Uninvested dollars miss the chance to earn a return. Continuously missing out on that chance is costly.

You may read the title and think, “But my checking account doesn’t have any fees.” This may be true, but there is more to cost than simply the price you pay for something. There is the cost of missed opportunities.

The money in checking accounts could be doing much more for you. If your cash is earning 0% instead of at least 4% (like our Fidelity money market is currently earning), that 4% is the real cost of the checking account.

Instead of $10,000 becoming $10,400 in the money market it just sits at $10,000… so that account really cost you $400 that year. And that is just one year. Compounding widens that gap quickly.

This is exactly what banks do with your deposits — they put that idle cash to work. While your cash earns you nothing, they’re lending and investing it… the only difference is who benefits from that return.

This isn’t just a personal issue — it’s systemic. Americans hold nearly $4.5 trillion in checking accounts earning close to 0% interest. This costs households billions in missed returns each year.

Why don’t banks pay interest on checking accounts? In 1933, during the Great Depression, a law (Regulation Q) actually banned it. The goal was to strengthen banks and prevent competition that could destabilize them. Even though the rule was repealed in 2011, that ban set a trend that still lingers today as most banks continue to pay next to nothing.

Opportunity costs don’t stop with checking accounts. Even dollars earning 5% in bonds may be missing out on the higher long-term growth potential of equities. This dynamic shows up across all of investing, and it becomes especially clear in moments of fear.

Look at 2008, and again in early 2020. When markets fell, many investors pulled out to avoid further losses. But they also missed the powerful rebounds that followed.

• After the 2008 crash, the S&P 500 doubled by 2013.
• In 2020, it recovered over 60% within nine months and passed pre-COVID highs in under five.

In moments of fear, doing nothing can feel like the safest choice — but over time, doing nothing is often the most expensive.

What we recommend and how we can help:

• Invest as much as you’re comfortable with.
• Don’t let cash just sit — we’ll ensure you have the right type of account, linked to your checking, so extra cash is earning for you.

• • Funds can earn ~4% in a money market, or potentially more in bonds or our equity investments depending on your goals.
  • Your money remains accessible, but now it’s working for you.

We, of course, are here for you. Please reach out if this is something of interest to you and your family.