Gen Z is emerging as a financial powerhouse, with data showing that they are 30% more likely to open a new savings account than other generations, according to YouGov’s U.S. Financial Trend Report.
This aligns closely with Plinqit’s recent State of Savings survey report, which found that Gen Z (ages 18-27) is the generation most likely to save more than 20% of their monthly household income each month at 47%, compared to 36% of Millennials (ages 28-43), 17% of Gen X (ages 44-59) and 18% of Boomers (ages 60-78). The survey, commissioned by Plinqit, was conducted online by The Harris Poll among over 2,000 U.S. adults.
Given their higher propensity to save, this raises the question: What factors influence their decision-making process when choosing where to stash their savings?
Gen Z, typically defined as individuals born between 1997 and 2006, grew up in an era marked by rapid technological advancements and unprecedented access to information. As a result, their financial decisions are likely shaped by a blend of digital preferences, societal values, and a pragmatic outlook on money management.
Tech-Savvy & Mobile First
One of the most defining characteristics of Gen Z is their affinity for technology. Having grown up in a digital world, they are highly comfortable navigating online platforms and mobile apps for financial management.
A significant majority of Gen Z prefers mobile banking over traditional methods, with 99% of them regularly using a mobile banking app for a variety of tasks, including tracking towards a savings goal, according to the latest Chase Digital Banking Attitudes Study. Banks that offer intuitive, user-friendly mobile apps are far more likely to attract Gen Z customers. For many, the ability to manage money through a smartphone app is no longer a luxury but a necessity.
This generation’s demand for convenience and mobile access to financial services is a key reason why many traditional banks are now investing in digital tools that support strong financial habits. Banks that don’t meet Gen Z’s technological expectations are quickly falling behind, while those that innovate — such as offering easy account setup via apps or integrating savings goals into mobile interfaces — are flourishing.
Personalization and Financial Education
While Gen Z is highly tech-savvy, they also value education and personalized financial guidance. Despite being open to taking risks, as shown by the 54% of Gen Z members who are comfortable with risk in their financial decisions, they still feel unsure about financial matters, according to YouGov data. Over 60% of Gen Z admit to being confused by financial topics, which is twice as much as Baby Boomers, which may be why they go outside traditional banking channels to save.
Surprisingly, Plinqit’s 2024 State of Savings report found that cash is still king for many young Americans, as 27% of Gen Z saves money in cash form, compared to 15% of Gen X and 13% of Boomers. Another 14% of Gen Z saves money by investing in cryptocurrency.
This is an area where a lack of knowledge about savings products may be hurting Gen Z.
The best high-yield savings accounts provide an annual percentage yield (APY) of 5% or more, which is over 10 times higher than the average rate of a typical savings or checking account, according to FDIC data. These accounts deliver significantly better returns than keeping cash on hand and are less risky than investing in crypto.
Therefore, financial institutions that offer resources like personalized savings plans, financial literacy tools, and easy access to advice are more likely to attract Gen Z customers and encourage them to stash their funds in a savings vehicle. Moreover, platforms that offer targeted advice or interactive educational content will appeal to this generation, helping them feel more confident about managing their savings, too.
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Competitive Interest Rates and Flexible Products
In the pursuit of building wealth, it appears that many Americans may be inclined towards savings accounts that offer competitive interest rates, based on Plinqit’s 2024 State of Savings report. The data show that the number one consideration Americans use to determine where to save their hard-earned money is the ROI an account can generate for them (41%). However, Gen Z differs slightly, as only 27% consider ROI when choosing an account.
Instead, the number one factor Gen Z considers when deciding how to save their money is recommendations from friends and family (37%), followed closely by how easy it is to understand the account/how it works (35%). This is where education, coupled with the right marketing tactics can help Gen Z adopt smarter savings habits.
Given the financial uncertainty that some younger individuals might face, particularly in potentially unstable job markets, savings products with attractive rates that still allow quick access to funds or options for automatic transfers could be appealing. Plinqit’s survey data shows that Gen Z values the ability to save towards multiple goals — such as travel (44%), emergencies (35%) and paying down debt (43%). Flexible products with attractive rates that allow Gen Z consumers to contribute to their many financial goals are valuable and can help them save smarter, not harder. The key is helping Gen Z consumers understand the value of high-yield accounts and how they differ from other types of savings vehicles so they can choose the one that serves their needs best.
Social Responsibility and Ethical Banking
Gen Z is also significantly influenced by values and ethics. Research from Deloitte shows that brands across all industries are increasingly being evaluated not only on the products they offer but also on their social impact. This trend extends to banking: According to First Insight’s 2020 State of Consumer Spending Study, Gen Z is more likely to choose a bank that engages in socially responsible initiatives, such as investing in renewable energy or supporting community projects.
With the climate crisis, social justice movements, and corporate accountability gaining prominence, many Gen Z consumers are likely selective about where they place their money. Financial institutions that align with causes important to Gen Z, such as sustainability and ethical business practices, may stand out in this demographic’s decision-making process.
This presents an opportunity for banks, too, especially for those that are willing to roll out product offerings under an affinity or digital side brand. For instance, a bank that wants to attract environmentally conscious consumers can use technology to create a digital brand that’s targeted toward that specific audience and generate deposits. With a minimal IT investment, that bank can focus on initiatives and product offerings that resonate with a target demographic, regardless of the parent bank’s geographic footprint.
The Future of Savings for Gen Z
With their tech-first mindset, value-driven financial preferences, and focus on flexibility, Gen Z is transforming the banking landscape. Traditional financial institutions are being challenged to adapt their offerings to meet this generation’s expectations or risk losing them to fintech startups and challenger banks.
As Gen Z continues to drive change in the financial industry, the question isn’t just about which bank they’ll choose but how they’ll redefine the very nature of savings and financial management in the digital age.