Banks are typically a very safe place to keep your money. Not only is your money not going to be misplaced or physically destroyed, but it’s also been a tried and tested way for many many years when saving your money. We’re going to look at various reasons why the Bank is a very safe place to store your money.
1. Banks are too big to fail
This notion of banks being too big to fail has been demonstrated time and time again by the federal government. During severe economic downturns, the government has stepped in on multiple occasions and bailed out financially distressed banks. This has prevented banks from going under and going bankrupt.
The same can’t be said for smaller banks since they don’t hold as large of a workforce, nor handle that many transactions. However, over the years, smaller banks have gotten more creative, and in turn, are able to allow investors to make very large deposits. They then spread these funds between other smaller banks, and get to enjoy full FDIC coverage and protection.
2. Banks are backed by the Government
Just like how some banks are bailed out by the government, the government also has multiple programs that protect banks and the funds that they hold.
This government program insures funds that banks hold, up to $250,000 per individual. So if you deposit your funds in an FDIC insured bank, your funds are protected, up to $250k. Not all banks have this insurance, to make sure that you check with your bank and see if they are FDIC insured. If not, you might want to consider moving your money elsewhere.
Credit union federal insurance
Just like the FDIC insurance, credit unions also have the luxury of being federally insured. This insurance is just as safe as the FDIC, but primarily focuses on Credit Unions. So make sure that if you use a credit union, that it has these protections in place, and that you fall below their limits.
3. Banks have a rating system
Just like how an Uber driver has a rating, or a hotel has a rating, banks also have a rating system. This system helps people to figure out just how safe a bank is, and if you should worry about banking with them.
Services like Veribanc and BauerFinancial offer these services, and you can use them to get a detailed report on the bank you use or are interested in. Some of these services are paid, but they can give you a good understanding of how a bank is doing at any particular time.
4. Bank robberies aren’t a concern
Yup, you heard that right! Most of the time, when a bank experiences a robbery, you probably aren’t even aware that it happened. This is because banks are almost always insured against robberies.
Since the invention of the internet, robberies have become more and more digital, so you don’t hear about the violent robberies occurring that often anymore. So you shouldn’t worry about your money getting stolen from a robbery, as it is already insured.
During times of economic uncertainty, a lot of people turn to withdraw money from their banks, fearing that they might lose their money. With all the reasons stated above, keeping your money in a safe and insured bank is definitely your best bet.
At home, under your mattress, or in a safe, is not going to be a good idea. If your house encounters a natural disaster, or you misplace your money, or even pests get to it, that money is gone. Your cash at home is not protected by the bank or the government, so when it’s gone it’s gone.
So to answer the question, yes, your money is very safe in the bank!
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