USA - Bank customers continue to withdraw money from their accounts

Private households and companies often hold daily available wealth in their bank accounts. These are known as bank balances or bank deposits. Money market funds are an alternative. These mainly invest in highly liquid and short-term debt instruments, such as US government bonds with a remaining term of 3 months. For investors, the income from money market funds is currently significantly higher than the income from bank deposits. Since fall 2022, this has led to customers withdrawing more and more money from banks and investing in money market funds. This trend has accelerated again in the USA following the bankruptcy of SVB. On Friday, March 31, there was new data from the Federal Reserve System as at March 22.