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Caren is a former banking and studies writer for NerdWallet, where she used data to analyze the long-term effects of people's day-to-day financial decisions. Her personal finance articles have appeared in Money, AARP and USA Today.
Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
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More than three-quarters of respondents to a recent U.S. Bank survey said they never carry more than $50 in currency with them. Nearly one-quarter said they keep $10 or less.
And, when given a choice between paying someone with cash or a peer-to-peer (P2P) payment app, 47% said they would choose the digital option, as opposed to the 45% who said they'd rather use cash.
Michael Moeser, director of payments practice at the banking advisory firm Javelin Strategy, says that the growing usage of P2P payments is one reason people are carrying so little cash. Using P2P apps, people can easily split expenses with friends by transferring money into their accounts.
Even more important, he says, is the rise of digital payments for e-commerce transactions. Rather than going to the grocery store and paying with cash, for example, people now order groceries online and pay electronically.
These trends, combined with the now-widespread use of debit cards, have made carrying cash a rarity for many. Fully half of respondents to the U.S. Bank survey say they carry cash no more than 15 days per month.
So, ATM use must be falling off too, right? Yes and no. A Federal Reserve study found that the number of ATM cash withdrawals did fall from 2009 to 2012 — from 6 billion to 5.8 billion. That figure remained flat as of 2015. But as the number of P2P payment providers increases, it’s possible that could change.
Overall, there’s no doubt Americans’ cash habits are changing. Sending money has become virtually as easy as texting as social media apps have added payment options. Snapchat, Facebook and Skype now offer money transfer within their messaging services, and Apple plans to roll it out in its Messages app.
4.60%SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
5.50%*Base annual percentage yield (variable) is 4.75% as of 7/31/23. 5.50% APY reflects a .75% boost available as a special offer with qualifying deposit. Terms apply. Cash Reserve is only available to clients of Betterment LLC, which is not a bank, and cash transfers to program banks are conducted through clients’ brokerage accounts at Betterment Securities.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
5.60%All Bread Savings APYs are accurate as of 10/26/2023. APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. To open a CD, a minimum of $1,500 is required and must be deposited in a single transaction. A penalty will be imposed for early withdrawals on CDs. At maturity, your CD will automatically renew and earn the base interest rate in effect at that time.
0.50%SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Rather than see those digital-friendly consumers drift away to P2P platforms, banks hope to hang on to them by offering payment options within their mobile banking apps. Zelle, a P2P platform used by more than a dozen major banks (including U.S. Bank), is one example. Getting customers to use banking apps more often increases banks’ opportunities to sell them additional bank products beyond checking and savings accounts.
If you hate to carry cash and are interested in the emerging array of payment apps, there are plenty of options out there. Be sure to compare all the various features, including transfer speed, fees, security and user experience. In the end, some people may always prefer keeping some cash on hand. But these days, you don’t necessarily have to.
