Americans Hoarded ‘Mattress Money’ to Survive During Pandemic


Remember all the toilet paper people hoarded at the start of the pandemic? Turns out they hoarded cash and other easy money, too, and for the same reason: survival instincts.

Check out this chart, which shows how Americans reacted financially to the Covid-19 pandemic. They took money out of time deposits, such as certificates of deposit, and put more money into accounts that gave them faster access. The numbers are derived from the Statistics on Depository Institutions Report of the Federal Deposit Insurance Corp.

Cash Is King When ‘Money Anxiety’ Runs High

Dollars in U.S. accounts at the end of each year’s first quarter

Source: Federal Deposit Insurance Corp. *Includes checking accounts, money market deposit accounts, and other savings accounts


The chart is inspired by Dan Geller, the founder of San Francisco-based Analyticom LLC, which applies insights from behavioral economics to how people make financial decisions. Geller uses the FDIC data to calculate a Money Anxiety Index, which he says shot up during the pandemic.

“This is hoarding. Mattress money. This is our defense and survival mechanism that tells us that we need to hoard food and wood and stay in the cave,” Geller says in an interview.

To measure liquid deposits, Geller combines demand deposits with two other types of deposits that the FDIC categorizes as non-transaction accounts, namely money market deposit accounts and “other savings deposits.” I clustered the categories the same way to make this chart. The line for time deposits consists mainly of certificates of deposit, which pay more interest but carry a penalty for early withdrawal. 

One obvious question is why there wasn’t more evidence of money anxiety in 2009. As the chart shows, money in time deposits actually rose from the first quarter of 2008 to the first quarter of 2009. Geller’s emailed response: “The financial crisis was a gradual recession because of the root cause of the crisis—subprime mortgages.” Most of the defaults on subprime mortgages occurred in the years following the 2007-09 recession, he says. The pandemic downturn was shorter and sharper.

Another question is whether the FDIC data captures the behavior of individuals, since a lot of the deposits are controlled by businesses, not households. To Geller, that’s a distinction without a difference. “That’s the biggest misconception in the world. Who do you think makes the decisions in a partnership or a corporation? People. At the end of the day we’re all people and human behavior is universal.”



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