Americans are hoarding money in checking accounts

[11C1P]

I find their lack of mentioning PM's as an investment option, disturbing! :sad$:

http://www.msn.com/en-us/money/mark...counts/ar-BBEquvw?li=BBnb7Kz&ocid=mailsignout

Cash — or something close to it — is king again.

Enjoying a steady job market but reluctant to spend freely due to economic uncertainty, a wide swath of middle-class Americans are hoarding money in banks.

Total bank deposits rose 6.6% last year to $10.7 trillion, extending steady growth seen in recent years, data from the Federal Deposit Insurance Corporation show.

Deposits measured as a percentage of bank assets are 77.6% in the first quarter of 2017, the highest since 2006, according to data economic research firm Moebs Services.

And Americans love liquidity. They hold about $2 trillion in checking account now, says Mike Moebs, CEO of Moebs Services, which provides research and consultancy services to financial institutions. The average U.S. checking account deposit is about $3,600, climbing from $1,000 in 2007, he says.



Much of deposit growth surely has to do with the resilient U.S. economy that continues to expand from the depths of the financial crisis. Steady paychecks are the industry's best friend.

"Incomes are up and people are choosing to deposit (their money) rather than increase spending," says Paul Merski, group executive vice president of congressional relations and strategy for the Independent Community Bankers of America.

A dearth of investment options is also driving the hoarding behavior. Only about half of Americans are invested in the stock market, according to Gallup. And other common options, such as certificates of deposits and savings accounts, are offering interest rates that are barely above those of checking accounts.
While saving is deemed a personal finance virtue, would-be shoppers holding tightly onto their budgets can also be a drag on the economy. U.S. consumer spending was relatively flat, up only 0.1% in May, the latest data from the Commerce Department show. Retail and auto sales have also been sluggish.

 

[singleshot]

Everything goes in cycles.
I remember growing up in the 50's, being told to "save your money". Saving was big back then.
People are not stupid, they may be slow to recognize what is happening but when they do, they react in their own self interest.
Maybe this will spur more discontent about monetary policy, budgeting, spending, inflation and taxation fraud.
One can only hope.

 

[drAGonfly47]

Everything goes in cycles.
I remember growing up in the 50's, being told to "save your money". Saving was big back then.
People are not stupid, they may be slow to recognize what is happening but when they do, they react in their own self interest.
Maybe this will spur more discontent about monetary policy, budgeting, spending, inflation and taxation fraud.
One can only hope.

No WAY !

They are all waiting for Bitcoin, ethereum, litecoin, & ripple to drop just a little closer to reset level.
Then... they are all in .


Bwahhh haaa haaa !!

 

[pmbug]

... Only about half of Americans are invested in the stock market, according to Gallup. ...

The whole gist of the article is that Americans are by and large choosing to stay in cash rather than invest. Sure does explain how the stock market keeps going up and up, doesn't it?

 

[pmbug]

Story Highlights

• Stock ownership has dropped to 54% from 62% since financial crisis
• Most major subgroups show lower ownership rates
• No decline among upper-income, older Americans

WASHINGTON, D.C. -- U.S. stock ownership remains below where it was before the financial crisis in the fall of 2008, with declines since then evident among most major subgroups of the population. Adults aged 65 and older and those with an annual household income of $100,000 or more are two groups whose ownership rates have held firm.
...

More: http://www.gallup.com/poll/211052/s...e=MARKETPLACE&g_medium=topic&g_campaign=tiles

 

[rblong2us]

The opening posts article doesnt really sit with the claims that most americans have less than $500 in savings


http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings/index.html

 

[pmbug]

rblong - your article talks about "savings accounts". Article in OP talks about money in "checking" and "money market" accounts. They are different types of accounts over here and thanks to ZIRP policy, there is absolutely no reason to park much money in a savings account vs. a checking or money market account. Savings accounts aren't paying enough interest to justify the lack of accessibility they entail.

 

[rblong2us]

Fair point Bug

Easy to make a case for either everyones got loadsamoney, or they are struggling to make ends meet.

I meet more of the 2nd type these days but then I would rather be at a hippy festival than a business convention (-;

 

[11C1P]

I think it's smart to keep a bit of money in a bank account, but only enough to cover a few months worth of bills. I think the fact that so many people keep it in a checking account, not even a savings account (although w/ interest rates right now, not as big of a deal as it was 20+ years ago) shows how few people understand about any kind of investing or even simple interest. If they KNOW it's a short term situation, then it probably doesn't make much difference, but if they plan on having it parked for more than a few months a CD or MM would still be way better than a checking account. Also setting up an online account for investing is super simple too. Now of course the smartest people know that PM's are a great investment, especially if you have a bunch of money sitting around in an account and aren't planning on using it soon. Recent events that have happened in Cypress, Greece, Argentina, Venezuela, etc. show that the govt will be more than glad to seize your bank kredits for the kommunity's well being or that the value of a currency can become virtually nil. Things like online cyber kredits are just as bad if not actually worse. I am often torn between feeling bad for these people who don't have enough understanding or imagination than to do anything but park their dollars in a checking account, or be glad that they don't as it helps keep the cost of PM's down before TSHTF. $.02

 

[pmbug]

...
Magnify Money asks How Much Does the Average American Have in Savings?

