The percentage of Americans with more than $250,000 in their bank accounts may be vanishingly small, but half the country is concerned about the safety of their money.
That’s according to a new Gallup poll which certainly seemed to suggest that recent events have shaken confidence in some of the nation’s financial institutions.
A popular narrative says everyday people aren’t worried about banks because most people’s deposits are fully insured and besides, voters are too busy fretting over the issues that “matter” (issues like the spiraling feud between Disney and Ron DeSantis) to trouble themselves with scary bank headlines.
But, as it turns out, when you actually ask Americans about their money, they do care. “Amid turbulence in the US banking system, nearly half of Americans are anxious about the safety of the money they have in accounts at banks or other financial institutions,” Gallup said Thursday.
Of course, merely asking this question probably skews the results. It’s like asking, “How worried are you about sinkholes swallowing American cities?” I might say, “Not worried. Right? Or, wait, why do you ask? Can I change my response?”
The poll was conducted from April 3 through April 25. So, it captured any deterioration in sentiment that SVB’s implosion might’ve engendered, and to the extent Americans were apprised of the news, they’d have noticed First Republic’s struggles too.
This week, more regional lenders were in the crosshairs, and it felt like an additional failure (or two) was a foregone conclusion, which would presumably mean more Americans would become concerned.
The 48% who said they worried about the safety of their money in US banks last month was higher than the percentage recorded by Gallup in September of 2008, when Lehman failed.
The breakdown by income cohort appeared to dispense with the idea that Americans with less savings are likely to be less worried given the higher odds that the entirety of their deposits are insured by the government.
Just 40% of those making $100,000 or more were worried about the safety of their money in banks. 50% of those making $40,000 or less expressed some degree of concern.
There are a number of possible explanations for that disparity, and I won’t delve into them here, but I would note a potential parallel with the breakdown by education level. Just 9% of those with a college degree were “very concerned” about the safety of money in banks. That figure for those with no college degree was 24%.
A predictable partisan split was also observable. 55% of Democrats were worried about the safety of their bank accounts in September of 2008 (under Bush Jr.) versus 34% of Republicans, whereas just 36% of Democrats are concerned now (under Biden) versus 55% of Republicans. It’s a mirror image, which underscores how partisanship shapes our perceptions of reality.
Gallup doesn’t track these figures over time, so it’s possible Americans are always this worried about their money, but Gallup doubts that’s the case.
They offered a tentative explanation as to why the less fortunate and undereducated are more concerned. “When banks fail, it is unclear whether Americans’ heightened concern about their own deposits reflects a lack of awareness of the protections for small accounts provided by federal deposit insurance or their fear of a snowball effect that could bring down federal insurance as well,” the color accompanying the poll results said. “Lower-income adults [and] those without a college degree… may be higher because they do not know about FDIC insurance.”