But what about storing money? Every child (and plenty of adults, too) fantasizes about finding someone else’s hoard of gold or cash, but how many people actually keep physical money in their home or safety deposit box? And what are the risks associated with the saving behaviors of modern people?
Gen Z, at least, is putting greater stock in cash reserves and novel saving methods such as cryptocurrency. This highlights an opportunity for banks and credit unions, which are hungry for deposits and eager to reach younger account holders.Savings Behaviors of the Young and Fabulous
Preferred saving methods vary by age and household income, as you would expect. Plinqit’s State of Savings 2024 Report reveals a lot about where Americans of all ages are holding their money and what they’re planning to use it for.
Compared to their elders (Gen X and Boomers), Gen Z is more likely to be saving for a vehicle (36%), home (32%), or medical expenses (21%).
Gen Z is also the most likely to say that they are holding savings in cash at home, and 14% of them say they’re holding money in cryptocurrency.
While the survey data doesn’t reveal exactly why Gen Z relies on cash and crypto, it does reveal a potential gap in their knowledge of the risks and benefits associated with different savings methods.
Helping Gen Z Achieve Their Goals
The first priority for saving money is to keep it safe (the Latin root of “save” means “safe, healthy” and balance that safety with convenience or return on investment – if your money can grow while it sits in safety, so much the better.
Only cash and crypto do not meet those criteria – at least not with the consistency and predictability of a high-yield savings (HYS) account.
It’s not that cash isn’t convenient or that crypto doesn’t have the potential to grow. But inflation is a silent parasite to liquid cash, eating at its value over time; and the value of cryptocurrencies can be painfully volatile.
Gen Z and Millennials are less likely to consider the return on investment for their savings strategy than Gen X and Boomers. That means they’re even more vulnerable to the downsides of cash and crypto.
If financial institutions want to win the deposits and loyalty of younger generations, they have a chance to step in and illuminate the path to saving more effectively.
HYS accounts are an excellent way to offer Gen Z convenient digital access to their money along with a guaranteed return on their FDIC- or NCUA-insured funds (compared to a CD or investment account, which are still better than crypto).
Thanks to Gen Z’s preference for the recommendations of friends, family, and influencers, financial institutions can reach them with carefully tailored marketing and social media content.
Become the Trusted Guide to Successful Saving
As digital natives, Gen Z does not use or think about banks and credit unions the way that older generations do. They still want to make smart choices with their money, but they’re taking cues from sources that may not have their best interests at heart (e.g., celebrities promoting fragile cryptocurrencies).
Custom-branded HYS accounts from Plinqit allow your institution to launch a completely new channel for garnering deposits without cannibalizing your other promotions or account holder relationships. Gen Z discovers a better way to save, made possible by you. It’s a match made on the Internet.
