New research shows a near-record surge in Americans choosing to stash their savings in cash reserves instead of traditional checking and savings accounts.
New analysis from the JPMorganChase Institute shows Americans’ cash reserves are on the rise, thanks to a shift toward brokerage accounts, money market funds, and CDs, the Associated Press reports. While traditional checking and savings balances “remain low with a flat-growth trajectory,” (even after adjusting for inflation), overall reserves have been climbing since mid-2024, inching closer to historic growth levels.
“Families across many income bands are now seeing a turnaround in their total cash,” said Chris Wheat, president of the JPMorganChase Institute.
The analysis found that households earning under $35,000 a year saw their total cash balances grow at an annual rate of 5% to 6%. The lowest-income households typically keep just over $1,000 in checking and savings, while the wealthiest hold median balances topping $8,000.
The disconnect between strong consumer spending and stagnant checking and savings growth reflects today’s high-interest-rate environment, where more people are moving their money into yield-generating accounts like money markets and CDs to actively manage their cash flow and invest for the long term.
Wheat warned that this shift could be temporary, noting the institute doesn’t yet have enough data to know if the trend will last, and it has
been “hard to square the circle” of consumer spending staying strong despite the lack of growth in checking and savings accounts. Most notable is that people aren’t rushing to gamble their savings in the stock market. Instead, they’re strategically parking their cash in places that offer flexibility and a little extra income.The report paints a deeper picture of how households are adapting, taking advantage of higher interest rates, staying flexible, and redefining what
“saving” looks like. While traditional bank balances remain lower than expected, when factoring in investment platforms and other cash-like accounts, Americans seem to be managing today’s economic climate far better than it might appear.RELATED CONTENT: Fed Student Loan Forgiveness Tracking Paused Amid System Turmoil, Layoffs