Why Banks Accounts are Still Good Places to Keep Cash
Post recession a majority of Americans not just lost faith in the economy but also in the banking industry. Some huge, ‘indestructible’ banking and financial groups like Citi Group started tanking during the economic crisis. This led to fear among those who had accounts with many major banks. In fact, there were many who pulled out their savings from their local banks, preferring to keep at home even if it meant loss of interest.
Although the economy is not exactly booming even now, it is certainly more stable and the banking sector has managed to find its feet once again. If you are one of those people who keeps all your money at home, then here are a few good reasons why you should reconsider your decision to avoid banks.
Extended protection to bank account holders
As part of its economic improvement program, the U.S government is allowing an extended protection to bank account holders to cover losses in case of bank failure. The standard $100,000 FDIC (Federal Deposit Insurance Corporation) insurance on accounts now stands increased to $250,000. This limit will be in force until the year 2014 when the $100,000 insurance limit will come back into force.
Even beyond 2014, some retirement accounts may still be covered by the enhanced limits. Given this assurance by the U.S government to cover your losses up to this limit, there is no reason why you shouldn’t make the best of the situation by parking your cash in a FDIC insured bank.
Convenience of online banking
The growing popularity of safe online banking has prompted most service providers, businesses and small stores to offer transactions through the internet. Today, you can pay all your monthly bills, shop for expensive consumer goods, buy insurance and carry out a number of different financial transactions without leaving the comfort of your home. All you need is an account in an internet friendly bank and you can even buy groceries right from home using your computer and pay for it directly from your account.
A bank account also saves you the hassle of keeping track of regular, recurring payments month after month. Most of your utilities payments can be set up so that they are debited directly into your account. Authorizing direct debit in this way ensures that there is never any chance that you miss out paying critical bills, resulting in the termination of the service.
By exercising some caution in researching the bank’s reputation and by understanding the level of government backing it has you can keep your money perfectly safe in your account. In addition, you can also earn a nominal interest rate on your deposit.