Is My Money Safe in the Bank?
It’s difficult to be prepared for every emergency situation that may arise. Amidst panic and crisis, people sometimes withdraw large amounts of cash from the bank as a way to prepare themselves for the unknown. Is this the right thing to do? Or is your money safest in the bank?
The answer: in the bank. In fact, experts are arguing that it’s safest in the bank—and we agree. Bank deposits and balances up to $250,000 per depositor are insured and protected by the FDIC (Federal Deposit Insurance Corporation). This insurance is applicable to each account you own whether it is a checking account, savings account, or certificate of deposit (CD).
Let’s talk about a few money options people tend to think about during a crisis situation:
While having some cash on hand for emergencies is reasonable, there’s no need to empty your bank account. If your money is not in your bank account, it’s no longer insured by the FDIC nor is it accruing interest, which is a great (and easy) financial investment.
Note: While it’s still okay to use cash these days, be cautious and always wash your hands after handling.
This account is your future financial security. There will naturally be ups and downs in the market; however, like your bank accounts, withdrawing funds will diminish your investment, and not protect it. Keep calm and continue to contribute to your 401(K) if financially able to do so.
Your financial needs are a top priority every day, including during emergencies. Electronic services such as online banking, mobile deposit and digital payment apps (such as Apple Pay, Google Pay, Venmo, and PayPal) are highly encouraged if banking hours or limitations on lobby hours are restricted.
What Should I Do?
Here are a few things to keep in mind when it comes to your money during times of uncertainty:
- Keep contributing to your 401K or other retirement accounts
- Continue building your savings and emergency accounts
- Evaluate your budget, focusing on your daily and monthly financial needs
Dealing with an emergency or crisis situation is stressful. You shouldn’t have to worry about your bank accounts too. It may seem counterintuitive, but take this time to be appreciative of what you do have—an emergency fund, a savings account, a retirement account and a flexible budget to see you through a difficult time.
During this time of uncertainty, we want you to know that we are here. The financial security of our customers is of the utmost importance to all of us at Auburn Savings. If over the next six months you find you are struggling or concerned about your finances, call us. We are a community bank and we are ready to serve you.
Source: fdic.gov, Forbes.com, vice.com, bankrate.com