The question is irrelevant. The story is how unprepared the median person is prepared for retirement. On that score, the article does explain.

Stats

1. The average American household has $175,510 worth of savings in bank accounts and retirement savings accounts as of June 2018.
2. The median American household currently holds about $11,700 across these same types of accounts.
3. The top 1% of households (as measured by income) have an average of $2,495,930 in these various saving accounts. The bottom 20% have an average of $8,720.
4. Roughly 83% of savings are in located in retirement accounts like IRAs and workplace-sponsored retirement savings plans like 401(k)s.
5. Millennials, who have just started their savings journey, have currently socked away an average of $24,820. Gen Xers have $125,560 in retirement savings. Baby boomers and those born before 1946 have an average of $274,910.
6. 29% of households have less than $1,000 in savings.

Point number 2 is the most relevant point. 50% of household have less than $11,700 in savings.
...

https://moneymaven.io/mishtalk/econ...ian-household-savings-6LFokUv9GkG5-_0zWbALUA/

From the source:

...
Median balances are considerably lower than the averages. For example, the median savings account balance is $4,830, significantly lower than the $32,130 average American savings account balance. Fifty percent of households have more than $4,830 in those types of accounts, while 50% have less. (The median figures below only include households that have that type of account.)

• The median American household savings account balance is $4,830
• The median American household money market deposit account balance is $12,600
• The median American household amount in one or more CDs is $21,000
• The median retirement account size in American households is $72,840
• The median American household checking account balance is $2,330

...

https://www.magnifymoney.com/blog/news/average-american-savings/

Neither article discusses the possibility that people are either holding cash outside of the bank or investing funds in real estate, the market, business ventures or "other (shiny, often lost at the bottom of a lake) things".

 

[singleshot]

My savings are:

80% PMs
20% firearms and ammunition, emergency food/water, camping/survival equipment and barter items.

I usually have less than $500 in FRNs but I really don't see any advantage to saving worthless paper over the two choices above. I figure if I need some $, I'll sell some PMs but it ain't happened yet.

 

[rblong2us]

Averages Lie ? ......... Mean Vs Median Household Savings In America -

Mish has a few thoughts

https://www.zerohedge.com/news/2018...look-mean-vs-median-household-savings-america

 

[pmbug]

...
Mish has a few thoughts
...

heh... That was my first link (though I linked directly to Mish's blog, not ZH).

 

[pmbug]

* bump *

Phone survey shows people are poor and the veneer of civilization will be tested with a significant economic crisis.

...
Since 2014, GOBankingRates has polled Americans to find out how much they have in a savings account. This year, GOBankingRates asked adults from across the U.S. six questions to learn about their savings habits and what obstacles are keeping them from saving more. The results show that, compared with previous year’s findings, there’s a growing percentage of people with little to no savings. In 2019, 69% of respondents said they have less than $1,000 in a savings account compared with 58% in 2018.
...
Key Findings

• Almost half of respondents — 45% — said they have $0 in a savings account. Another 24% said they have less than $1,000 in savings.
• The top reason respondents said they weren’t saving more was because they were living paycheck to paycheck. Nearly 33% said this obstacle was keeping them from saving, and about 20% said a high cost of living prevented them from saving more.
• The No. 1 thing respondents said they need to save more money was a higher salary. About 38% said having a bigger paycheck would help them save more, while 18% said lowering their debt would make it easier to set aside cash.
• The most common place where those with savings put their cash is in a savings account. Although 33% of respondents said they take advantage of a savings account to store their cash, 29% said they don’t have any savings.

...

https://www.gobankingrates.com/saving-money/savings-advice/americans-have-less-than-1000-in-savings/

 

[rblong2us]

:flail:I am trying to be outrtaged by a notification from my savings bank that they have cut the rate in half !

Its down from 0.2% to 0.1 %:rotflmbo:

 

[lefty]

I keep nothing in a "savings" account. I do keep enough in my checking to cover about three months of bills and enough "cash" in safes with my firearms, ammunition, and PM to cover a long time. If/when the dollar disintegrates it will be a while before genpop realizes what has happened. Cash will serve well during that time.

 

[rblong2us]

I keep under £1 in my savings account, just so I can see the interest that they are currently paying and knowing that they have to send paper statements to me.

If interest goes negative, I might have to review the situation (-;