COVID Saving Added $1 Trillion to Bank Deposits

Banks are awash in money as consumers at record rates socked away the money they didn’t spend during the early stages of the COVID-19 shutdown.

Mass Mutual survey discovered one in five of us put away at least $1,000. An ambitious 10% say they’ve saved more than $5,000 since the start of the pandemic. So much money has poured into the nation’s banks that the FDIC’s Deposit Insurance Fund fell below the statutory minimum.

The Federal Deposit Insurance Corp. guarantees money on deposit at insured banks up to $250,000. The fund is financed by fees paid by insured banks, based on their deposits, size and other factors.

Typically, when the fund falls below the required 1.35% of insured deposits, it’s because of bank failures. But in this case, the amount Americans saved during the early weeks and months of the pandemic grew so fast the ratio of the $114.7 billion fund to total deposits fell to 1.3%.

The FDIC called the influx of savings “extraordinary.”

“An unprecedented inflow of more than $1 trillion in estimated insured deposits in the first half of 2020 resulted mainly from the COVID-19 pandemic, specifically monetary policy actions, direct government assistance to consumers and businesses, and an overall reduction in spending,” said the FDIC.

The Mass Mutual survey found 46% of Americans spending less than in the past. Many spent more on food deliveries and streaming services, but almost two-thirds spent less on vacations. A majority (53%) reduced spending on day trips. Weddings, summer wardrobes and beauty care were also areas where a high percentage said they’ve reduced their spending.

Most of those who cancelled their summer vacation saved the money in one manner or another. A third put it away hoping to take a vacation later this year. 30% put it into their regular savings account; 15% added it to their emergency fund.

Among the 34% of Americans who saved at least something, 55% said not taking a vacation or doing any traveling helped them save. Many also said not going out at night, eating at home and skimping on personal care and clothing were other ways they saved.

What do they expect to do with the money they saved? 40% plan to hang on to it as an emergency fund. One-in-five will use it for necessities, to pay down debt and to eventually travel.

And when the COVID pandemic is over, 26% said they’ve developed new spending and saving habits which they plan to keep.

Photo by Austin Distel on Unsplash

Prime Day 2021 Brings New Challenges for Amazon Sellers
Accounting + Finance General Interest Leadership + Management

Prime Day 2021 Brings New Challenges for Amazon Sellers

Juneteenth: History and Significance
General Interest

Juneteenth: History and Significance

Biogen’s Long-Awaited Alzheimer’s Treatment
General Interest Healthcare Pharma

Biogen’s Long-Awaited Alzheimer’s Treatment

The Internet Had a Bad Day
Information Technology

The Internet Had a Bad Day

The Role of HR Departments in LGBTQ+ Pride
General Interest Human Resources Worklife

The Role of HR Departments in LGBTQ+ Pride

What It Means to Be a Leader During a Time of Crisis
General Interest Leadership + Management Worklife

What It Means to Be a Leader During a Time of Crisis

Mid-Life Crisis? Consider a Mid-Life Career Switch
Accounting + Finance General Interest Information Technology Leadership + Management Worklife

Mid-Life Crisis? Consider a Mid-Life Career Switch

Lawyers Look to Move Firms to Keep Remote Work
Legal Support

Lawyers Look to Move Firms to Keep Remote Work

Is the Hybrid Workplace Sustainable?
Worklife

Is the Hybrid Workplace Sustainable?

Bank of America, Competitors to Raise Pay
Financial Services

Bank of America, Competitors to Raise Pay

Class of 2021 to Enter Job Market
Financial Services Healthcare Information Technology Marketing Technology Professional Support

Class of 2021 to Enter Job Market

Pharmacies Are Entering the Mental Health Market
Healthcare Pharma

Pharmacies Are Entering the Mental Health Market

Pandemic Challenges Create New Opportunities for Virtual Career Development
Worklife

Pandemic Challenges Create New Opportunities for Virtual Career Development

America’s New Tech Hubs
Information Technology

America’s New Tech Hubs

How to Recognize if a Manager Is Right for You
Worklife

How to Recognize if a Manager Is Right for You

Green Key Resources is Hiring!
Accounting + Finance Architecture + Engineering Creative Financial Services Healthcare Human Resources Information Technology Legal Support Marketing Technology Pharma Professional Support

Green Key Resources is Hiring!

How to Think Like a Lawyer
Legal Support

How to Think Like a Lawyer

3 Questions to Unlock Your Authentic Career
Creative Worklife

3 Questions to Unlock Your Authentic Career

Businesses Rethink “Necessary Travel”
Worklife

Businesses Rethink “Necessary Travel”

YOLO Is Sparking Riskier Career Moves
Worklife

YOLO Is Sparking Riskier Career Moves

Latest Blog Posts
View All Posts
Prime Day 2021 Brings New Challenges for Amazon Sellers

Prime Day 2021 Brings New Challenges for Amazon Sellers

The return of Amazon Prime Day to the summer calendar appears to be a sign of progress, but new challenges...
Read More
Juneteenth: History and Significance

Juneteenth: History and Significance

Juneteenth is an annual holiday commemorating the end of slavery in the United States. Here are 19 facts about the...
Read More
Biogen’s Long-Awaited Alzheimer’s Treatment

Biogen’s Long-Awaited Alzheimer’s Treatment

On June 7, the U.S. Food and Drug Administration approved Aduhelm (aducanumab) for Alzheimer’s, which affects more than 6 million...
Read More