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Savings lost $1.1 trillion in purchasing power in 2022

In 2022, inflation rose to 6.5% while bank accounts paid an average of 0.44% interest, costing depositors $1.1 trillion in purchasing power.

In 2022, the inflation rate increased to 6.5%, while the average interest earned on bank accounts was 0.44%, leading to $1.1 trillion in purchasing power loss.

The largest decline in purchasing power, $447 billion, hit depositors at the 6 biggest banks: JPMorgan Chase, Bank of America, Wells Fargo, Citibank, US Bank and PNC Bank.

Purchasing power lost by depositors at the six largest banks, 2022
  1. JPMorgan Chase Bank−$123.40B
  2. Bank of America−$124.07B
  3. Wells Fargo Bank−$98.98B
  4. Citibank−$45.51B
  5. US Bank−$27.73B
  6. PNC Bank−$27.71B

Compound interest is the most powerful force in the universe. He who understands it, earns it; he who doesn’t, pays it.

Purchasing power lostChange vs. 2021Loss per accountChange vs. 2021
$1.1T↑ 14.1%$1.2K↑ 19.5%

How we calculated this

For 2022, and for 2021 to show the change, we analyzed the call reports every US bank files with the Federal Financial Institutions Examination Council (FFIEC):

  1. We added up the balances held in accounts that pay no interest, such as most checking accounts.
  2. We added the interest paid on all savings accounts, giving a weighted average rate across every deposit account, including the ones that pay nothing.
  3. We compared that average rate with the inflation rate for the same year, measured by the Consumer Price Index for All Urban Consumers (CPI-U), December to December. The difference, applied to total deposits, is the purchasing power lost that year.

Loss per account is the total divided by the number of deposit accounts.

This describes deposits across the whole banking system, not any single account, and it doesn’t account for taxes on interest or account fees.

To see what inflation does to a balance of your own, try the calculator on our homepage.