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Germans hoard an average of 1364 euros in cash

I.On average, every German holds 1364 euros in cash at home or in a locker. This does not include the money in your wallet, which is an average of 107 euros. This emerges from a study by the Bundesbank, which was published in the monthly report on Monday.

Since the introduction of euro cash in 2002, the Bundesbank has put net cash in circulation of 780 billion euros. Since cash is anonymous, there are relatively few official statisticians where the money went. The study is based, among other things, on survey results from 2018. Of the 690 billion euros in circulation by the Bundesbank to date, almost 423 billion euros are said to have been abroad.

The transaction checkout, i.e. the money used directly for payments, amounted to 58 billion euros. Around 200 billion euros were hoarded domestically by companies and private individuals. According to the study, about half of this, 94 billion euros, is attributable to private individuals, which is more than 1,000 euros per person.

However, these cash stocks are distributed very unevenly. In the survey of 2,000 Germans, 22 percent said they had no cash reserves at all. 50 percent held 200 euros or less. 75 percent held the highest 500 euros. Amounts of more than 5000 euros were only given in 5 percent of the cases. The highest value mentioned was 100,000 euros.

The Bundesbank writes that the very different levels of cash holdings have three causes. First, there were different preferences for cash and book money in the population. Second, the distribution of cash holdings is based on the distribution of income and wealth, which in itself is already concentrated. And thirdly, there could be different storage motives behind the individual cash amounts: Larger sums would result, for example, if cash was held as part of the assets in the long term. Smaller amounts are more of a kind of precautionary fund that will be used again in the foreseeable future.

The amount of cash on hand increases with age up to 65 years, after which lower amounts are more likely to be observed. This could be because people saved for retirement and then spent the money again. With regard to income, it can be observed that higher cash holdings usually indicate a high income. But among people with little cash there are both those with high and low incomes. The self-employed have a lot among the occupational groups, civil servants have little cash.

No tax evasion

The Bundesbank also wanted to know whether the high cash holdings could have something to do with tax evasion. To do this, she went two ways: People with large cash holdings were asked what motives were behind the holding of cash. And with other questions, attempts were made to find out indirectly the tax morale of the respondents and to correlate this with the cash held. However, both methods showed no connection.

The main reasons people gave were that banks had hardly any interest anyway, that cash could also be used even if the technology didn’t work, and that cash did not cost any fees. There was no statistical connection between the amount of cash and other statements on tax ethics (“I am already happy to pay my taxes in Germany because I know that the state finances important things with it”).

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