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42% of Gen Zers Believe They’ll Have More Money Saved a Year From Now, While 41% of Millennials Think They’ll Have Less Debt Then

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It’s been more than a year since the U.S. had its first confirmed coronavirus case, but the latest MagnifyMoney survey is showing signs of financial optimism — especially among the youngest generations.

In fact, 42% of Generation Zers believe they’ll have a lot more money saved a year from now, while 41% of millennials think they’ll have less debt in a year.

Our survey asked more than 1,200 Americans about their finances — and where they think those finances will be a year from now. Here’s what we learned.

Key findings

  • A third of Americans (33%), including 42% of Generation Zers, think they’ll have a lot more money saved a year from now than they do today. Meanwhile, 37% of Americans, including 41% of millennials, think they’ll have less debt in a year.
  • Nearly a quarter (24%) of consumers say continued shutdowns are better for their wallets because they’re not spending any money. Meanwhile, 31% expect their finances to improve even further once vaccines are more widely available.
  • Some consumers, especially Democrats amid a White House administration change, are optimistic 2021 will lead to better savings account rates. Among Democrats, 46% believe APYs will increase over the next year, versus 35% of Republicans and 37% of independents.
  • More than one-third (34%) of Americans who earn $100,000 or more a year are benefiting from pandemic-related economic shutdowns to improve their finances. On the other hand, 45% of Americans who earn less than $35,000 say their finances have taken a hit during the pandemic due to income loss.

Generation Zers are most optimistic about having more money a year from now

A third of Americans (33%) believe they’ll have significantly more money saved a year from now. Generation Zers (42%) are particularly optimistic.

“COVID-19 has caused the world to come to a grinding halt, including expenses that Gen Z may have previously spent a significant amount of money on, like travel, concerts and dining out,” said Sarah Berger, MagnifyMoney’s millennial finance columnist.

These forced spending cutbacks give this younger generation more opportunity to save. Berger believes Gen Zers may be anticipating another round of economic impact payments that could boost their savings.

However, gender seemed to create an optimism gap: Nearly a quarter of women (24%) expect to have less money saved a year from now, compared with 16% of men.

The wage gap plays a role in men being more optimistic about their money, Berger said. If you make more money, you have more money to put toward saving and investing — which leads to financial security, which in turn leads to optimism.

Those in higher income brackets did express more financial optimism. In fact, 46% of those earning $100,000 or more think they’ll have a lot more money in savings this time next year, versus 28% of those who make less than $35,000. Meanwhile, a quarter of those in the lowest income bracket predict they’ll have a lot less saved, perhaps due to drawing from savings to cover expenses, versus 13% of six-figure earners.

Not everyone surveyed had such a positive outlook. A year from now, nearly half (48%) of respondents don’t think their savings will have changed much, while 20% think they’ll have a lot less saved.

Millennials are most optimistic about having less debt a year from now

Overall, 37% of Americans believe they’ll have less debt a year from now, with 41% of millennials reporting they think they’ll have less debt then.

The reason that millennials may be so optimistic about having less debt a year from now could stem to where they are in their working lives.

At this point, said Berger, millennials — especially older millennials — are entering their prime working years. Millennials may be anticipating making more income and having more money to put toward paying off debt.

Separately, only 13% think they’ll have more debt, including 16% of Gen Xers.

Nearly one-fourth of consumers say continued shutdowns better for family’s finances

One surprising discovery from MagnifyMoney’s survey was that almost a quarter (24%) of consumers reported that continued shutdowns are better for their wallets. Why? They’re not spending as much money as they used to due to these shutdowns.

A third of Gen Z respondents said a continued shutdown is better for their wallet, because it makes them spend less money, while 27% of millennials agreed.

Another 41% said a completely reopened economy would be better for their finances, while 35% don’t know which path forward is better for them financially.

More than 3 in 10 say their finances will improve post-vaccine

Even though nearly a quarter of respondents said continued shutdowns are better for their finances, more than 3 in 10 (31%) said their finances will improve after vaccines are widely available, with a suggestion that the end of shutdowns would allow them to return to work and/or make more money.

