Banking

More Americans Keeping Money In Their Checking Accounts Due To Insecurity About Economy

New data shows that more Americans are holding money in their checking accounts, a sign that they don’t feel as secure as they would like about the economy.

Moebs Services, an Illinois-based economic research firm, found that the average consumer’s checking account balance has increased in 23 of the past 30 quarters.

The data was taken from over 12,000 depository call reports and compared to Federal Reserve monetary data for 2017.

“The consumer in banks, thrifts and credit unions by region, state, city and asset size keeps warehousing more checking dollars,” said Michael Moebs, economist and Chief Executive of Moebs Services, according to Market Watch. “The average Joe and Jane still are very leery of the economy.”

Consumers had the least amount of money in their checking accounts in 2007--right before the Great Recession--with an average of less than $1,000 in their account. Since 2008, however, customers have been hoarding more money in their checking accounts.

Today the average customer has more than $3,700 in their checking account, with the median amount in checking since 1991 being $2,263.

“Anything lower than this signifies the economy is doing well,” Moebs said. “Anything above this indicates the economy is not doing well.”

“Wages have not increased,” Moebs added. “Jobs are still hard to find.”

He also pointed out that full unemployment, including discouraged workers and those who work part-time for economic reasons, is high at 8 percent, and interest rates are low.

And some companies are working to make checking accounts more attractive for their customers. For example, earlier this year, Discover announced news a new rewards program for its Cashback Checking account, in which customers can earn 1 percent cash back on up to $3,000 in qualifying debit card purchases each month.

In addition, there have been reports that Amazon is in talks with big banks like JPMorgan Chase about designing a checking account-like product.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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