Your Money Might Not Be As Safe As the FDIC Claims – Here’s Why
Will our cash continue to be there when we want it?| Source: AP Photo/Hektor Pustina
- There have been reports of people rushing to withdraw cash sums from their bank account in light of the coronavirus pandemic sweeping the world.
- The FDIC is stressing to citizens that the safest place for their money is their bank.
- If the coronavirus spreads to such an extent that people aren’t able to carry out critical jobs, the flow of cash could dry up quickly.
The FDIC recently said that our money is safest in banks, but voices of authority haven’t felt as trustworthy lately.
I can’t be the only person who’s gotten emails from grocery stores telling us not to worry about food and household goods shortages in light of coronavirus panic-buying.
They say that everything is under control, workers are ready, and stock is ample.
And yet, every time I go to a store in my city, it’s just empty shelves and staff who can’t answer any questions about when stock will be replenished.
So when financial authorities say that everything is under control, it doesn’t feel like a sure thing.
The FDIC Can’t Control This One Factor
I know that bank deposits are insured and protected to at least $250,000. I also know that the bigger, more popular banks are well-capitalized.
Matt Daly, head of corporate municipal teams at asset management firm Conning, said:
The banking sector is so much better capitalized right now than it was during the 2008 financial crisis. Regulations have only benefited them. Liquidity is there. This crisis feels a lot different than 2008. That was a true challenge to the plumbing of the financial system. We don’t have that now.
I get all of that. Honestly, I do. The problem is that there’s a wildcard in all of this.
People.
It’s the unpredictability of people that’s causing the panic-buying and near-riots in grocery stores across America and Europe.
What if today’s toilet roll and rice are tomorrow’s cash reserves?
As the Workforce Dwindles, Will We See ATM’s Stocked Regularly?
ATM’s are stocked manually by people. There’s no real worry about ATM’s not having enough cash reserves to accommodate everyone who needs money at the moment.
But we don’t know how far this coronavirus pandemic is going to go. It could continue to gain momentum, and sooner or later, those ATM’s workers may not be so readily available.
What then?
That’s why I’m one of the people who made a cash withdrawal this week. I didn’t go crazy. I’m not emptying my bank account by any stretch.
But it never hurts to have some cash on hand, just in case.
Disclaimer: The above should not be considered financial advice from CCN.com. The opinions expressed in this article do not necessarily reflect the views of CCN.com.
