Would you withdraw your money?

[M&M's Mommy]

News that banks go bankrupt one after another make my husband nervous. He wants to close our saving account at our bank and bring the little money we have there home. I don't wanna.. thinking that first of all, there are $100,000 FDC (sp?)warranty for each account in case the bank goes bankrupt, secondly, I think it's much safer to have money at the bank than at home, thirdly, money at bank yields interests while money at home does not.

Should I convince my husband that it's still safe to keep our money at the bank, or am I wrong?

What would you do?

[shepgirl]

Ffunny you should bring that up...I was just thinking about the same thing myself. I know they insure your money but if they go bankrupt where does the insurance money come from. I prefer not having it at home but I have 3 different accounts and I do worry about banks lately.
All in all I know it's safer in the bank, but the doubt is still there.

[Karen]

Absolutely don't withdraw your money. If you are worried, and have over $100,000 dollars in any single account, call your bank and ask what limit their FDIC insurance covers. If it is $100,000, consider opening another account somewhere else, and splitting the money.

The money will come from the Federal Deposit Insurance Company. All banks are required to have FDIC coverage.

Withdrawing all your money will do you no good, in that it will no longer earn interest, and will do the economy harm, as if too many people do it, it can snowball, and that's what sparked the Great Depression.

shepgirl, you are in Canada, so I do not know about your banking system.

[M&M's Mommy]

Oh, we have much less than $100,000 - that's why I don't worry too much.. but my husband's reason is that what if all the banks go bankrupt all at once, and the FDIC runs out of money to pay, plus there would be millions of people to pay.. what'll happen then?

I guess since we have so little, every dollar means so much to us now, and the thought of loosing them all is scary.

[Karen]

Tell him it is okay, but not to worry too much. THE FDIC was set up to prevent an event like the Great Depression from happening again. Here's a good page that should answer all your questions about the FDIC:

http://www.fdic.gov/deposit/index.html

[Catlady711]

Oh, we have much less than $100,000 - that's why I don't worry too much.. but my husband's reason is that what if all the banks go bankrupt all at once, and the FDIC runs out of money to pay, plus there would be millions of people to pay.. what'll happen then?

I guess since we have so little, every dollar means so much to us now, and the thought of loosing them all is scary.

Funny thing, I went through this EXACT same thing with my hubby about 10 years ago (granted economy was better then) trying to get him to open a savings acct and a measly Christmas Club acct. Hubby wanted to keep all his money in the mattress!

I finally made him an appt with the bank manager to sit down and have a good talk with them about how things really work now-a-days. He now has a savings acct, Christmas Club acct, and even a CD! He's quite happy he finally decided to listen and I make a POINT of showing him the statements every month of the interest earned PLUS add up the interest year to date so he knows his money is working for him.

[Medusa]

Karen has given you good advice. If others feel the same way as your husband, there could be a run on the bank and that would be disastrous. FDIC will cover you should the bank fail. Let your money earn interest. It isn't safe at home anyhow. My neighbor just told me this weekend that she keeps tons of cash in her house. I told her "You shouldn't be telling people that. You shouldn't even have told me that." If words gets out, she can be robbed and then they might hit the entire neighborhood. Things like that can snowball very quickly.

[shepgirl]

Much the same except for the insurance part in Canada. But that's why I have 3 seperate accounts, I'm greedy for higher interest rates and I only need a small one for paying bills and stuff. I would be too scared to take it out but I do worry with all the turmoil around us.