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Poll: Where Are You Putting Your Money?

We’re fleeing to the safety of a savings account in record numbers.

This according to The Washington Post, which examined new Federal Reserve data that shows deposits increased by 5% this spring to $6.9 trillion, the highest level the Fed has seen since it began tracking such things more than six decades ago.

This is ironic, given that savings rates are at record lows. The average account today pays about 0.10% APY.

And the best accounts pay little more than 1%.

Americans put between 5% and 6% of their earnings into savings during the recession, up from 1% in 2005, according to the story. We’re saving at a 4% clip this year.

The author correctly suggests this drive to safety means Americans are missing out on big stock market increases by parking their money in FDIC-insured institutions.

Many of us left the market at precisely the wrong time and will probably wait far too long to get back into it.

Which doesn’t bode well for our retirement savings prospects.

From the story:

“People have lost their appetite for risk,” said Karen Dynan, codirector of the economic studies program at the Brookings Institution. “They’ve been burned by the stock market. They’ve suffered through capital losses on their homes. And so they’re hunkering down in what they view as the safest place to store money.”

Another safe place, of course, is CDs. But certificates of deposit also pay record-low returns. The best nationally available deal on our CD Rates Leaderboard pays 1.86% APY.

We know many of our readers have no problems saving money. Some of you said as much in our last poll.

So …

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Where are you putting your money?
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