Half of Americans Feel Safer Holding Cash Over Other Investments. Are They Right?
Written by
Laura Bogart
Edited by
Kristen Mae
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These days, you can get the lowdown on virtually any kind of investment delivered right to your fingertips. You can Google information about stocks and instantly find articles, YouTube tutorials and explainers galore. Then there are the TikTokers sharing their stock picks. Or, if you really needed to, you could always ask Alexa — not the device, but your cousin, the financial advisor.
Yet, despite the abundance of investment information, a survey conducted by Empower suggests that cash still reigns supreme. Roughly 52% of people surveyed preferred to keep cash instead of exploring other investments.
At first glance, this information seems eye-popping. Can more than half of respondents really prefer stashing money in their wallets over growing it through investments? And is that even wise?
The answers are, unsurprisingly, more complicated than you might think.
Cash Can Feel Like a Safeguard Against Uncertainty
Safety is the name of the game when it comes to Americans’ passion for cash. About 49% of survey respondents said they felt safer holding cash compared to other investments. This anxiety is fueled by uncertainties in the market, particularly fears of a looming recession.
But everyday worries about being caught unprepared in an emergency also contribute to the “cash is king” mentality. About 69% of respondents said they carried cash for emergencies, while 59% appreciated the quick accessibility of being able to pull out cash — like Superman rushing out of a phone booth.
Interestingly, survey respondents showed equal enthusiasm for carrying cash as a safeguard for peace of mind and for its reliability, with 39% of people agreeing on both counts.
Your Passion for Cash Doesn’t Have to Mean Zero Growth
Even if you’re one of the 49% of Americans who prioritize cash for its safety and accessibility, holding onto cash doesn’t have to mean missing out on financial growth. While traditional checking and savings accounts offer security, they often leave your money stagnant.
Cash that isn’t earning interest loses value over time due to inflation. With inflation rates often hovering around 2-3% annually — and occasionally spiking higher — the purchasing power of idle cash dwindles year by year.
If you prefer to keep more cash on hand but don’t love the idea of letting it lose value, consider a high-yield checking account like QBoost from Quorum Credit Union. This type of account allows you to maintain quick access to your cash while earning interest — sometimes at rates comparable to high-yield savings accounts. High-yield savings accounts, which also provide liquidity, often boast rates comparable to CDs, offering another option for those seeking growth without sacrificing safety.
Should the Reign of Cash End?
While some high-yield checking and savings accounts allow you to make cash more productive, a key aspect of building wealth is exploring other investment opportunities. So why aren’t more Americans venturing beyond cash?
The good news is that some are. According to the Empower survey, 51% of respondents said they were open to exploring stocks and bonds. Additionally, 51% have looked into investments like high-yield savings accounts, which are excellent for goals such as emergency savings. Younger generations, like Gen Z, are also showing increased interest in new investment avenues, including cryptocurrency.
According to Empower’s survey, cash reigns supreme as the preferred method of holding money for more than half of Americans. However, this “cash is king” mentality can limit people’s ability to grow their wealth while still meeting their goals for financial security and accessibility.
At the end of the day, cash may rule your world, but incorporating tools like high-yield checking and savings accounts can help your money grow while retaining accessibility. That way, you can have the best of both worlds — security and growth.
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