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Despite lower balances in checking and savings accounts, a new report from the JPMorganChase Institute reveals that many American households are actually in better financial shape than they appear, thanks to a shift in how they’re managing their money.
The Household Finance Pulse report, released in July 2025, analyzed anonymized banking data from 4.7 million Chase customers. It found that although balances in traditional bank accounts remain below pre-pandemic expectations, total cash reserves, including funds in CDs, brokerage accounts, and money market funds, have been growing since mid-2024. This trend is especially notable as the economy continues to recover from high inflation, elevated interest rates, and ongoing global uncertainties.
According to the report, balances in checking and savings accounts are about 23% higher than in 2019, but still well below the 40% increase expected based on normal growth patterns. That shortfall initially raised concerns about whether Americans were depleting their savings. But when researchers looked at a broader set of liquid assets, they discovered that overall cash reserves had increased between 3% and 5% year-over-year by May 2025. This suggests that many households are simply moving money into accounts with better returns, not necessarily spending it down.
During the COVID-19 pandemic, a mix of government stimulus checks, expanded unemployment benefits, and reduced spending opportunities led Americans to build unusually large savings. But as the pandemic subsided and inflation surged, much of that cushion disappeared. Many assumed that lower bank balances indicated growing financial stress — until this new data offered a more complete picture.
This shift is not limited to the wealthy. Lower-income households appear to be driving much of the growth in total cash reserves. Since mid-2024, those in the lowest income bracket have shown consistent increases in both traditional bank balances and overall reserves. By contrast, high-income households have continued to see slight declines in their checking and savings balances, even as their total reserves begin to recover.
One reason for this shift is today’s elevated interest rates. With the Federal Reserve keeping rates higher to fight inflation, households now have more incentive to park their cash in higher-yield products like CDs and brokerage accounts. The report shows that investment account usage has increased across all income levels, especially since 2020. This means many households are no longer holding as much idle cash in their bank accounts but are instead taking advantage of opportunities to earn more on their savings.
To estimate total cash reserves, JPMorganChase tracked transfers out of checking and savings accounts and projected returns based on two scenarios. In a conservative scenario, cash earns the same return as the 10-year Treasury yield. In a moderate scenario, investment accounts grow at the pace of the S&P 500, while other accounts track the Treasury yield. Under both models, total cash reserves have been rising, with stronger gains in the moderate scenario.
By early 2025, year-over-year growth in total reserves reached 3% to 5%, even as checking and savings balances remained flat. Among lower-income households, reserve growth was even higher, around 5% to 6% depending on the model used. For high-income households, total reserve growth turned positive in early 2025, though the rebound was slower and more modest.
The report also finds that cash management trends have become more sophisticated across the board. Households of all races and income levels are reallocating their money, which reflects growing financial awareness and adaptation to a post-pandemic economy. Even though standard bank balances are lower than expected, this is not necessarily a sign of distress. Rather, it points to a broader financial strategy aimed at maximizing returns during a time of economic uncertainty.
As policymakers and economists continue to monitor the health of the U.S. consumer, this report highlights the importance of looking beyond traditional measures. While checking and savings account balances offer some insight, they don’t tell the whole story. By considering all liquid assets, the report paints a more accurate, and more optimistic, picture of household financial resilience in 2025.