Optimism surrounding how the vaccine will affect finances is especially strong among those who lost their jobs or were furloughed (49%) and those who had their salaries or hours cut (47%). For them, a vaccine may signal a return to work and their pre-pandemic income levels.

39% expect better savings rates a year from now (including 46% of Democrats)

Some consumers are hopeful the new year will bring increased rates for savings accounts. In all, 39% predict rates will improve at least somewhat. Political party affiliation comes into play here, with Democrats feeling more optimistic about savings rate increases than Republicans.

As DepositAccounts founder Ken Tumin said, the health of the economy influences deposit rates. Not only does the economy drive the Federal Reserve’s interest rate policy, but it also impacts deposit levels and loan activity in the banking industry.

The stronger the economy, the higher the odds that there will be rising deposit rates.

“Democrats generally believe their policies are best for the economy, while Republicans generally believe the opposite,” Tumin said. “Thus, it makes sense Democrats are more optimistic about future deposit rates based on the changes that are taking place.”

Our expert on what’s ahead in 2021

Looking forward to next year, Tumin predicts that deposit rates will likely be close to where they are now. “In 2020, deposit rates have fallen to all-time lows at many banks and credit unions, but the interest rate declines are slowing,” Tumin said. “There are indications that deposit rates may be near a bottom in early 2021.”

Tumin believes that significant deposit rate increases are unlikely to occur within the next year. “Even if the COVID-19 vaccine program is extremely successful and the economy has a very strong recovery through 2021, the Fed will almost certainly keep its benchmark rate near zero in 2021,” Tumin said.

And even if the Fed holds rates steady, Tumin said a very strong economic recovery may have a small positive impact on deposit rates, especially on CD rates.

More than 1 in 5 have improved finances amid pandemic, with nearly 2 in 5 having more saved than before the crisis

Our survey also asked how people feel about their current financial life.

While 39% of respondents said their finances have stayed the same throughout the pandemic, an equal amount (39%) reported that their finances took a hit due to income either they or another member of their household lost during the pandemic.

Those affected the most earn less than $35,000 a year.

There was also an education gap: A third of bachelor’s degree holders said their finances have improved during the coronavirus crisis, versus 18% of those with some college education but no degree and 15% of high school graduates.

In general, 38% of consumers said they have more saved now than they did before the pandemic, while 33% said they have less money saved now.

Again, income levels and education levels continued to affect respondents. In fact, 59% of those with a household income of $100,000 or more increased their savings during the pandemic, compared with 28% of those earning less than $35,000. Meanwhile, only 17% of six-figure earners have decreased their savings, compared with 41% of those earning less than $35,000.

When it comes to education, 51% of college graduates increased their savings during the pandemic, versus 33% of those with some college and 29% with a high school education.

If you’re looking to boost your savings during the pandemic, Tumin recommends trying to automate your savings so that you regularly make contributions to your emergency fund and short-term goal funds. Creating good spending habits that will hopefully extend past the pandemic helps too.

“The pandemic has encouraged people to spend less,” Tumin said. “Many people have saved money by eating out less and cutting back on travel and other entertainment activities. I can see that contributing to these positive results.”


MagnifyMoney commissioned Qualtrics to field an online survey of 1,205 Americans, conducted Dec. 21-22, 2020. The survey was administered using a non-probability-based sample, and quotas were used to ensure the sample base represented the overall population. All responses were reviewed by researchers for quality control.

We defined generations as the following ages in 2020:

  • Generation Z: 18 to 23
  • Millennial: 24 to 39
  • Generation X: 40 to 54
  • Baby boomer: 55 to 74

While the survey also included consumers from the silent generation (defined as those 75 and older), the sample size was too small to include findings related to that group in the generational breakdowns.

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What Happens to Your Deposits in a Bank Failure?

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If your bank is insured by the Federal Deposit Insurance Corporation (FDIC) or your credit union is insured by the National Credit Union Administration (NCUA), your money is protected up to legal limits in case that institution fails. This means you won’t lose your money if your bank goes out of business.

Read on to find out what happens when a bank fails and how you can get your money back in that event.

How do you get your money back in a bank failure?

