WASHINGTON (CNNMoney.com) -- Millions of low and middle-income Americans don't have a savings account, but a group of large banks and consumer advocates kicked off an effort Thursday to change that.
The Financial Services Roundtable and the Consumer Federation of America have teamed up to offer consumers cash incentives to sock more money away for a rainy day.
More than two-thirds of families making less than $19,000 a year lack savings accounts, according to a new Consumer Federation of America analysis of 2007 federal reserve financial data. More than half of families making up to $34,000 also have yet to open savings accounts.
Some 42% of middle-income families making between $34,000 and $54,000 don't have savings accounts. And 20% of those making more than $89,000 also don't have savings accounts.
"There really is a savings crisis and it ranges from low to middle class families," said Ron O'Hanley, president and chief executive of BNY Mellon (BK, Fortune 500) Asset Management. "They blow out a tire in their car, they need to take care of a leak in the roof, but they have no money to handle that."
Of course the Financial Services Roundtable and the Consumer Federation of America are often at odds when it comes to advising Congress how to regulate financial products. They're currently slugging it out over the creation of a Consumer Financial Protection Agency.
But together they're highlighting new and existing savings programs that literally pay consumers to save.
"I think we have a responsibility to bank the unbanked, and some days we do a better job at that than others," said Steve Bartlett, chief executive of the bank lobbying group. "This is targeted at tens of millions of families that have a bank or credit union but don't have a savings account."
To that end, 16 major banks have recently lowered minimum balances on savings accounts, making it easier for people to save without having to worry about getting socked with low balance fees. US Bank has no minimum savings account balance, while Regions has a $5 balance and Bank of America has a $25 minimum balance.
In the past, the standard minimum savings account balance could be as much as a few hundred dollars, but these banks have lowered their minimum balances to between $25 and $50, O'Hanley said.
Additionally, several banks offer or will start offering financial incentives for savers.
*In April, BBVA (BBVA) Compass will start a program that annually matches up to 6% of the funds that customers have automatically transferred into savings each month.
*Bank of America (BAC, Fortune 500) rounds up debit card purchases to the nearest dollar and transfers that change into savings. Additionally, the bank matches a portion of the funds that were rounded up and transferred into savings, although the match is capped at $250 a year.
The Financial Services Roundtable also wants to encourage its bank members to let customers transfer money from checking to savings for free, and said that each of the group's 21 largest banks already do so.
Detroit's city-owned art collection is worth between $452 million and $866 million, far less than most expected, according to a preliminary estimate by Christie's auction house. More
Two million passwords have been stolen, compromising accounts at Facebook, Gmail, Twitter, Yahoo and ADP. More
Illinois lawmakers voted Tuesday to approve a landmark pension reform package that will cut retirement benefits for teachers, nurses and other retired and current state workers. More