Banks might have become an essential part of daily financial transactions nowadays, but the unstable nature of the stock market and the news of big banks failing might make you reconsider the decision of keeping your money in a bank.
Nevertheless, banks are still the most intelligent and the safest places to put your money in. In case you are not exactly sure about the authenticity of the last statement, here are a few reasons as to why it’s true.
This is the first point on our list because it addresses the usual fear that people have about putting their savings in a bank; which is the fear of losing the money.
The Federal Deposit Insurance Corporation or the FDIC simply removes such a possibility from the equation as it constantly protects the money we deposit in our bank accounts.
In the highly unlikely event where your bank declares bankruptcy, or in situations of financial crisis, the FDIC maintained reserve cash will ensure that you don’t lose your money. The only thing you need to make sure is that you choose an FDIC-insured bank to do business with.
Your Money Multiplies in a Bank
Now that you know that federal insurance will protect you against the volatile bank market, it’s time to think outside the protective box and consider the fact that if you let your money sit at home, it will never really grow.
On the other hand, even the lowest interest rate on your money in the bank means that your savings are growing, and that adds up to huge amounts in the long run.
In fact if you really know how to invest your money in various schemes, you could be looking at a very bright financial future.
It’s Harder to Steal Money from a Bank
We are not only talking about bank security, which is usually a lot more potent than any general residential security system anyway.
We are talking about the fact that everything is insured in the off-chance that a bank robbery does happen. Everyone still has their money in their accounts and life goes on as usual.
If armed burglars attempt to steal from your home though, there’s a higher chance of them being successful and more importantly, you and your family might get hurt while trying to protect your hard earned savings from being stolen.
Since the money under your mattress does not really have any specific insurance coverage, your chances of getting it all back are very slim.
The Money in Your Home Could Get Destroyed
When in hard cash form, monitory bills are just a bunch of papers that a fire can burn to ashes or a dog can chew to bits. You could also misplace it or even forget where you placed it in the first place.
There are just so many things that can happen to hard cash and those dangers become even more prominent as the stack grows in size.
Keep in mind that putting your money in the bank does not necessarily mean keeping all your savings in one deposit or savings account.
There are multiple factors to consider such as how much of you income you want to save and for what specific purpose. Once you figure that part out, talk to your financial advisor to discuss how you can make the best of your savings.