If your bank or credit union is about to fail, the government tries to find another institution to acquire the failing one. The purchasing institution then sets up new accounts for all the customers and it’s like you just transferred your insured balance over yourself.

Your direct deposits will automatically be rerouted to the other bank/credit union. For a short period of time after the failure, you will still be able to write checks using your old account, though the new one should soon give you replacement checks.

It is possible that the FDIC/NCUA will not be able to find an acquiring bank or credit union. In this case, they will send you a check to cover your insured deposits. The FDIC and the NCUA both aim to pay back the insured funds within a few days after your bank closes. You’ll get your insured deposits along with any interest you earned up to the day your bank failed.

Note that while this insurance covers funds in deposit accounts like checking accounts, savings accounts, money market accounts and CDs, it doesn’t cover stocks, bonds, annuities, life insurance or mutual funds — even if you bought these investments through a bank.

What if your deposits exceed FDIC insurance limits?

As mentioned, the FDIC and NCUA set a limit on how much they insure on deposits. They both cover up to $250,000 per depositor, per financial institution, per type of ownership. In most cases, this means that you can keep up to $250,000 at one institution and qualify for the insurance. The exception is if you have more than one type of legal ownership for your accounts. Some types of ownership include single, joint and part of a trust.

For example, if only you are depositing money into an individual account, you’ll be covered up to $250,000 at each bank. If you get married, you can open another joint account with your spouse and deposit an additional $250,000 per bank in a joint account while staying insured.

So what happens if you keep more than the FDIC- or NCUA-insured limits and your bank fails? In this case, the FDIC and NCUA will cover you up to the insured limit. After that, you’ll have a legal claim against the failed institution. The government will be in charge of selling off the failed bank’s remaining assets to pay people back as much as they can, but there is no guarantee you’ll receive all your deposits back.

Let’s say you have $300,000 in deposit with one bank and it fails. You’ll receive $250,000 back from the FDIC but whether you’ll receive any of the remaining $50,000 depends on whether the FDIC can sell off the failed bank’s assets and at what price.

What is bank failure? What happens when banks fail

If you have a checking account or a savings account, your financial institution doesn’t just keep all your money in a vault. While banks and credit unions hold onto some cash to process withdrawals, they know that depositors are unlikely to withdraw all of their money at once. As a result, they use some of the deposits to make investments, like small business loans or mortgages. When things go smoothly, the institution earns a profit on their investments while keeping enough cash to process withdrawal requests.

When the investments go poorly, it can lead to bank failures. For example, if a large number of borrowers go bankrupt and can’t pay back their mortgage loans to a bank, the bank takes a loss on the unpaid loans and may not have enough money to cover all their deposits. This is partly what caused so many banks to close after the 2008 housing collapse and financial crisis.

If a financial institution ends up losing too much on their investments, they could end up not having enough in assets to repay all their deposits. In other words, they owe more than they own. This is when the government considers a bank to have failed.

How often do banks fail?

On average, roughly seven banks go out of business each year. Four banks failed in 2020, only one fewer than in 2019. Impressively, no banks folded in 2018, although it was only the third year since 1933 without a single bank failure.

Compare that to the Great Recession, where 25 banks failed in 2008, 140 banks failed in 2009 and a whopping 157 banks closed in 2010 alone. As you can see in the graph below, however, even those numbers are dwarfed by bank closures in the late 1980s into the early 1990s.

Bank failures used to be a serious problem for consumers. If you look at pictures from back in the Great Depression, you can find photos of people lining up on the street to withdraw their money from a bank — a so-called “bank run.” If the bank failed before you withdrew your money, you would lose all of your savings.

To fix this problem, the government launched the FDIC in 1933. As we learned above, the FDIC backs up deposits so if your bank fails, the FDIC will pay back your money, up to their coverage limits. According to FDIC spokeswoman LaJuan Williams-Young, “No depositor has ever lost a penny of insured deposits since the FDIC was created in 1933.”

