Americans pull $472 billion out of US banks in three months as depositors withdraw in historic numbers

New figures from the Federal Deposit Insurance Corporation (FDIC) show that Americans are withdrawing their money each year at a pace not seen in four decades.

According to the FDIC’s recently released quarterly report, depositors withdrew a total of $472 billion from their accounts in the first quarter of this year – breaking a 39-year record.

“The quarterly decline is the largest reduction reported in the QBP since data collection began in 1984.

This was the fourth consecutive quarter that the industry reported lower levels of total deposits.”

The “primary driver” of deposit flight came from uninsured deposits, the FDIC says, as people moved to protect capital above the $250,000 FDIC-insured maximum.

An example – the amount of insured deposits held by banks actually increased during the quarter as people diversified their risk.

The mass exodus follows the failures of Signature Bank, Silicon Valley Bank and First Republic, which were largely triggered by the Federal Reserve̵[ads1]7;s aggressive rate hikes.

As depositors leave the banking system, money market funds have witnessed massive weekly cash flows.

As the first quarter drew to a close, assets held by money market funds rose to $5.6 trillion, according to Crane data, representing a record high.

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