Households big and small are redirecting savings to brokerage, money‑market and CD options as interest payments finally outpace inflation.
After a year of stubborn prices and tariff jitters, Americans are voting with their wallets. A fresh JPMorgan Chase Institute study of 4.7 million households finds total cash reserves rising—not in the usual checking and savings buckets, but in brokerage accounts, money‑market funds and certificates of deposit that pay real investment income.
Why does this matter? Because consumer spending has stayed surprisingly robust even while basic checking balances looked stuck in neutral. The new data suggest the money never disappeared; it simply moved to places that reward savers with higher yields.
Higher yields are luring household dollars away from traditional checking accounts
Since mid‑2024, inflation‑adjusted balances in plain checking and savings have been “flat,” the institute notes. However, once the new, interest‑bearing accounts are counted, total liquid cash is tracking historic growth patterns again. “Families across many income bands are now seeing a turnaround in their total cash,” explains institute president Chris Wheat.
Wondering why your own checking statement feels lighter? In a rate environment where some money‑market funds top 4 percent, parking excess cash in a zero‑yield account no longer makes sense. Households appear to be using these alternative accounts more like flexible cash management tools than long‑term investments. Most popular cash‑earning vehicles Americans are choosing today:
- Brokerage sweep accounts that automatically pay competitive interest
- Money‑market mutual funds with daily liquidity
- Short‑term certificates of deposit (often 6–12 months)
- High‑yield online savings linked to brokerage platforms
On the other hand, Wheat cautions the shift could be temporary if rates fall sharply. For now, consumers are making the most of the window.
Lower income families are finally seeing a meaningful rebound in total reserves
The study highlights encouraging news for households earning under $35,000: their combined cash holdings have grown at a 5 to 6 percent annual clip. Check out the spread:
| Income quartile | Median total cash (all accounts) | Annual growth rate |
|---|---|---|
| Lowest (<$35k) | Just over $1,000 | 5 – 6 % |
| Second | About $2,800 | 4 % |
| Third | Roughly $5,400 | 3 % |
| Highest | Above $8,000 | 2 % |
Could this uptick stall? Perhaps—but for now, even modest‑income savers are cushioning themselves against future shocks. What should readers do next?
- Review checking balances and sweep excess cash into an interest‑bearing vehicle.
- Compare APYs on money‑market funds and short CDs—rates still vary widely.
- Keep emergency cash accessible, but let the rest earn something meaningful.
Consequently, the resilience of U.S. spending power may lie not in bigger paychecks alone, but in smarter cash placement. If rates keep rewarding savers, the trend could bolster economic stability well into 2026. Nevertheless, stay nimble; shifting conditions may call for another move.