Cash Beats Yields as Consumers Prioritize Access to Funds

The certainty that money is available when needed has become a defining concern for households.

We’re all navigating elevated prices and higher borrowing costs at the same time that income streams have grown less predictable.

In that environment, access to funds carries practical weight that often exceeds the incremental benefit of earning additional yield on deposits.

Speed, rather than return, may be the operative variable. When bills arrive before paychecks, or when hours fluctuate, the timing of income determines whether households can meet obligations without resorting to credit.

PYMNTS Intelligence data, as found in the ongoing Wage to Wallet series, created with Ingo Payments and WorkWhile, shows that even small disruptions in pay cycles or wage levels translate quickly into reduced spending and increased financial strain.

Speed Matters More Than Rates

Rising interest rates have increased yields on savings accounts and short-term instruments, offering consumers more opportunity to earn returns on idle balances.

Yet the Labor Economy, comprising roughly 60 million workers earning less than $25 per hour, illustrates the constraint. These workers account for about 15% of total consumer spending, and their financial position is closely tied to income continuity. Their savings buffers are limited, and disruptions in pay or hours ripple through spending patterns with unusual speed.

This dynamic weakens the appeal of yield optimization. For households operating with thin liquidity, the ability to access funds immediately outweighs the benefit of earning marginally higher returns. As the data indicates, even a modest 0.81% decline in wages corresponds to an estimated $14 billion annualized reduction in spending.

Yield Exists, But Access Drives Decisions

The coexistence of higher rates and rising financial fragility has created a tension between theoretical and practical value. While higher yields reward savings, they do little to address short-term cash flow gaps.

The findings show that fewer than one in three Labor Economy workers could access $2,000 in cash within 30 days for an emergency. At the same time, reliance on revolving credit remains elevated, with more than one-third of workers carrying balances regularly.

Access to funds becomes a mechanism for avoiding fees, managing volatility and maintaining spending stability. Yield, by contrast, becomes a secondary consideration, relevant only when liquidity is already secure.

Wage to Wallet: Timing Is the Constraint

Income volatility and delayed access to wages create a measurable drag on consumption. Missed shifts, irregular scheduling and delayed pay cycles compress household liquidity and force adjustments in spending behavior.

Conversely, faster access to wages improves financial resilience. In a separate report, PYMNTS Intelligence and Ingo noted that payroll has been moving sharply away from checks, which dropped from 34% to 17% of activity here over the five-year period. At the same time, more recipients received funds instantly to their bank accounts or cards.

A majority of workers opt for instant or near-instant disbursements when available, even at a cost. Immediate access reduces reliance on high-cost credit and allows households to smooth expenses between pay periods.

Spending and Borrowing Follow Cash Access

The timing of funds availability has direct implications for how consumers spend and borrow.

When access to income is delayed, households defer purchases, reduce discretionary spending and rely more heavily on credit products. More than one-third of Labor Economy workers carry revolving balances, with average balances exceeding 22% of annual income.

By contrast, when income is accessible in real time, spending patterns stabilize. Households can meet obligations without incurring additional borrowing costs, and consumption becomes less sensitive to short-term disruptions.

Speed as a Competitive Lever

For banks and financial institutions, the implications extend beyond product design to competitive positioning.

Traditional institutions have emphasized rates as a differentiator, particularly in deposit gathering. FinTechs and digital-first platforms, by contrast, have focused on speed, offering instant payouts, earned wage access and real-time money movement.

The data indicates that speed is gaining ground as the more relevant value proposition. When consumers weigh the benefits of higher yields against the ability to access funds immediately, the latter increasingly prevails.

This development creates an opportunity for banks to compete more directly with digital upstarts by rethinking payment timing, disbursement infrastructure and account features. Real-time payments, instant wage access and on-demand liquidity tools move from optional enhancements to core offerings.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.