In times of economic turbulence, investing in interest-bearing financial assets can help mitigate the effects of inflation. However, a new report from PYMNTS Intelligence and LendingClub reveals that just one-tenth of savings are stored in financial assets by US consumers.
The study found that aggregate savings in the US amounted to an average of nearly $11,200 per individual in September 2023. The largest portion of these savings, 23%, was stored in education or retirement funds, followed by 11% in stocks or bonds, and 2% in cryptocurrency. The remaining amount was allocated to a mix of financial assets, highlighting a conservative approach to savings among US consumers.
While the stock market indexes, such as the S&P 500 and Dow Jones, have seen significant growth, only 1 in 10 US consumers decided to invest their savings in bonds or stocks. However, consumers with a healthier financial situation allocated up to 15% of their savings to these types of assets, nearly double that of those living paycheck to paycheck. Around half of domestic investors have experienced growth in the value of their portfolios for each class of financial asset, including bonds and stocks.
The report suggests that the recent growth in financial assets, despite inflation, highlights consumers’ desire to obtain an economic return on their savings.