Tips to keep your money safe from bank failures

  • Only deposit with insured institutions: Before depositing your money with any institution, make sure they’re covered by the government. Banks covered by the FDIC should have a sign in their entrance saying their deposits are insured. Credit unions have a similar notice from the NCUA. You can also double-check an institution’s insurance status on the FDIC and NCUA websites.
  • Don’t exceed the insured deposit limits: The FDIC and NCUA both insure up to $250,000 per person per bank per type of ownership. If you deposit more money than the insurance limits, your funds are not insured and could be lost during a failure. You’d be safer opening a new checking or savings account at another bank/credit union so the deposits are all insured.If you’re close to the insurance limits and aren’t sure whether you qualify, the FDIC offers an online tool to help you check. Additionally, the FDIC offers a toll-free hotline that lets depositors ask questions about their coverage — simply call (877) 275-3342.
  • Consider using multiple banks/credit unions: When a bank or credit union fails, it’s more of an inconvenience than a serious problem as you should get your money back within a few days. But that’s still a stretch when you might need a bank account for cash or to pay bills. If you work with more than one bank/credit union, you’ll have a backup account ready to go just in case your primary institution fails. Want another checking account? These are the best online checking options available today.
  • Watch out for non-insured accounts: Banks and credit unions also offer investment products that are not insured. Investments like stocks, bonds and mutual funds can lose money, and those losses are not covered by the government. Don’t assume just because a product comes from a bank or credit union that it must be insured against loss.
  • Still keep your money at a bank or credit union: Despite all this information about bank failures, banks and credit unions are still a much safer place to keep your money than at home. If you hold onto large amounts of cash, you risk losing it to a robbery or fire. Homeowners insurance typically only covers the loss of cash to a few hundred dollars. That’s nowhere near the insurance limits at a bank or credit union.

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How to Get a Debit Card

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To get a debit card, you’ll generally need to open a deposit account. Debit cards are most commonly associated with checking accounts, but they may also come with a cash management, savings or money market account. The exception is a prepaid debit card, which is not tied to an account and only holds the money you load onto it.

This step-by-step guide on how to get a debit card covers the different types of accounts that may include a debit card and how you can get one.

How to get a debit card step-by-step

A debit card is a card you use to access the money in a certain account, like to make purchases or withdraw money from an ATM. Unlike credit cards, debit cards deduct transaction amounts from the account immediately. Follow the steps below to learn how to apply for a debit card.

Step 1: Choose your account

First, you need to decide on the account that’s right for you. Read up on account fees and features so you can choose the best one for you. If it’s a checking account you’re interested in opening, look for low-fee or fee-free checking accounts with low minimum balance requirements. Also seek out convenient features, such as mobile banking and online bill pay.

We will cover the differences between debit card accounts in more detail below.

Step 2: Gather necessary documents

If you’re opening a bank account, you’ll likely need to provide two forms of identification. These can include a passport, driver’s license, state identification card, birth certificate or Social Security card. Some banks will allow you to provide one form of identification and a bill addressed to you.

Step 3: Bring funds to deposit

Most banks will require a minimum opening deposit to open an account, which tends to range from $25 to $100. This money goes into your account, and you can use it immediately. If you’re opening an account online, you can set up an online transfer from another account.

Step 4: Open an account

Nowadays, you can apply for most bank accounts online, even if it’s not for an online-only account. Smaller, more local institutions may still require you to visit a branch in person to open a debit card account.

Step 5: Request a debit card and load it with funds

Some accounts automatically come with a card, while others require that you request it (more on these account types below). You’ll also want to fund your account, which can usually be done with cash or check, or through another bank account.

Step 6: Activate your debit card

Once you receive your card, you’ll be asked to activate it and set a PIN — a personal identification number that acts as a security code — so that it can be used at an ATM. Make sure to do this immediately. Typically, you can activate the card online, on the bank’s mobile app or by calling the phone number listed on the front or back of the card. After that, your card is ready to use.

How to get a debit card with different bank account types

As you learned in the first step above, you need to choose which account you need to go along with your new debit card. Each account type treats debit cards differently, so you’ll want to familiarize yourself with these features before opening an account.

