The End of Retail Banking as a Place to Store Your Money

For generations, retail banks were seen as the safest place to keep money. Checking accounts offered convenience, savings accounts promised growth, and branches stood as symbols of security. That model worked in the past. Today, it no longer adds up. Leaving money in a retail bank has become one of the worst financial choices a consumer can make.

Better Yields Outside the Banks

The reason is obvious. Banks pay almost nothing on deposits. The average savings account in the United States still earns under 0.5%. Inflation has been running several times higher, which means every dollar in a bank account is quietly losing value. At the same time, banks lend those same deposits out at far higher rates and pocket the profits. This spread, known as net interest margin, is the lifeblood of retail banking. Deposits are how banks survive, yet for customers, they are dead weight.

Today, consumers have better options. Robinhood pays 3.75% APY on idle cash through its brokerage sweep program, nearly ten times what banks offer. Coinbase gives 4.10% APY on USDC stablecoin balances. PayPal offers close to 4% on its PYUSD stablecoin. SoFi pays around 3.8% APY on checking and savings accounts with direct deposit.

Public.com, a brokerage that also supports crypto, offers 4.1% APY on uninvested cash. Moomoo, another brokerage with crypto support, pays the same. These are mainstream, regulated platforms that highlight how far behind banks have fallen. If consumers can earn 3% to 4% or more elsewhere, why should anyone park their cash at retail banks? Keeping savings there has become an outright irresponsible financial decision.

And for those who still want physical cash, fintech and crypto platforms make it just as easy. Most now issue debit and credit cards that work anywhere Visa or Mastercard is accepted, including ATMs. Liquidity and access are not lost. The difference is that instead of earning 0.5% or less, consumers are earning many multiples more while keeping the same flexibility.

Banks will not disappear overnight. Institutional clients and corporate lending will keep them relevant for years to come. But the retail side of the business is crumbling. The model of checking and savings accounts as the default place to store money no longer makes sense in a world where consumers can open an app and earn a meaningful yield instantly.

There’s no way to earn extra yield without accepting some level of risk. Even the most established fintech and crypto platforms involve tradeoffs. Centralized services require trust in a custodian, while non-custodial options put more responsibility on the user. That does not mean yield opportunities should be ignored, but it does mean people need to do their own due diligence. As the industry matures, the risks are falling and the opportunities are becoming more compelling.

Retail banks were built on the promise of keeping deposits safe and accessible. That remains true, but safety alone is no longer enough. By paying near zero, banks make deposits a cost for customers. Every dollar left there loses value to inflation and misses out on yield available elsewhere. Fintech and crypto platforms show that people can have safety, liquidity, and meaningful returns at the same time. As more consumers recognize the true cost of leaving money in banks, deposits will flow out, and the retail banking model will keep collapsing.

The following Op/ed was authored by Bitcoin.com’s Head of Sales & Business Development Ben Friedman. Follow him on X, and Linkedin.