Consumer confidence has sharply dropped in November, reaching its lowest level since April due to economic anxiety over President Trump’s tariffs. As a result, Americans are spending less, with a slow increase in consumer spending compared to previous months.
Research shows stagnant savings and checking account balances for nearly two years, particularly among high-income households, where bank balances have decreased. Higher-income households are moving cash to higher-yield options like money market funds, brokerage accounts, and CDs due to inflation exceeding the 2% target.
To combat falling spending and inflation, many households are turning to high-yield cash accounts like the SoFi checking and savings account, offering up to a 4.30% APY. These accounts provide high-interest rates, zero fees, and FDIC insurance for balances up to $3 million, helping consumers grow their wealth effectively.
For those looking for locked-in returns, certificates of deposit (CDs) can be a reliable option with guaranteed rates. Raisin offers high-yield and no-penalty CDs with no fees and minimums as low as $1, providing a stable way to grow your savings over time.
Investment options like money market accounts (MMAs) and money market funds (MMFs) offer competitive yields and stability, with MMFs investing in low-risk securities. Platforms like Public allow investing in a variety of MMFs, providing a stable place to earn interest while managing your own portfolio commission-free.
Brokerage accounts provide higher growth potential through stocks, ETFs, and mutual funds, although they can be more volatile. Newbie investors can start with a robo-advisor like Acorns, which automatically invests spare change into ETFs, making investing easy and accessible for everyone.
Retirement accounts like 401(k)s and IRAs are seeing increased contributions, indicating a focus on future financial security. Some investors are diversifying with gold IRAs through Thor Metals, combining tax advantages with the protective benefits of investing in gold for potential economic uncertainties.
Read more at Yahoo Finance: Wealthy Americans are moving cash out of checking and savings accounts. Here’s what they’re doing with it