The American Savings Gap: Who Is Saving the Most and Who Needs to Catch Up? | Banking Advice
Key Takeaways
- Census data shows that nearly 95% of households have a checking account, but just about 77% have a savings account.
- Households with a savings account vary widely by state.
- A savings account is a way to earn interest while putting away funds for emergencies and future goals.
Recent data from the United States Census Bureau shows that nearly 95% of households have a checking account, while nearly 77% had a savings account in 2024, the most recent year statistics were available. That number drops even farther when looking at the data by state, showing a major gap across the U.S. These are the seven states with the lowest percentages of households with a savings account.
What Is a Savings Account?
A savings account is a financial vehicle that allows you to put money away and earn more interest than you would with a checking account. Savings accounts can also be helpful for separating money that you want to put away from money that you spend. Some states may have lower percentages of savings accounts because their populations may not have as much income or may not understand the benefits. Here’s a breakdown of the states, their household income and poverty rates, which can affect the ability to save.
Households in These 7 States Have the Lowest Percentage of Savings Accounts
1. Arkansas
Arkansas has the lowest savings participation rate, as only 51.9% of households have a savings account. In contrast, Utah has the highest percentage of households with savings accounts at 91.8%. One factor that can affect savings rate is income. Census data for the state of Arkansas shows that the estimated median household income as of 2024 was $62,106. That’s significantly below the median income in the U.S., which is $81,604. Additionally, 15.5% of Arkansas residents live in poverty, in contrast to 12.1% in the U.S. overall.
2. West Virginia
Jumping several percentage points higher than Arkansas, 62.4% of households in West Virginia have a savings account. However, the estimated median household income as of 2024 in West Virginia is lower, coming in at $60,798. West Virginia has a also has a higher poverty rate of 16.7% compared to Arkansas.
3. Louisiana
About a percentage point higher than West Virginia, 63.6% of households in Louisiana have a savings account. The estimated median household income as of 2024 was also very close to that of West Virginia’s, coming in at $60,986. Additionally, the poverty rate is much higher than the national average, at 18.7%.
4. Mississippi
Around the same percentage rate of Louisiana, 63.8% of Mississippi households have a savings account. The estimated median household income as of the 2024 comes in just under Louisiana’s at $59,1274. The poverty rate is higher than the national average as well, at 17.8%.
5. Kentucky
The number of households with a savings account in Kentucky is just a tiny jump higher than that of Mississippi, at 64.5%. In Kentucky, the estimated median household income is higher at $64,526, while the number of residents in poverty was lower at 15.6%.
6. Missouri
Jumping a couple of percentage points, 67.9% of Missouri households have a savings account. The estimated median household income in Missouri is also higher at $71,589 and the poverty rate in the state is a much lower 12.3%.
7. Alabama
With a slightly higher percentage rate than Missouri, 69.7% of Alabama households have a savings account. However, Alabama has a lower estimated median household income of $66,659 as of 2024 and a higher poverty rate of 15.2%.
The Unbanked and Underbanked
The Census data outlines which states are lagging behind and highlights the overall percentage of residents with a savings account. Though the states listed have the lowest percentages, it’s important to consider the unbanked and underbanked as well.
According to The 2023 FDIC National Survey of Unbanked and Underbanked Households, the most recent survey available, about 5.6 million households in the U.S. are unbanked. This equals 4.2% of households without a checking or savings account from a bank or credit union.
The FDIC survey also shows that 19 million households, or 14.2% of all U.S. households, are underbanked. Underbanked refers to households that may have a checking and savings account but use nonbank products such as nonbank money orders and payday loans.
One major nuance is the difference in banking access and wealth by race. Black, Hispanic and Native Americans have unbanked rates that are several times higher than white households, despite making progress in recent years.
Federal Reserve data from the 2025 Survey of Consumer Finances also shows that white families typically have nine times as much wealth as Black families. Compared to Hispanic families, white families have four times as much wealth.
Additionally, the data shows that liquid wealth (cash and funds in a checking and savings account) increased for Hispanic families and actually dropped for Black families when comparing 2025 data to 2012 data.
Why Savings Accounts Are Important
Saving is one of the main pillars of financial wellness. A savings account is a way to lessen the impact of an unexpected expense or emergency. It can also help finance your dream vacation or make a major purchase without incurring debt.
“I think if someone has short-term financial goals that they want to achieve within the next five years, and they have the ability to save, a savings account could be a good vehicle for them to use for this purpose,” says Roger Ma, a certified financial planner and founder of lifelaidout.
Savings accounts are a great option for storing emergency funds while earning interest.
“The benefits of a savings account include separating money for savings from money for your day-to-day living, to prevent you from accidentally spending money for your savings goals,” says Ma. “In addition, savings accounts often have higher interest rates than checking accounts, particularly high-yield savings accounts. So simply moving money from a checking account to a savings account could ensure your money is still working for you.”
How to Start Saving
The first step is to find and open a savings account. If you don’t have a savings account or want to switch accounts, look at:
- APY. The annual percentage yield on your savings account directly affects how much interest you can earn on your deposits. Shop around to find the most competitive rates.
- Mobile banking. According to the FDIC survey, in 2023 nearly half of banked households used mobile banking as the primary way to access their accounts. Look for highly-rated mobile banking apps for accessibility.
- Fees. Check for potential fees like monthly maintenance or minimum balance fees that can take a bite out of your savings.
In addition, make sure the savings account you choose comes with certain protections. FDIC protection is a must, says Jason Fannon, certified financial planner and senior partner of Cornerstone Financial Services.
It’s never too late to open a savings account. Once you do, you’ll want to set up automatic transfers between your checking and savings accounts.
“For those that want to save money, whether that’s a savings account or another investment-type vehicle, I think the automated strategy is what we try and encourage clients to do from the checking account,” Fannon says. “It’s just like a bill. Just think of it as a utility bill or a car payment. You would transfer that money out into the savings account, and you’re paying yourself, essentially.”
