“It’s so very important to build up savings, even if it’s just couple hundred, and park it for emergencies,” said Stephen Brobeck, executive director of the CFA, and author of the report, “Savings Accounts: Their Characteristics and Usefullness.”
Roughly 16 million low- to moderate-income (LMI) households held more than $13 billion in basic savings accounts nationwide in 2010, with an average balance of $800, the report indicates. Individuals qualify as LMI if their income is less than $35,600 annually, representing the bottom 40 percent of all U.S. household incomes.
But the number of LMI individuals who save money in a basic savings account pales in comparison to the number of LMI individuals who don’t.
In 2010, according to the report, 23 million LMI households were without a savings account of some kind.
“All households need the ability to pay for unexpected expenses ranging from car repairs to medical and dental bills to traffic tickets,” the report reads. “For most LMI households, basic savings accounts potentially represent the most useful source of funds for making these payments.”