Published: Tuesday, 22 Sep 2009 | 1:13 PM ET

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Experts who work with the wealthy and observe their spending habits say rich folks are sitting on their cash. Just like the rest of us, they're worried about the future. Suddenly uncomfortable with the nation's financial volatility, the wealthy are revisiting their investment and savings strategies, says Chris Geczy, director of the Wharton Wealth Management Initiative at the Wharton School in Philadelphia.

"They're consuming less and saving more," Geczy says.

Like so many other Americans, "the mass affluent were overextended" in real estate and investments gone sour, he says. Now, they are more likely to invest in fixed-income vehicles.

"They're still scared of risk," he says.

Investment professional Nancy Rooney has noticed this fear, too.

"There is a subset who -- since September and October -- are frozen and so nervous," says Rooney, managing director and head of the Northeast investment business for private wealth management at J.P. Morgan in New York, which says it serves 51 percent of the Forbes 400 list of U.S. billionaires.

"They're looking at their principal left and realize, 'If I lose any more, I'll jeopardize my quality of life,'" she says.

Here are a few ways the wealthy are saving in the current recession -- and lessons average investors can learn from the rich. 

Put safety first
Today, many wealthy people are thinking about safety over yield, Geczy says. The wealthy are scouring the Internet, looking for the best rates on CDs, money market accounts and other FDIC-insured options, he says.

"They're still hugging close to fixed income, Treasury bills and fixed assets," he says.

The FDIC only insures up to $250,000, so multiple savings accounts at solid institutions are key to liquid returns, says Tim Grizzle, a certified public accountant and CEO of Georgia Logic, an Atlanta-based financial planning firm for high net-worth individuals, who also wrote "Creating Wealth in a Turbulent Economy."

"Those who are cash-heavy spread the wealth over multiple banks to ensure FDIC insurance," Grizzle says.

Rooney says that when shopping around for a bank, it's important to look into an institution's overall financial health.

"Your biggest decision this year is where you're going to put your money," Rooney says.

As long as you choose a bank that's FDIC-insured, there will be no risk to the first $250,000 you deposit. However, if a bank fails and is taken over by the FDIC, your great rate could disappear, as there is no guarantee an acquiring bank will honor your previous institution's rate.

Banks that offer a much higher-than-average rate of return may be cash-strapped and at risk of failing, Geczy says.

On the other hand, competitive rates aren't necessarily a sign of trouble. For example, some online-only banks can offer great rates because they don't have the expenses of a brick-and-mortar bank, including everything from rent to electricity bills and janitorial services.

It takes a savvy researcher to discern the difference between a bank that's cash-starved and one that's an efficient operator. If a bank offers an unusually high return, ask questions, Rooney says.

"I wonder why it's above market -- why do they need deposits so desperately?" she says.

Before choosing a bank, investigate its Bankrate Safe & Sound rating. And remember that not all savings vehicles are alike -- some are federally insured while others aren't.

Protect against inflation
Like everyone else, the wealthy have to worry about rising prices eating into their savings. For now, inflation remains subdued; in fact, some experts are more worried about the prospect of falling prices, or "deflation."

Banks are paying out very low rates on savings instruments today. However, the return may be better than it appears, thanks to today's low inflation rate. For example, if you find a savings account with 1 percent interest in an environment where inflation runs minus 1 percent, you've netted a 2 percent rate of return.

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