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Savings account usage by low- and moderate-income people in the Chicago Metropolitan Area

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  • Robin G. Newberger

Abstract

Holding a savings vehicle with mainstream financial institutions carries several benefits including asset building opportunities, secure storage of income, a cushion against unforeseen financial events and the ability to establish or maintain a positive credit history. To better understand the demand for savings products among low- and moderate-income (LMI) people, the Federal Reserve Bank of Chicago sponsored a series of savings behavior questions in the 2001-2002 Metro Chicago Information Center?s annual household survey. Our findings offer evidence that lower-resource consumers accumulate savings, identify specific savings goals and add to their savings on a regular basis. As such, they demonstrate demand for savings products. We also observe that relative to moderate-income respondents, the lowest-income respondents are less likely to hold savings accounts and to identify a savings goal.

Suggested Citation

  • Robin G. Newberger, 2004. "Savings account usage by low- and moderate-income people in the Chicago Metropolitan Area," Profitwise, Federal Reserve Bank of Chicago, issue Jan, pages 2-9.
    • Handle: RePEc:fip:fedhpw:y:2004:i:jan:p:2-9
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    File URL: http://www.chicagofed.org/digital_assets/publications/profitwise_news_and_views/2004/pnv_january2004.pdf
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    Keywords

    Savings accounts;

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