Should You Keep All Your Money in the Bank?

Money Management is critical for financial success in this day and age, even for the most light-hearted events like Halloween. A key aspect of money management involves knowing where to keep your funds. Although people have traditionally held their money in banks, more and more people are beginning to question this. People want to feel more secure about their money. For example, if you receive a payday loan in Halifax, you want to be sure that the money is indeed safe.

Those against keeping their earnings in banks are wondering about other alternatives. Thankfully, there are options for people who wish to store their funds elsewhere.

The Necessity and Flaws of Banks

Banks are arguably regarded as a necessary evil for modern life. Virtually everyone has a bank account. These accounts are essential for transferring, receiving, and withdrawing funds. Nevertheless, banks are inherently flawed and while closing a bank account is ill-advised, you can exercise certain degrees of caution and pragmatism when dealing with banks.

First, whenever you deposit money into a bank, it is no longer truly yours. The deposited amount indeed shows up on any account, but in reality, banks loan out your deposited funds. These funds are why accounts that incur negative balances can still function in some capacity.

Nestmann further states that if everyone who deposited money into a bank demanded to withdraw all their money simultaneously, the bank might be unable to cover it. This serves as credence to the reality that your money stops being yours once deposited in banks.

Despite this, keeping a minimal sum of money in your bank account is still a good judgment call. Here's why:

There are still businesses that do not accept cash payments. Therefore, a credit or debit card will be necessary to receive certain goods and services. Transportation via Lyft/Uber, travel accommodations such as Airbnb, and the purchase of plane tickets all require payment through your credit or debit card.

When you need a quick personal loan, you will also need a bank account to receive the money. You will also make your repayments in the same manner. Hence, a bank account is a financially sound call to help you blend into the fin-tech world.

Other Places to Store Capital

While many people are aware of the problematic factors of banks, they remain unaware of other places to store their earnings. While some individuals opt to keep large amounts of cash in safe boxes or other hidden locations, Investopedia confirms the variety of options for those who wish to store their capital outside of banks.

Government bonds, precious metals, digital wallets, and other collectible assets are great avenues for those who wish to store their money outside traditional banks. Unfortunately, none of these are risk-free. However, knowing the correct procedure can help you minimize the risks peculiar to the alternative of your choice.

Many people have so far argued that keeping lump sums of your money in different ways is much preferable to keeping your entire income in one location.

Final Thoughts

Banks should be viewed and treated as necessary evils. While some people may view banks as virtually secure, there are other alternatives. Ultimately, the decision on where to keep money is a matter of preference. However, most people usually tend to hold and protect their earnings in multiple ways.

Authored by Gabrielle Seunagal