How wise or unwise do you think it is to keep your money in cash? I have never had a bank account in my life (due to my brother losing all of his money from one without explanation); I have always kept my money in a lockbox in my house. Of course, I've never had tens of thousands to spare at a time; but now that I'm done with school and I should be getting a higher paying job, my balance has nowhere to go but up. Does anybody else keep their money in cash? Why or why not? Is it time to give up and get a bank?
So long as the bank's FDIC insured or using a legitimate alternative for those outside the US, then i'd always go with the bank over storing cash. Savings Accounts are available without recurring payments and do give interest on the balance though it's usually a couple bucks annually for anything under a grand. I have about $100 in cash that I keep at my house and i'd keep more there if I had more savings in total since it's good to have money near you in case of an emergency but I try to keep most of my savings in the bank because again if it's FDIC insured, your money can be replaced if it's stolen(as long as it's under a certain amount which is far over "tens of thousands"). I'd consider getting a savings account, it's no loss situation with the FDIC insurance.
>I'd consider getting a savings account, it's no loss situation with the FDIC insurance. What about bank error or fraud? Can you make your savings account so that you can only withdraw in person, thus eliminating the possibility of somebody stealing your pin number for the ATM. I don't really know how these things work.
>>113 FDIC insures up to $200,000 for a typical savings account. >>116 Banks have fraud protection, they're legally obligated to return any money stolen from you via fraud. I don't know if you can set up a savings account that way, the way to find out about that is to walk into your local bank and ask your local bank rep. That said, I would imagine they'd be happy to accommodate you.
>>116 >>117 I don't know about most banks but I use a credit union(Alta One) and I never got an ATM card so nobody can withdraw without showing up. On top of that, I once thought I lost my wallet with my pin number in it so they had me choose a password to verbally recite along with showing my ID to gain access to the account. I'm sure plenty banks will offer security measures at your request since I doubt they want to end up owing you money.
If someone breaks into your house and steals your cash you will never get it back. If someone gets a hold of your bank account information and makes fraudulent charges you will most likely get the money back. Cash is king. But it's kind of a pain in the ass. It's good to keep some cash around for emergencies but if you sit down with a local credit union(or bank) they will walk you through it all. Banks these days like to charge you wacky fees so get all the details.
No. Put them into a bank account on a bank that you trust and that gives you a good intrest. Alternatively you could invest them in stocks, bonds or minerals but that is of course riskier but there are for example stocks that follow index and comes with reasonably small risks, but will probably not make your money grow by a whole lot. If you choose to invest then I advise you to research and try to learn the basics of how the stockmarket works first and start with small sums. Just keeping your money in cash will make your money less worth for every year due to inflation.
Try to use a credit union rather than a bank, they don't charge a bunch of junk fees. >>117 FDIC and NCUA insure up to $250,000 dollars now.
Disadvantages as noted, inflation, theft, no interest, no FDIC, no gains from investment, maybe your house will burn down or weevils will eat it. Advantages: Cash transactions are very private, and easy to hide from Mr. IRS.
>>141 You're right. I assume OP is getting a job that will automatically withhold and report to the IRS though, so cash really doesn't have any advantages unless you're making large foreign cash investments that would be taxed heavily or something. Inflation will slaughter you if you hold cash. Treasuries are getting one SIXTH of real inflation as returns currently. You'd have to do some actual real investing to beat inflation. From what I understand FDIC is pretty much to be used only for runs on banks when they run out of money to pay depositors and are about to fail. I don't think they have anything to do with insuring against identity theft or fraud. FDIC primarily exists to keep confidence in the banking system high. If you actually need to use it and get your money, the whole economy is pretty fucked anyway.
>FDIC primarily exists to keep confidence in the banking system high. If you actually need to use it and get your money, the whole economy is pretty fucked anyway. That's when the economy morphs from zombie into pyramid.
>>146 No, someone just adds a bunch of zeros to the end of a number on a computer and your $250k is now morphed into enough to buy a 24" color tv and 3 loaves of bread.
Just like the stock market the best (safest) thing you can do is diversify. Split your cash in a heavy fireproof safe in your house, and in multiple banks. Don't keep it all in cash either think about precious metals (If American I suggest waiting to buying these after the economy recovers and the price drops from where it is now), stocks (especially foreign and S&P 500), and the like.