Major banks are so flush with cash that many are not interested in new deposits. That’s right, they don’t want your money. In fact, rather than trying to attract new deposits with higher interest rates, they are letting deposits decline at an astounding pace. Bank deposits shrank by nearly $370 billion during the second quarter, according to the Federal Deposit Insurance Corporation (FDIC).

Even as market interest rates have climbed, savings account interest rates have barely budged. The national average paid on savings accounts was 0.13 percent in early September, according to  Bankrate.com. The largest banks in the nation, Chase, Bank of America and Wells Fargo held their rates at a rock-bottom 0.01 percent. 

Thanks to pandemic stimulus programs, banks received a flood of deposits from businesses and individuals, some $5 billion over the past two years. As a result, most banks, especially the biggest ones, hold more money than they can lend and therefore have little incentive to offer higher interest rates on savings and money market accounts. This means inflation, currently running above eight percent, is quickly chipping away at the value of funds sitting in the bank.

Cash required for short-term needs and an emergency fund still belongs in an immediately-accessible bank account protected by FDIC deposit insurance. But cash that is available for investment should not be sitting indefinitely in a bank account.

A far better alternative is gold, an asset as secure as any in the world. While its price does fluctuate, over time gold’s value has consistently risen, particularly in highly inflationary environments such as we’re experiencing today. This is why gold is a superior store of value for investment funds compared to bank savings accounts that pay minimal interest.