Account typeDebit card features
Checking account
  • Automatically issues a debit card
  • Unlikely to have a limit on the number of debit card transactions
  • Potential to earn rewards
Savings account
  • Doesn’t always come with debit card
  • May have to request debit card
  • Federally limited to six outgoing transactions per month
Money market account
  • More likely than a savings account to have a debit card
  • May have to request debit card
  • Federally limited to six outgoing transactions per month

Checking account debit card

The accounts most commonly associated with debit cards are checking accounts, which almost always automatically include a debit card to provide easy access to the funds in your account. Checking accounts are a good way to safely store money you plan to use in the near future.

Some banks offer a bonus for opening a checking account, and there are also ones that earn rewards. If you’re after debit card bonuses and rewards, keep in mind that these accounts often come with higher fees.

Your local credit union is also a great option for a checking account — and debit card — with minimal fees. Plus, it’s smart to build a relationship with a credit union as you might want to use it for other financial needs in the future, such as a low-interest credit card, personal loan or mortgage.

Savings account or money market account debit card

You can get a debit card with a savings account, although sometimes you will have to request the card rather than have it issued automatically at account opening. Money market accounts are savings accounts that are more likely to issue a debit or ATM card.

However, despite the convenience of a savings account debit card, you’ll need to pay close attention to your transactions. It may not be ideal for most people since Federal Reserve Regulation D limits savings accounts to six transactions per month. Exceeding that limit could result in fees or your account being closed.

Coronavirus pandemic update: In response to the pandemic, the Federal Reserve amended Regulation D to eliminate the six “convenient” withdrawals limitation, effective on April 24, 2020. This amendment allows consumers to more freely access their savings deposits and allows institutions to suspend enforcement of the regulation.

How to get a prepaid debit card

Unlike a regular debit card, a prepaid debit card isn’t linked to a bank account. Instead, you can use only the money that’s currently loaded onto the card. Prepaid debit cards are often useful for people who have difficulty getting approved for a bank account. They usually can’t be overdrawn, making them a good option if you’re prone to overdrafts.

You can purchase and reload prepaid debit cards at many grocery stores, convenience stores and drugstores using cash or check — and sometimes direct deposit. Many come with activation, monthly, ATM and deposit fees, but the best prepaid debit cards minimize those added costs. You can even find a few prepaid debit cards that offer rewards.

How to get a debit card as a teenager

If you’re a teenager or a parent of a teen trying to get a debit card, there are several options available. It’s best to look for checking accounts for students or accounts for kids, as these are made for joint ownership between the minor and adult, tend to come with extra features for money management education and often don’t allow overdrafts for further financial safety. The age at which you can get a debit card may vary depending on the account.

How to get a debit card online

Online banks operate without brick-and-mortar locations. Because they have fewer overhead costs, high-yield online checking accounts often have higher APYs and lower fees than traditional banks. Just like regular checking accounts, they still come with debit cards and the same level of safety and security when issued by an FDIC-insured institution.

Traditional banks — like Chase, Bank of America and Wells Fargo — have also expanded into the online world, making most of their deposit accounts available and accessible through their websites. This makes it easier and more convenient to get a debit card online without switching to an online bank.

You can also often apply for a prepaid debit card online, which follows similar application steps as those we outlined above.

Debit cards: What to watch out for

While you shop around for the right debit card to open, there are potential risks to keep in mind before you sign up for an account. Fees and fraud are two such problems that can jeopardize your money, so you’ll want to keep an eye out before and after you have your debit card.

Debit card fees: While debit cards are secure and convenient, they can also rack up fees if you aren’t careful. Pay close attention to ATM fees, which can be charged by both your card issuer and the ATM owner. Most debit cards come with a network of ATMs you can use fee-free, so stick to those. Overdraft fees can also add up quickly if you don’t pay attention to your balance. To avoid these altogether, ask your bank to set up your account so transactions that would overdraw your account are denied.

Debit card fraud: Fraud is always a threat with debit cards, from data breaches at places you’ve shopped to ATM skimmers, who use hidden devices to skim your card information from an ATM you’ve used. With credit cards, you’re only liable for up to $50 of fraudulent charges, but with debit cards you can be held liable for $500 or more.

Keep your card information safe by visiting easily visible ATMs in high-traffic areas and always covering your hand while you enter your PIN. Keep your account information and PIN private, and avoid disclosing it over the phone or through email. If you shop online, don’t make purchases while connected to public Wi-Fi.