Americans are hoarding cash, but not in banks - here’s where savvy savers are stashing it

Best savings accounts for high yield: Even though US inflation remains at 2.7% and checking and savings account balances are shrinking, consumer spending in the US is still surprisingly strong, as per a report. So where is all the money coming from?

Where Are Americans Parking Their Cash

New data from JPMorgan Chase’s Household Finances Pulse may provide a clue. After analyzing information from 4.7 million households, the study found that while traditional bank balances have flatlined in 2025, total cash reserves, which include money market funds, brokerage accounts, and certificates of deposit (CDs) are growing at a steady pace of 3% to 5% per year, as per a Moneywise report.

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Lower-Income Households Lead Surge in Cash Reserves

The most notable gains are among lower-income households, according to the report. Those in the lowest income quartile saw their total cash reserves grow by about 5% to 6%, as per the Moneywise report. This shift toward higher-yield options may be one reason consumer spending hasn’t slowed down, even after economic challenges, according to the report.

Where the Money Is Going Instead

Instead of leaving their money in checking or standard savings accounts, many households are shifting to financial tools that offer better returns, as per the Moneywise report. Here's a look at where they’re moving their money:

Shift from Checking Accounts to Higher-Yield Investments Accelerates

High-yield savings accounts (HYSAs): These work like traditional savings accounts but offer interest rates between 4% and 5% APY as of mid-2025, it is often available through online banks with lower overhead, reported Moneywise.

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Certificates of Deposit See Increased Demand as Rates Rise

Certificates of deposit (CDs): CDs let savers lock in money for a set term in exchange for guaranteed interest, with rates varying by term but can exceed 4% for longer commitments, as per the report.

Money Market Accounts Offer Safety and Flexibility

Money market accounts (MMAs): These accounts combine features of savings and limited checking, and they offer FDIC insurance and competitive rates, though usually slightly lower than HYSAs, according to Moneywise.

Money Market Funds Gain Traction Despite Lack of FDIC Insurance

Money market funds (MMFs): These are investment products rather than bank accounts, and even though they’re not FDIC-insured but are considered relatively stable and invest in short-term, low-risk securities, as reported by Moneywise.

Brokerage Accounts Attract Investors Seeking Growth

Brokerage accounts: These allow investors to put money into stocks, mutual funds, and ETFs, but are more volatile and have higher potential returns over the long term, according to the report.

Retirement Account Contributions Continue Upward Trend

Retirement accounts (401(k)s, IRAs): Contributions to retirement accounts are also rising, showing that many households are still focused on their long-term financial future, as per the Moneywise report.

FAQs

Who’s saving the most right now?
Surprisingly, lower-income households are seeing the fastest growth in savings, with a 5% to 6% increase in total cash reserves.

Why are people still spending a lot even though their bank accounts aren’t growing?
Because many are moving their money into different types of accounts that earn better interest or returns, so their cash reserves are actually growing even if checking and savings balances look flat, as per the Moneywise report.