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Monday, October 02, 2023

New research: A third of Americans feel ‘safer’ with cash

New research: A third of Americans feel ‘safer’ with cash 

dollar bill against green backdrop

“Cash is king,” according to 1 in 5 Americans; here are strategies to consider for stashing cash 


Key takeaways 

  • Money in hand: The item Americans can’t leave home without? Cold hard cash. Americans are more likely to carry physical cash (69%) than Chapstick (31%), mints (20%) and a checkbook (17%). The two biggest reasons people keep money on hand include emergencies (55%) and tipping (26%).
  • Dollars and sense: People say they rarely pay with dollar bills (21% less than monthly, 13%, never) and 40% say they never use a checkbook. Instead, the majority are frequently using debit or credit cards (77%), digital payment platforms like Zelle or Venmo (34%) and apps with preloaded funds (21%) like Starbucks. Over one third (39%) say they pay with rewards program points at least once a month.
  • Saving for spending: Among Americans saving up for big purchases, the most popular method of saving is often stashing cash in traditional savings accounts: dream vacation (31%), a new car (31%) a down payment on a home (27%) and a wedding (26%). 
  • Cash accounted for: More than half of respondents (55%) defined cash as more than physical money, including traditional savings accounts, high-yield cash accounts, and money market accounts. 


Sometimes the tangible sets us at ease. 

Such can be the case with cash: We hold it, count it, and count on it in times of market volatility and economic uncertainty. So agrees almost a third of Americans (28%) who say they feel safer when they keep money in cash, according to a recent Empower survey.* 

Nearly 1 in 5 (17%) say “cash is king,” perhaps because they prefer the minimal risk and convenience. Indeed, cash plays an important role within a diversified portfolio: It’s useful for everyday spending, emergency savings, and short-term financial goals. With rising interest rates, you can get a solid return – to the tune of 4.70% APY for some accounts like Empower Personal CashTM – on your cash savings. 

These rates for high-yield accounts are currently outpacing inflation, driving a quarter (22%) of U.S. adults to stash more.1 

As of the latest inflation reading, consumer prices are up 3% year-over-year – the smallest 12-month increase since March 2021. Still, only a quarter of savers say inflation (26%) influences their approach to holding money in a cash account. And this year’s regional bank failures had little impact on cash savings for the vast majority (73%), though 16% say it prompted them to keep more on hand. 

No matter the motivation, maintaining a healthy balance of different asset classes can support your money goals, both in the short term and for the long haul. 

How different generations stash cash 

Cash is just one piece of your overall financial picture. Those with a diversified portfolio likely also hold stocks and bonds, as well as potentially real estate or alternative assets like precious metals or cryptocurrency. 

The makeup of a person’s portfolio is often influenced by a handful of factors: 

  • Age: How long until you’d like to retire?
  • Risk tolerance: How much market volatility can you stomach?
  • Goals: What do you hope to achieve in different spans of time – short, mid, and long term? 

While cash is valuable for some situations, investors are wise to modify their asset allocation according to these factors. For instance, those with a longer retirement horizon may opt for a more aggressive investment portfolio because they have time to weather market fluctuations. Case in point: Gen Z survey respondents were six times more likely than Boomers to have all their money invested in the market. But striking right investment balance for your goals and risk tolerance remains key.  

How much cash are people holding onto? The median cash allocation for users of the Empower Personal DashboardTM is $67,390, making up more than 26% of users’ overall portfolio. That’s an increase of 15% in cash holdings over the same period last year ($58,394 in 2022). 

Age (by decade) 


U.S. stocks 

U.S. bonds 

Intl. Stocks 

Intl. bonds 



































































No age data 
















Anonymized user data from the Empower Personal Dashboard™ as of August 2023 

How much cash to keep on hand 

Cash is useful – and sometimes necessary. Consider these scenarios for maintaining cash holdings:

  • Everyday expenses: Got to pay the bills and enjoy your earnings. You may opt for debit or credit cards, like 77% of our survey respondents, digital payment platforms like Zelle or Venmo (34%) or apps with preloaded funds (21%) like Starbucks. A third of people say they rarely pay with dollar bills (21% less than monthly, 13%, never).
  • Emergency fund: Keeping cash that covers 3-6 months of basic expenses can be added security in times of need, like if you experience job loss or a medical emergency.
  • Sinking fund: If you have recurring expenses throughout the year – birthdays, holidays or seasonal vacations – you may want to set aside additional cash dedicated to these expenses.
  • Short-term and mid-term financial goals: Let’s say you want to buy a new car, fund a wedding or make a down payment on a house. These are often big expenses. Consider these guidelines for whether you save in cash or an investment account:
    • If you need the funds in less than 18 months: Consider a secure, liquid cash account to keep your money FDIC-insured and readily available to meet your goal.
    • If you need the funds in 18 months to 36 months: Your decision may vary depending on how much of your net worth the goal amount represents.
      • If the amount is less than 10% of your net worth, a possible course could be to keep your money invested with your current strategy, or a slightly less aggressive strategy for some investors or goals.
      • If the amount represents more than 10% of your net worth and your timeline is inflexible, consider a high-yield cash account to keep the funds readily available. 

