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Scared of the stock market, worried about job stability and unsure about the direction of the economy, Americans are hoarding a record $5 trillion cash in bank money market accounts ready for instant withdrawal.

One financial analyst says it is a modern day twist on “stuffing money under the mattress.”

“Our instinctive reaction to uncertainty has not changed. However, our tactics have,” said Dan Geller, author of “Money Anxiety: How financial uncertainty impacts consumer financial behavior and the economy.”

“Before banks were what they are today with FDIC insurance, when people had uncertainty, they used to place money under the mattress,” he said. “This was the safest place because they were sleeping on it. If someone tried to take the money, they could feel it.

“Of course, we don’t do that today because money in the bank is insured. However, many people move money from CDs to checking accounts, savings accounts and money market accounts because it’s easier to withdraw the money in case of financial need.”

The Federal Deposit Insurance Corp. reported as of March 31 that money market accounts held $4.9 trillion in consumer deposits, representing 46 percent of all domestic deposits.

Such accounts hold the largest share of consumer deposits because they offer higher interest rates than regular savings accounts and have limited check writing privileges.

According to Bankrate.com, the average money market account with a $10,000 minimum balance is currently paying 0.49 percent interest compared to an average 0.38 percent for regular savings accounts.

Geller, a former professor of financial analytics at Dominican University in San Rafael, California, said since the beginning of the Great Recession in December 2007, many consumers have shifted their money to liquid accounts, such as checking, savings and money markets.

Money market accounts have increased by $2.3 trillion since the recession started, compared to a $1.4 trillion increase in savings accounts and $1 trillion in checking accounts.

“Part of this money would be invested in the equity market and part of it would have been spent — which is more critical to the U.S. economy — and part of it would have been parked in bank CDs for a period of time,” Geller said.

“Part of the reason why this money is not being used for all those things is there is still an uncertainty about the economy. That is the root cause of money anxiety.

“Things are OK for most people,” he said. “But financial confidence comes from going to bed at night knowing tomorrow will be a better day financially, meaning you’ll still have your job and be able to pay your bills and all the normal things people expect. This part is missing. …

“It leads those who have a few dollars to squirrel them away.”

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