Americans’ bank accounts vary dramatically across the country, with Hawaiians enjoying over 20 times more cash savings than Mississippi residents.
Key Insights
- Hawaii leads the nation with a median household bank balance of $43,600, while Mississippi has the lowest at around $2,000.
- Southern states generally have lower bank balances, correlating with higher poverty rates in these regions.
- Surprisingly, New York, despite having the most millionaires, ranks only 22nd in median bank balances.
- To be in the top 1% of earners nationally requires income of nearly $788,000, but this threshold varies dramatically by state.
- The growing wage gap is evidenced by the top 1% seeing 172% wage growth since 1979, compared to just 33% for the bottom 90%.
The Geography of American Savings
A comprehensive 2024 analysis by SmartAsset reveals striking disparities in how much cash Americans keep in the bank depending on where they live. Using 2022 median bank deposit data from the Bureau of Labor Statistics, the study paints a clear picture of financial inequality across states. Hawaii stands out with an impressive median bank balance of $43,600 per household, while Mississippi residents maintain approximately $2,000—a staggering 21-fold difference. This dramatic disparity reflects deeper economic realities affecting families’ financial security and highlights regional economic divisions that persist in America.
The correlation between income levels and savings is evident in many states but doesn’t always follow predictable patterns. Higher median incomes typically lead to higher bank balances, but significant exceptions exist. New York, home to the largest number of millionaires in the country, ranks just 22nd in median bank balances, suggesting either substantial wealth inequality or different financial behaviors such as increased investments or higher spending patterns among residents. This unexpected finding challenges assumptions about wealth distribution in traditionally “rich” states.
The Wealth Gap Across States
The income required to join the top 1% of earners varies dramatically by state, highlighting economic disparities nationwide. In West Virginia, earning $420,000 annually places a household in the top 1%, while California, Massachusetts, and Connecticut demand seven-figure incomes exceeding $1 million for the same status. Nationally, approximately $788,000 in annual income is required to join this exclusive group, which represents just 1.49 million Americans. These thresholds reflect substantial differences in cost of living, economic opportunities, and regional industries.
“The question is, What does it mean to be rich?” asks Elise Gould a senior economist at the Economic Policy Institute, a left-leaning thinktank.
Even more exclusive is the top 0.1% category, where average earnings exceeded $2.8 million in 2023. This ultra-wealthy group controls approximately 14% of all wealth held by American households. The minimum net worth required to join the top 1% of U.S. households is approximately $13.7 million, with this group collectively holding $49.2 trillion in wealth as of the third quarter of 2024. These statistics underscore the concentration of wealth at the highest economic levels in America.
Regional Patterns in Savings
A clear geographical pattern emerges when examining bank balances across regions. Southern states consistently show lower bank balances compared to other regions, a trend that aligns with higher poverty rates in these areas. Mississippi, which has the lowest median bank balance at approximately $2,000, exemplifies this pattern. Other southern states with notably low savings include Kentucky, Arkansas, and New Mexico. This regional disparity suggests systemic economic challenges affecting residents’ ability to accumulate cash reserves for emergencies or future investments.
“There’s either lifestyle or business opportunities in all of these places,” notes Jaclyn DeJohn director of economic analysis at SmartAsset.
Hawaii presents an interesting anomaly in the data. Despite its economy ranking just 38th nationally, the state boasts both a high median income and the country’s highest median bank balance. This surprising result may stem from Hawaii’s significant number of millionaires, high cost of living necessitating larger cash reserves, and unique economic factors related to its geographic isolation. The contrast with states like Texas, which has strong economic growth but lower median savings, demonstrates that state economies and individual financial behaviors don’t always align as expected.
Growing Income Inequality
The SmartAsset state-by-state analysis comes against a backdrop of rising wage inequality across America. Since 1979, the top 1% of earners have experienced a 172% growth in wages, while the bottom 90% saw only a 33% increase during the same period. This disparity is further highlighted by CEO compensation trends, with top executives now earning 290 times more than typical workers, compared to just 21 times more in 1965. These statistics reflect fundamental shifts in the American economy that have concentrated income gains among the highest earners.
“On average, you’re probably saving 6 or 7% of your income every year on that factor alone,” explains Jaclyn DeJohn.
The analysis reveals that financial security varies dramatically based on geography, with state-specific economic factors significantly impacting households’ ability to save. While income thresholds and bank balances provide important metrics, they tell only part of the story of Americans’ financial health. The substantial variations between states highlight the need for policies addressing regional economic disparities and opportunities. As wage growth continues to favor top earners, the ability of average Americans to build financial security through savings remains an ongoing challenge affecting millions of households.
