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

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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)  Cash  U.S. stocks  U.S. bonds  Intl. Stocks  Intl. bonds  Alternatives  Unclassified 
20s 32.32% 41.24% 2.43% 8.23% 0.47% 3.48% 11.84%
30s 28.75% 41.17% 3.22% 9.32% 0.62% 3.39% 13.52%
40s 26.38% 40.74% 4.70% 9.50% 0.90% 3.47% 14.32%
50s 26.21% 39.29% 7.54% 8.97% 1.38% 3.55% 13.06%
60s 28.74% 35.83% 11.08% 8.24% 2.07% 3.91% 10.14%
70s 33.72% 33.58% 11.52% 7.26% 2.11% 3.86% 7.95%
80s 37.33% 33.37% 11.33% 6.04% 1.88% 3.65% 6.41%
90s 40.64% 31.80% 10.50% 4.98% 1.47% 3.68% 6.94%
No age data 41.83% 32.45% 3.93% 6.18% 0.62% 2.67% 12.32%
Total 28.68% 39.97% 5.00% 8.96% 0.94% 3.48% 12.97%

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.

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