SAN FRANCISCO–New data from the FDIC indicating that Americans have lowered their bank savings by $32 billion in the second quarter of this year is a reflection of a decrease in the Money Anxiety Index, which decreased by 3.5 index points to 54.1 in the first half of this year, according to Dr. Dan Geller.
Geller, publisher of the Money Anxiety Index and co-author of the study Dynamics of Yield Gravity, argues that people increase their savings when money anxiety increases, and vice versa.
The study also shows that Americans nearly doubled their bank savings in the aftermath of the Great Recession from $6.1 trillion to nearly $11.8 trillion in the second quarter of this year, he said.
"Banks and credit unions have to readjust their forecasts and deposits rates to reflect the new reality,” said Geller who is also a behavioral economist at Analyticom. "Moving forward, the competition for consumer deposits is going to be fierce and only financial institutions that are going to utilize optimal and scientific pricing models are going to succeed."