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Consumer spending in the U.S. remains strong, even as inflation sits at 2.7% (below the 2.8% forecast) and checking and savings balances shrink. The question is — where’s the money coming from?
New research from JPMorgan Chase’s Household Finances Pulse analysis may offer an answer.
Analyzing data from 4.7 million households, the study found that while traditional bank balances have stagnated, total cash reserves — including money market funds, brokerage accounts and certificates of deposit (CDs) — are growing at an annual rate of 3% to 5% in 2025.
The biggest gains are among lower-income households. Those in the lowest income quartile saw 5% to 6% growth in total cash reserves.
This shift toward higher-yield accounts may help explain why consumer spending remains resilient, despite economic headwinds.
Instead of keeping money in checking or traditional savings accounts, many households are turning to investment-style options with higher returns. If you’re thinking about doing the same, here are some of the most popular alternatives:
High-yield savings accounts (HYSAs): These function like regular savings accounts but offer much higher interest rates — typically between 4% and 5% APY as of mid-2025. Online banks and financial platforms commonly provide them, although some brick-and-mortar banks are now getting in on the game. However, some HYSAs require a minimum account balance to take advantage of this boosted rate or to avoid account fees.
Certificates of deposit (CDs): CDs lock your money in for a fixed term in exchange for a guaranteed return. Rates vary by term but can exceed 4% for longer durations. This can make them a low-risk savings option that yields higher interest than some top savings accounts.
With MyBankTracker, you can shop and compare top certificates of deposit rates from various banks nationwide.
Their extensive database highlights the most competitive rates, is updated daily and offers personalized recommendations based on your risk tolerance and time horizon — helping you find the right CD to match your savings goals.
Just keep in mind that CDs are not as liquid as high-yield savings accounts.
Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead
Money market accounts (MMAs): Offered by banks, MMAs combine savings features with limited check-writing capabilities, FDIC insurance and competitive yields — although often slightly lower than those of HYSAs.
Money market funds (MMFs): These are investment products, not bank accounts. While not FDIC-insured, they invest in low-risk, short-term securities and are considered a stable alternative to cash.
Brokerage accounts: These accounts allow you to invest in stocks, ETFs, and mutual funds. While more volatile, they offer higher long-term growth potential.
If you want to automate this process, you could work with a robo-advisor like Acorns to get started investing your spare change with every purchase.
After signing up and linking your bank account, Acorns automatically rounds up the price of your purchases to the nearest dollar and puts the difference into a smart investment portfolio of ETFs.
That $4.25 morning coffee? It’s now a 75-cent investment in your future.
But Acorns also lets you set up a monthly deposit to supercharge your investing. The best part? If you sign up now with a recurring deposit, you can get a $20 bonus investment.
Acorns also lets you dial in your risk tolerance depending on whether you want to invest aggressively over the short term or set your sights on your retirement horizon.
Retirement accounts (401(k)s, IRAs): Although designed for long-term savings, increased contributions to these tax-advantaged accounts suggest that many households are focused on future financial security.
For added diversification, you could open a gold IRA with the help of Thor Metals.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which can combine the tax advantages of an IRA with the protective benefits of investing in gold.
This can make them an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties. Keep in mind that gold often works best as one part of a diversified portfolio.
To learn more, you can get a free information guide from Thor Metals that includes details on how to get up to $20,000 in free metals on qualifying purchases.
What to consider when choosing an investment vehicle
Chasing higher yields can be a smart move, but always consider your financial goals, risk tolerance and liquidity needs before making an investment. Here are a few factors to keep in mind:
Purpose of the funds: Determine what you’re saving for. An emergency, a home or retirement? Use HYSAs or MMAs for short-term or emergency savings, CDs for funds you won’t need for a year or more, and brokerage accounts with stocks or bonds for long-term goals (5+ years).
Risk tolerance: Investing in stocks carries market risk. You could lose value if you’re forced to sell during a downturn. If protecting your principal is your top priority, consider lower-risk options like CDs or MMFs, keeping in mind that MMFs are not FDIC-insured.
Liquidity needs: Some products, like CDs, charge penalties for early withdrawals. If access is important, prioritize liquidity or use multiple CDs with staggered maturity dates.
Americans are continuing to adapt to economic pressures, driven in part by market volatility, global uncertainty and increasing tariffs. While inflation can still erode your purchasing power, the rising use of high-yield financial tools may be helping households preserve — and even grow — their cash reserves.
Is this a long-term shift in consumer behavior? Only time and the economy will tell.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.