No, banks generally do not do well in a recession as they are highly cyclical, suffering from increased loan defaults, lower loan demand, and reduced consumer spending, leading to lower profits and vulnerable stock performance, although strong capitalization and central bank actions (like rate cuts) can provide some support and long-term investors might find value in high dividend yields. While individual depositors are protected by insurance (like FDIC), the institutions themselves face significant headwinds, though modern efficiency investments and past regulatory changes have altered outcomes compared to crises like the Great Depression.
During recessions, consumers and businesses may struggle to meet their loan obligations, leading to higher rates of loan defaults, which directly impact banks' profitability. Additionally, central banks often reduce interest rates to stimulate economic growth during recessions.
Some stock market sectors, such as health care and consumer staples, generally perform better than others in a recession. Healthy large-cap stocks also tend to hold up relatively well during downturns. Investing in broad funds can help reduce recession risk through diversification.
Yes, your money is safe in the bank as long as it's in an FDIC-insured institution, and we recommend keeping it there in 2026. See our list of the safest banks in the U.S. During times of economic uncertainty, it's common to worry about your security.
Defensive sectors like utilities and consumer staples often hold up better during downturns. Cash options like money markets or CDs offer stability but lower yields.
Investing $1,000 a month for 30 years means you contribute $360,000 total, but with compounding returns, the final amount varies significantly by average annual return, potentially growing to over $1 million at 8% and reaching around $2 million or more at a 10% average return, illustrating the power of long-term, consistent investing.
Avoid becoming a co-signer on a loan, taking out an adjustable-rate mortgage (ARM), or taking on new debt. Don't quit your job if you aren't prepared for a long search for a new one. If you own your own business, consider postponing spending on capital improvements and taking on new debt until the recovery has begun.
It's not fully safe to keep $500,000 in one bank because standard government deposit insurance (like the FDIC in the U.S. or FCS in Australia) typically covers only up to $250,000 per depositor, per institution, per ownership category; the excess over $250,000 is unprotected if the bank fails, so you should spread your funds across different banks or use different ownership structures (like joint or business accounts) to ensure full coverage, or explore cash management accounts.
Cashless Society Statistics
13.4% of American consumers have stopped using cash completely in 2024, compared to 11% in 2022 (Source: Capital One Shopping) The average number of cash payments fell from 26% in 2019 to 20% in 2021 (Source: Federal Reserve)
If the United States were to enter a recession, the funds you have saved at a bank aren't at risk of becoming lost or inaccessible the same way they were during the Great Depression. There are many more laws and pieces of legislation that protect your money than in the 1930s.
Index funds, ETFs, and mutual funds can all be great for easily diversifying a $1,000 investment. Target-date funds: Commonly used in 401(k) plans and other retirement savings accounts, these funds are managed by professionals to grow more conservative as you get closer to your retirement date.
Consumer staples
Renewable Energy Services. With a global push for sustainability and green energy, renewable energy services are expected to witness explosive growth. Solar panel installations, wind energy solutions, and energy storage technologies are in high demand as businesses and governments focus on reducing carbon emissions.
How much $10,000 grows to in 10 years depends on the average annual return (interest rate/growth rate), ranging from around $13,500 at 3% to over $25,000 at 10%, illustrating the power of compounding; for example, at a common 10% market return, it could reach roughly $26,000, while a safer 3-4% CD might yield closer to $13,500 - $15,000.
Many banks around the world incurred large losses and relied on government support to avoid bankruptcy. Millions of people lost their jobs as the major advanced economies experienced their deepest recessions since the Great Depression in the 1930s.
You won't lose money in a deposit account during a recession as long as it's in a federally-insured account and within the limits of the insurance.
Finance experts believe that Australia is well on its way to being cashless, and that the change could come as soon as 2030.
The Access to Cash Review was set up by ATM network provider Link to help understand how consumers use cash and how behaviours will change as we head into the 2030s. It predicted that society would be at the point of being 'virtually cashless' by 2035, with fewer than 10% of transactions being made in cash.
Sweden is widely considered the country closest to being cashless, with a significant majority of transactions being digital, driven by mobile apps like Swish and high trust in digital infrastructure, though Norway, Finland, and South Korea are also leading the global shift. While some sources predicted Sweden would be fully cashless by 2025, the central bank is now pushing for cash protections, acknowledging its continued need for inclusivity, even as cash use falls below 5% in many top nations.
Yes, retiring comfortably with $500,000 is achievable. This amount can support an annual withdrawal of up to $34,000, covering a 25-year period from age 60 to 85. If your lifestyle can be maintained at $30,000 per year or about $2,500 per month, then $500,000 should be sufficient for a secure retirement.
Traditional savings accounts, generally reserved for short-term savings, available at banks generally yield low rates of interest. A million-dollar deposit with the average 0.45% APY would generate $4,510.08 of interest after one year. If left to compound daily for 10 years, it would generate $46,027.51.
His administration continued the banking bailout and auto industry rescue begun by the previous administration and immediately enacted an $800 billion stimulus program, the American Recovery and Reinvestment Act of 2009 (ARRA), which included a blend of additional spending and tax cuts.
Recession expectations remain subdued. Half (51%) of business leaders don't anticipate a recession in 2026. About one-quarter (27%) of respondents expect a recession or believe we're already experiencing one—down from 40% two years ago, but still higher than the 14% recorded at the beginning of 2025.
The Most Important Recession Indicators You Need to Watch Right Now: