The US savings rate measures what percentage of income people put aside instead of spending

The savings rate is the percentage of after-tax income that Americans don't spend. If you earn $1,000 after taxes and save $100, your personal savings rate is 10%. When economists talk about "the US savings rate," they mean the average across all households, which the Federal Reserve tracks monthly.

The national savings rate has moved between roughly 3% and 35% over the past two decades, depending on what's happening in the economy. During the 2008 financial crisis, people saved more because they were worried. During the pandemic, the government sent stimulus checks and people couldn't spend on travel or restaurants, so the rate spiked. In normal times, it tends to sit somewhere between 7% and 12%.

Why does this number matter to you? It shows whether Americans as a group are building financial cushions or living paycheck to paycheck. It also affects interest rates on savings accounts, because when people save less, banks have less money to lend out, which changes what they offer savers.

Key Takeaways

  • The US savings rate is the percentage of after-tax income that people save rather than spend, and it varies month to month based on economic conditions.
  • The national average has ranged from 3% to 35% in recent decades, with most years falling between 7% and 12%.
  • Savings rates rise during recessions and economic uncertainty, and fall when people feel confident about their jobs and the economy.
  • Your personal savings rate is separate from the national average and depends on your own income, expenses, and financial goals.
  • Higher national savings rates can lead to better interest rates on savings accounts, because banks have more deposits to work with.

Why the savings rate changes with the economy

The savings rate is not stable because people's behavior changes when their circumstances change. During recessions, when job losses are common, people save more out of fear—they're building a buffer in case they lose income. During boom times, when jobs feel find and wages are rising, people save less because they feel confident spending.

Government action also moves the needle. When the government sent stimulus payments during the pandemic, people received money they hadn't earned through work. Many saved it instead of spending it when ready, which pushed the national savings rate to historic highs—around 33% in April 2020. As those savings ran out and inflation made everyday items more expensive, the rate fell again.

Personal circumstances matter too. A household with a stable job and no debt might save 20% of income. A household with medical bills or irregular income might save nothing, or go into debt. The national rate is an average of all these different situations.

How savings rates affect the interest you earn

When the national savings rate is high, banks have more deposits sitting in accounts. More deposits mean banks have more money to lend out, which typically means they can afford to offer lower interest rates on savings accounts—they don't need to compete as hard for your money. When the savings rate is low, banks have fewer deposits and may raise rates to attract savers.

This is one reason why savings account rates change even when the Federal Reserve's interest rate stays the same. The Fed sets a target rate that banks use for lending to each other, but the rates banks offer you on savings accounts depend partly on how much money they have sitting in deposits.

The relationship is not perfect—banks also consider competition, their own costs, and what they expect to happen next in the economy. But in general, a lower national savings rate can mean better rates for savers, because banks are competing harder for deposits.

The difference between national savings and personal savings

Your personal savings rate is only about you and your household. If you earn $3,000 a month after taxes and save $300, your rate is 10%. That number doesn't change based on what other Americans are doing. It's a tool to track whether you're meeting your own financial goals.

The national savings rate is a snapshot of the whole country. It includes people who save 50% of their income and people who save nothing. It includes retirees living on fixed incomes and young professionals building wealth. It's useful for understanding broad economic trends, but it doesn't tell you whether your own savings rate is healthy.

A financial advisor or budget guide might suggest a target personal savings rate—often 10% to 20% of after-tax income. But that target depends on your age, your goals, and your situation. Someone saving for retirement at 25 might aim higher than someone at 55 who already has savings. Someone with medical debt might focus on paying that down before building savings.

Where the savings rate data comes from

The Federal Reserve publishes the official US savings rate each month, based on data from the Bureau of Economic Analysis. The BEA calculates it by taking total personal income, subtracting taxes and spending, and dividing what's left by after-tax income. The number comes out about a month after the month it measures, so the data is never completely current.

Different organizations sometimes report slightly different numbers because they measure savings differently. Some include retirement account contributions, others don't. Some count the value of homes people own, others focus only on cash and liquid savings. When you see a savings rate reported in the news, it's worth checking which definition they're using.

The monthly data is volatile—it can swing 2 or 3 percentage points from one month to the next based on one-time events like tax refunds or stimulus payments. Economists usually look at the three-month average to see the real trend.

How your savings rate compares to others

You won't find a public database of individual savings rates, but surveys sometimes ask people what percentage of income they save. These surveys show wide variation: some households save more than 30% of income, while others save nothing or go into debt. The median is usually lower than the mean, which means half of households save less than the average.

Age matters. Younger workers often save less because they're paying off student loans or building a household. Middle-aged workers often save more because their income is higher and their children are older. Retirees often save very little because they're living on accumulated savings and Social Security.

Income matters too. Higher-income households can save a larger percentage because their basic expenses take up a smaller share of what they earn. A household earning $200,000 a year might save 25% after paying taxes and living expenses. A household earning $40,000 might save 5% or nothing, even though both are being responsible with money.

What a healthy personal savings rate looks like

There's no single "right" savings rate because it depends on your situation. A common guideline is to save 10% to 20% of after-tax income, but that assumes you have no debt, stable income, and no major expenses coming up. Your situation might be different.

A more useful approach is to work backward from your goals. If you want to retire at 65 with a certain amount saved, a financial planner can tell you what percentage you need to save now. If you want a three-month emergency fund, you can calculate how much that costs and how long it will take to save it. If you're paying off debt, your "savings" might be the extra money you put toward that debt instead of spending it.

The key is knowing your own number and tracking it over time. Whether you're saving 5% or 25%, what matters is that you're moving toward your goals and building the financial cushion you need.

Frequently Asked Questions

Is the US savings rate higher or lower than other countries?

The US savings rate is typically lower than many developed countries. Germany, Japan, and South Korea often have national savings rates above 15%, while the US usually sits between 7% and 12%. This reflects different cultural attitudes toward saving, different tax systems, and different social safety nets. Countries with less generous government retirement programs often have higher savings rates because people save more for their own retirement.

Why did the savings rate spike during the pandemic?

The savings rate hit historic highs in 2020 and 2021 because of three things at once: the government sent stimulus checks, many people couldn't spend money on travel and restaurants because of lockdowns, and people were worried about job security. As stimulus money ran out and the economy reopened, the rate fell back to normal levels. The spike was temporary and didn't reflect a permanent change in American saving habits.

Does a higher national savings rate mean better savings account interest rates?

Usually, but not always. A higher savings rate means banks have more deposits, which can let them offer lower rates because they don't need to compete as hard. But the Federal Reserve's interest rate decisions matter more. When the Fed raises its target rate, banks typically raise savings account rates even if the national savings rate is low. The two move together more often than they move apart.

How do I calculate my own savings rate?

Take your after-tax income for a month or a year, subtract everything you spent, and divide what's left by your after-tax income. If you earned $4,000 after taxes and spent $3,600, you saved $400, which is a 10% savings rate. Track this over several months to see whether you're moving in the direction you want.

Can I have a negative savings rate?

Yes. If you spend more than you earn, you're going into debt, which is a negative savings rate. This happens when people use credit cards, take loans, or draw down savings to cover expenses. It's not sustainable long-term, but it's common during job loss, medical emergencies, or other temporary hardships. The goal is to get back to a positive rate once the crisis passes.