Hoarding cash in checking accounts


Large numbers of middle-class Americans are hoarding money in their bank accounts.  The Federal Deposit Insurance Corporation says total bank deposits rose 6.6% last year to $10.7 trillion, continuing a trend seen in recent years.

Economist Mike Moebs, CEO of Moebs Services, an economics research firm, says it’s a sign of the times.  “When times are good,” he says, “the average consumer has a balance in their checking account no more than $1000, often somewhere between $700 and $1000.”

In contrast, in the wake of the Great Recession and the stagnation that characterized the Obama administration, Moebs notes, “We’re seeing averages of checking accounts at levels over $3600, and we have never seen that since this data’s been available, since after World War II.”  He says that’s true of about 60% of Americans.  The rest are living paycheck to paycheck.

And it’s not just individuals, he says.  “Businesses with 25 people or less,” Moebs reports, “also are stockpiling or hoarding cash.”  Investment experiences in recent years have left them gun-shy, he says.  “Many of these people – consumers and small businesses – were badly burnt in the start of the Great Recession, and they remember that.”

Moebs says banks and credit unions offer small investors little in the way of attractive interest rates, as opposed to “a high-end savings account or money market deposit account.”  Individuals and small businesses who are hoarding cash, he says, are “waiting for less uncertainty” in the economy.


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