Americans Are Saving More. Where Should That Money Go? — U.S. Money Reserve

U.S. Money Reserve
5 min readMay 4, 2023

By Angela Roberts, CEO of U.S. Money Reserve

I recently ran across an April 28, 2023, MarketWatch article with a headline that begins: “America’s personal savings just hit $1 trillion.” It then goes on to ask whether CDs, I-bonds, or online savings accounts would be the best place to put that extra cash.

I’m a big believer in being prepared. It’s why I keep an eye out for these sorts of headlines and why I’m always looking to learn more about the financial world and my options when it comes to diversifying and protecting my assets. So naturally, I turned to members of our thought leadership team, including U.S. Money Reserve President and former U.S. Mint Director Philip Diehl and our Director of Education, Brad Chastain.

According to Director Diehl, a spike in America’s personal savings rate may be “icing on the cake” for gold prices.

The MarketWatch article I mention above notes that the U.S. Department of Commerce Bureau of Economic Analysis personal savings rate, which shows personal savings as a percentage of disposable personal income, increased to 5.1% in March 2023, up from 4.8% in February. In short, Americans have a little more money to spend after covering regular expenditures and taxes.

Curious what this may mean for the precious metals industry, I compared a history of the personal savings rate with that of gold prices and economic recessions. As it turns out, the last time we saw a major spike in the personal savings rate was in April 2020 — a possible result of lockdowns and other economic downturns that stemmed from the COVID-19 pandemic. This spike also occurred just a few months before gold reached its all-time high price in August 2020.

I wondered if there is a correlation — people saving more could mean spending less, which in turn could lead to lower economic activity, slower markets, and more Americans turning to historically recognized safe-haven assets like physical gold. Does that mean the current increase in the personal savings rate could be a sign of another spike in gold prices?

I spoke with our company President, Philip N. Diehl, who told me that there’s more to the personal savings rate than meets the eye: In the case of the pandemic, he told me that there were “massive government transfers” that led to “huge and temporary spikes” in the savings rate in 2020. But it’s not all bad news for gold: While noting that the rally that led to gold’s all-time high began in 2019, before the pandemic started, Director Diehl also suggested, “The spike in the savings rate may have put the icing on the cake.”

Our Director of Education compared the liquidity and inflation protection of major assets.

The MarketWatch article compared a number of assets as potential stores of extra wealth — specifically, I-bonds (also known as Series I savings bonds), certificates of deposit (CDs), and online savings accounts.

Brad Chastain, our Director of Education, has nearly two decades of experience helping inform clients about their options when it comes to saving for the long term. I spoke with Brad about how these assets stack up against one another, and here’s what he told me:

  • I-bonds: “A good inflation hedge, but poor liquidity. [I-bonds] can only be redeemed by the Treasury, can’t be redeemed for at least 12 months, and there’s a penalty for redeeming I-bonds within five years. Also, you can’t save much [with I-bonds]: only up to $10,000 per person per year.”
  • CDs: “Like I-bonds in terms of liquidity, there’s a penalty for redeeming early. CDs also may not compensate for higher inflation.”
  • Online savings accounts: “Good liquidity, but a poor inflation hedge. Online savings accounts may offer more attractive savings rates than a local bank, but this will still be very interest-rate sensitive. If the [Federal Reserve] starts lowering rates later this year as many expect, that will negatively impact returns on these accounts. Also, they may not compensate a saver for inflation.”

Brad also pointed out to me that both CDs and online savings accounts include a certain level of credit risk because both are bank liabilities. And while a portion of most bank accounts are FDIC-insured, that hasn’t served as a strong comfort since Americans recently watched three banks fail in less than two months.

Physical precious metals like gold offer unique benefits you won’t get anywhere else.

In my conversation with our Director of Education, I also asked how the assets mentioned in the article might stack up against gold. His answer was simple: “As an alternative to those other assets, gold offers good liquidity and a good hedge against inflation.” I agree, but there are even more benefits gold can offer that other assets don’t touch.

Unlike an online savings account, gold offers you the ability to physically hold a portion of your wealth in your hands, store it the way you want your wealth to be stored, and hand it down to later generations. As a physical asset, gold can provide a peace of mind that digital or paper-based assets can’t.

There’s one other thing I would add to Mr. Chastain’s comments comparing gold to the other assets discussed in the article: Gold doesn’t have to be an alternative to other assets. A well-balanced portfolio will include many types of assets and asset classes, and that could include I-bonds, certificates of deposit, and physical precious metals. What’s important is that you find the right level of risk, protection, and growth potential to fit your unique financial needs and goals.

If you’re among those Americans who finds themselves with some extra savings, give us a call and find out if physical gold is right for you.

Originally published at on May 4, 2023.