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Surprisingly Few People Own CDs

suit and calculatorThink of your neighbors or the people you see on the train ride to work every day. Think of your co-workers and your friends.

How many, would you guess, hold a certificate of deposit account?

We know there is far less money in CDs today than there was last decade. In 2014 alone, about $25 billion has been drained from CD accounts.

And yet, we were kind of surprised to see new Federal Reserve data that show the percentage of U.S. households that own a CD.

chart showing the decline of CD deposits

Turns out just 7.8% of families held a CD in 2013, according to the mouthful of a Fed bulletin, “Changes in U.S. Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances.”

That’s down from 12.2% in 2010.

We find both of these numbers pretty low, but given the state of CD rates, should we?

Said the Fed: “These declines are, at least in part, attributable to low interest rates over this period, which reduced the advantage of certificates of deposit over transaction accounts.”

The data also show the median amount of money families held in CD accounts dropped 25% between 2010 and 2013, to $16,000.

In fact, ownership in nearly every type of financial asset – think savings bonds, 401(k) plans and stock – fell during that 3-year period.

Transaction accounts like checking and savings accounts were the most widely held financial assets and also the only category not to see a decline in ownership rate. Some 93.2% of households held one of these accounts in 2013.

The median amount of money increased in those accounts by 9% to $4,100.

You can bet some of that missing CD money ended up in savings or checking accounts because it’s just not worth chasing low certificate rates.

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