Financial influencer Grant Cardone has called on individuals to cease saving money in traditional bank accounts due to near-zero interest rates, arguing that institutions profit from lending while offering minimal returns to depositors. The statement comes amid rising scrutiny over bank deposit yields and consumer financial behavior.
- Average savings account yields in the U.S. remain below 0.05%
- JPMorgan Chase (JPM) and Bank of America (BAC) maintain net interest margins above 2.8%
- Prime lending rates exceed 8.5%, creating a 840-basis-point spread with deposit rates
- Dividend ETFs such as SCHD, VYM, and BND have seen increased investor interest
- Cardone’s message reflects broader concerns about the opportunity cost of cash savings
- Retail trading activity in income-generating assets rose in the weeks following the statement
Grant Cardone, a prominent figure in personal finance education, has challenged conventional wisdom by advising Americans to stop saving in low-yield bank accounts. He pointed to the stark disparity between the interest banks pay savers—often below 0.1%—and the rates they charge borrowers, including high-net-worth individuals and corporations. According to public data, major U.S. banks such as JPMorgan Chase (JPM) and Bank of America (BAC) have maintained net interest margins above 2.8% in recent quarters, enabling substantial profit from lending activity while returning negligible yield to depositors. The average savings account yields less than 0.05%, as reported by the Federal Reserve, while money market accounts offer a slightly higher 0.15%. In contrast, banks are charging prime rates of 8.5% for business and personal loans, creating a nearly 840-basis-point spread. Cardone emphasized this imbalance, suggesting that individuals who save at these rates are effectively subsidizing financial institutions. He advocated for reallocating funds toward income-generating assets, such as dividend stocks and real estate, citing ETFs like Schwab U.S. Dividend Equity (SCHD), Vanguard High Dividend Yield (VYM), and iShares Core U.S. Aggregate Bond (BND) as alternatives. Market observers note that Cardone’s message could influence short-term consumer behavior, especially among younger investors and first-time savers. While formal data on a shift in deposit trends is not yet available, anecdotal evidence from retail brokerage platforms shows increased trading activity in dividend-paying equities and fixed-income ETFs. The sentiment may also pressure banks to reconsider deposit product offerings, particularly in competitive markets. The commentary underscores a broader debate about the role of traditional savings in an era of inflation and low real interest rates. Though Cardone’s recommendation is not a financial advice directive, it reflects growing awareness among retail investors about the opportunity cost of holding cash in low-yield accounts.