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For most of 2022 the amount of money held in bank accounts was falling but people really started moving money out banks in 2023 after the several bank failures. Where has this money been going? For many wealthy people they have been moving their money into money market accounts and Treasury Bills.
While normal bank accounts come with $250,000 in FDIC insurance, money market and Treasury Bills are also backed by the U.S. government — and barring a government default (which will hopefully not happen) these funds are extremely safe for any amount. And with money market funds and Treasury Bills offering returns of 4–5%, many wealthy people are choosing to keep their money there instead of in a bank or in the stock market, which has been volatile recently. If you’re saving for a big purchase, perhaps waiting to buy a house until mortgage rates drop from their current 7%, or holding off on putting money in to the stock market since the direction of the U.S. economy is uncertain, now is good time to invest in Treasury Bills which are offering a relatively safe return for your savings. In this article we will discuss some of the advantages to these investments, where to invest, and why this good environment for government securities might not last.