How to yield a higher return 

Cash has a place in a diversified financial strategy. But if your cash account offers a yield lower than the current rate of inflation, you lose spending power over time. 

When choosing a savings account, more than 1 in 4 Americans (26%) say they’re seeking the best yield to get the most bang for their buck, yet half (49%) admit to using the same bank that handles their checking account or base their choice on the convenience of physical locations (32%). 

Consumers may be under-utilizing the power of compound interest and passive income offered by online accounts, which return cost savings to customers in the form of higher annual yields. 

Consider Empower Personal Cash™, a high-yield cash account with no account minimums, no fees, and flexible deposits and transfers. This type of account does more than just stash cash; it helps you earn while having the flexibility to access your money.

*ABOUT THE STUDY: Empower contracted Morning Consult to conduct an online survey of 2,200 adults July 20-23, 2023 and the data was weighted to approximate a target sample of adults based on gender, age, race, educational attainment, and region. Results from the full survey have a margin of error of +/-2 percentage points. For this survey, “cash” is defined as any physical currency, checking, or savings accounts. Not included are investment accounts and non-liquid assets.

1 U.S. Bureau of Labor Statistics, “Consumer prices up 3.0 percent over the year ended June 2023,” July 2023.

Empower Personal Cash™ Program is offered through Empower Personal Wealth, LLC (“Empower”). Empower is not a bank. Bank deposit products provided by UMB Bank n.a., Member FDIC (“UMB”). To participate in the program, you must open an account at UMB, through which your funds will be placed in accounts at participating program banks (which may include UMB). The advertised interest rates are paid by participating program banks, including by UMB in its capacity as a participating program bank. Your funds will be FDIC insured up to applicable limits while in transit through UMB. UMB receives a fee from each program bank (except UMB) in connection with the program that is based on the aggregate daily closing balance of deposits held in program accounts by such program bank. The fee may vary from program bank to program bank and will generally increase as the aggregate amount of funds held in program accounts with the program bank increases.

The Empower Personal Cash™ Annual Percentage Yield (APY) as of 8/1/23 is 4.70% APY (4.602% interest rate). The calculation for APY is rounded to the nearest basis point. Both the interest rate and APY are variable and subject to change at UMB’s discretion at any time without notice.

The information provided in your account application is being provided by you to UMB. UMB may share this information with UMB’s affiliates and with EMPOWER, each of which may use this information in accordance with its respective privacy policy. Upon acceptance of the application, an account will be opened with UMB.

FDIC insurance up to $250,000 (including principal & interest) per depositor per program bank. The cash balance you place through the program is swept to one or more program banks where it earns a variable rate of interest and is eligible for FDIC insurance. If the number of program banks changes, the aggregate amount of available FDIC insurance could be higher or lower. If you have deposits at a program bank, you should consider electing not to use that bank by following the opt out instructions we provide. If you do so, the aggregate amount of FDIC insurance available to you will be lower. If you do not do so, your existing deposits and deposits through Empower Personal Cash™ at that program bank will be combined for the purposes of FDIC coverage, which could result in some of your funds at that program bank being uninsured. You can find a list of the program banks here:

For more information on FDIC insurance coverage, please visit Customers are responsible for monitoring their total assets at each of the program banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. Funds you place in the Empower Personal Cash™ Program are not covered by SIPC insurance.

There are no limits on the number of deposits or withdrawals you can make under the program. The maximum deposit limit per transaction is $250,000. The daily withdrawal limit is $25,000 unless in certain cases, you maintain a Personal Strategy account with Empower Advisory Group, LLC, or your account was opened and funded more than 60 days before the withdrawal, in which case the daily withdrawal limit is $100,000. For security reasons, there may be other limits on the amount, number, frequency, or destination of deposits or withdrawals you can make to or from the program. Transaction limits are subject to change at our discretion at any time. 

Paul Deer, CFP®

Paul Deer, CFP®


Paul is a CERTIFIED FINANCIAL PLANNER™ professional at Empower. With over a decade of industry experience, Paul’s current role as Vice President of Advisory Service at Empower keeps him focused on a team of financial advisors and their clients.


The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites. 

Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money. 

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 

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