If you read between the lines on a recent report from American Express, it looks like more Americans are veering away from the traditional bank savings accounts:
A majority consumers say they’ll keep their savings at a local bank (57% vs. 55% in 2014) but more than half of those who keep their savings in cash plan to hide bills in a secret location at home (53%).
This means that 43% of the people who are saving money are notputting it in the bank. This is good news for those of us who wish people would wake up and see the net being cast around them, but bad news for the banks that depend on deposit accounts to be able to give out loans and earn interest.
Most folks have been trained to keep their savings in the bank. It’s just the way things have been for over 100 years. But there are a lot of reasons why that is no longer a good idea. For one, deposit accounts are no longer legally protected. As well, the Federal Reserve passed a policy that in the event of an economic crisis (think “bank run) thataccounts can be frozen to preserve the liquidity of the banks.
In an recent interview, alternative asset manager Eric Sprott explains why stashing fiat currency in a bank is a bad idea: