If Americans can't afford a $400 emergency, then they can't afford the risk of switching banks. In paycheck to paycheck living, the large bank is both a bedrock of an otherwise unstable living condition and an Overlord you dare not cross.
If they can’t afford a $400 emergency then they aren’t going to be losing that much interest, like $16 bucks a year.
If they have a small cushion of 1k to 5k, then they should definitely consider keeping their retail bank but also opening a high yield saving. No switching banks needed.
Is it common to bank only with one bank in the U.S?
For low-middle class, yes. For upper middle class+, it depends.
My bank is also where I also get home, auto, and life insurance. I actually go out of my way and get auto loans from them even when the dealer offers lower interest rates. Because the bank has been good to me over a 30 year period. Yes, I have been a customer that long.
Given the mediocre or non existent interest rates of the last 10+ years, why is anybody keeping lots of cash around unless it’s rainy day funds or parked awaiting market improvement? One has to beat inflation to get anywhere and bank interest isn’t going to do it.
> “People don’t think critically about financial decisions,” Mr. Zimmerman said.
What do you suggest to beat inflation?
Long term: IVV, VOO, or SPY ETFs are the ol’ reliable of invest and forget about it.