US Banks Experience Historic Depositor Exodus Amid Banking Crisis

Americans withdrew a record $472 billion from their bank accounts in the first quarter of 2021, according to the Federal Deposit Insurance Corporation (FDIC). The decline in deposits is the largest reported since data collection began in 1984, with the primary driver being uninsured deposits as people moved to protect capital above the $250,000 FDIC insured maximum. The mass exodus follows the failures of several banks triggered by the Federal Reserve's aggressive interest rate hikes. As depositors leave the banking system, money market funds have witnessed massive weekly cash inflows, with assets held by money market mutual funds surging to a record high of $5.6 trillion.