account holders in general, the FDIC household survey provides usage figures for specific demographic groups within the banked households population. Space won’t allow us to review the banking statistics for all the demographic categories the FDIC survey covers. So, since this is a personal finance site, we’ll look at how the personal finances (that is, the income) of consumers relates to their use of mobile banking.
Combining the statistics for five income levels provides a colorful chart that may not be quite as easy to read as the the chart for all households.
In this chart, each set of five bars presents the survey results for a single year, with each bar in the set representing one of the five income levels. The basic pattern we see is that mobile banking and online banking have grown for all income levels. We also see that the higher the income, the greater the adoption of the newer means of banking.
Fully banked households with the highest incomes, then, seem to be the most willing to conduct their financial lives using their mobile devices. This makes sense. People with the highest incomes are also the most likely to have demanding professional careers that make mobile banking and mobile payments essential substitutes for less efficient traditional banking. Bank customers with less demanding professional lives and lower incomes may find traditional banking sufficient for their needs, making digital banks and banking services less important.
Consumer attitudes and future trends
Results of the latest Chase Digital Banking Attitudes Study, the third such annual study, show that consumer preference for mobile banking remains strong and continues to grow. Chase reported in January 2023 (source, paragraph break removed):
App developers for the banking sector can expect their jobs to remain secure for the foreseeable future, it appears.
News of occasional digital exploits by criminals do not seem to be discouraging anyone from using the latest mobile banking apps and features. Some noteworthy mobile banking statistics coming out of the Chase study include:
- Surveyed consumers who use their mobile banking app at least once a month: 87%
- Consumers who prefer to do all their banking via their mobile app, by generation, from oldest to youngest:
- Boomers: 84% (lowest)
- Gen Xers: 90% (2nd highest)
- Millennials: 93% (highest)
- Gen Zers: 89% (3rd highest or 2nd lowest)
- Other mobile financial apps, such as person-to-person and mobile payments, no-touch payments using a mobile wallet, and credit monitoring are also seeing significant increases in adoption.
All in all, it appears that the future of the banking industry is mobile.
- You can now earn more interest on a deposit account than you’ve been able to earn for years. And interest rates are still trending upward.
- Online banking is so last decade. What’s in now is mobile banking. If, like the writer, you’ve resisted using a mobile banking app, you are definitely not one of the cool kids. You might as well be using a flip phone. Or maybe an abacus or slide rule.
- It’s still OK to visit a bank teller for complex transactions, however, at least for now (source).
- However you bank, you probably aren’t saving as much as you should. SuperMoney can help with that.
- As you shop around for the best savings or checking account, make sure you think about more than how good the mobile banking app is or isn’t. For instance, pay attention to account fees.
View Article Sources
- 2021 FDIC National Survey of Unbanked and Underbanked Households, plus 2013–2021 survey data — Federal Deposit Insurance Corporation
- 31 CFR § 566.318 – Transaction Account — Legal Information Institute
- Bank Failures in Brief – 2023 — Federal Deposit Insurance Corporation
- BankFind Suite: Find Annual Historical Bank Data) — Federal Deposit Insurance Corporation
- Bond Crisis — Schiff Gold
- Consumers Rely More and More on Mobile Banking, New Chase Study Finds — Chase
- Do We Really Need Big Corporations? — Mises Institute
- Economic Well-Being of U.S. Households in 2022 (May 2023) — Federal Reserve Board of Governors
- FDIC Statistics at a Glance: June 2023 Statistics — Federal Deposit Insurance Corporation
- Heightened Digital Adoption Prompts More Specialized Branches, Robust Apps — S&P Global Market Intelligence
- Household Pulse: The State of Cash Balances at Year End (Last Updated With December 2021 Data) — JPMorgan Chase
- Largest Commercial Banks (30 June 2023) — Federal Reserve Board of Governors
- Money Market National Deposit Rates — Federal Reserve Bank of St. Louis
- National Deposit Rates: 12-Month CD — Federal Reserve Bank of St. Louis
- National Deposit Rates: Interest Checking — Federal Reserve Bank of St. Louis
- National Deposit Rates: Savings — Federal Reserve Bank of St. Louis
- National Rates and Rate Caps — Federal Deposit Insurance Corporation
- Personal Saving — Federal Reserve Bank of St. Louis
- Share Insurance Coverage — National Credit Union Administration
- Survey of Consumer Finances, 1989–2019 — Federal Reserve Board of Governors
- The Average Savings Account Balance (09/2023 Archived Copy) — U.S. News & World Report
- Total Assets, All Commercial Banks — Federal Reserve Bank of St. Louis
- Transaction Account — Nasdaq
- X Post 2:18 PM 03 October 2023 — Peter Schiff
In addition to these external sources, readers may find multiple links to helpful SuperMoney pages in the article above.
David loves learning, doing research, analyzing data, and assessing arguments. Though he has two advanced degrees and some background in psychology, and though he’s learned a great deal in his work with SuperMoney, he considers himself an interpreter of experts, not an expert himself. He enjoys using what he’s learned, and what he’s still learning, to help readers make better saving, spending, and investing decisions.