Americans are so nervous about the state of the economy that they are stashing cash in the bank at a rate not seen in 39 years.
The United States Government’s Bureau of Economic Analysis reported Thursday morning that the savings rate surged to 13.1% in March — up from 8% in February.
- That’s the highest savings rate since November 1981.
- Americans had $2.17 trillion in savings last month.
Consumers are putting more money away at a time when bank savings, money market accounts, and Treasury bonds are yielding next to nothing after the Federal Reserve slashed rates to zero last month.
The lack of interest income isn’t deterring people from saving more even though many Americans are getting smaller paychecks.
This should pique your interest: In today’s market, high yield bonds and dividend stocks may be better bets than a savings account (as long as you have an emergency fund on hand). Happy investing!