People Fear They’ve Got Too Much Cash in Their Bank Accounts

Falling interest rates are tempting some Americans to forgo safety and pour their savings into assets such as stocks and bitcoin.

By 

Donald Moore

July 31, 2020, 12:15 PM GMT+3 Updated on July 31, 2020, 3:34 PM GMT+3

The savers are getting restless.

Running out of guaranteed ways to get meaningful returns, some people are increasingly being tempted to raid their interest-earning cash savings to load up on assets such as bitcoin, gold and stocks. The comfortable, if small, returns of high-yield savings accounts are looking less palatable as volatile assets take off.

For a while, Brian Harrington, 28, had been satisfied with a high-yield savings account at Ally Bank, earning a risk-free 2%. Now, the marketing consultant in Anaheim, California, is planning to convert his remaining $15,000 in savings into bitcoin. He thinks the future is one of long-term economic stagnation and low rates.

“I’m not rooting for Doomsday,” he said. “But you have to keep searching for yields.”

The last few months have, in some respects, been a boon for account balances. Nationwide lockdowns enacted to slow the spread of Covid-19 have cut consumer spending, and stimulus checks arrived for millions of Americans. The personal savings rate in the U.S. fell to 19% in June — still at historically high levels — after rising to a record 32.2% in April. Mint, a financial planning platform, told Bloomberg that its customers deposited 16% more into their accounts between March and June compared with the same period last year.

Continue reading here...