Research shows that having more than one checking account has become more popular these days. This is true especially among Millennials, of whom 42% have two or more accounts. In fact, among consumers who consider a digital bank to be their primary bank, 42% have more than one checking account, and half of them have additional accounts with traditional banks and credit unions.
- Over the past three years, the percentage of consumers opening an account with a digital bank has grown from 6% in 2017 to 18% in the second quarter of 2020.
- Credit unions’ share of accounts declined from 18% to 8%, and among community banks, the drop was from 6% to 2%.
Why are consumers opening these accounts with digital banks? Payments and avoiding fees top the list.
While roughly three in 10 consumers with an account from a digital bank said they wanted an account that doesn’t charge a monthly fee and a quarter are looking to avoid overdraft fees, 37% said it was to get a debit card to pay for a variety of things, and roughly a third said it was to make payments for a specific expense or set of expenses.
Don’t overlook the generational differences here, however, as they relate to:
- Monthly account fees. Nearly half of Baby Boomers with a second account from a digital bank were looking to avoid paying a monthly fee, versus a quarter to a third of the members of the other generations.
- Overdraft fees. Many more Millennials and Gen Xers than Gen Zers and Boomers were looking to avoid overdraft fees.
- Account-related rewards. About a quarter of Gen Xers were looking for rewards in contrast to just 3% of Baby Boomers.
- Early access to paychecks. One in five consumers between the ages of 21 and 55 were looking for early access to their paychecks.
- Interest rates. About one in five Gen Xers with a secondary account from a digital bank was looking for higher interest rates, more than the other generational cohorts.
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