The answer to the question seems very surface to me. Indeed, it answered the question of whether or not the FDIC covers full amount or percentage, but isn’t that an illusion? If the banks fail and the government replaces depositors money where will that money come from? Out of thin air like the last bailout? In other words, we really will be getting a pecentage of the money because the government will just print more money to pay us off. It’s a legitimate question about whether to take money out. I think all of us who are informed are concerned about the same thing. The sad truth is that you may be more likely to have your money “stolen” if it is still in the bank. It’s a valid question that I think deserved a more in depth answer. Perhaps there is no answer. It boils down to whether you want to have the control “in your own hands”.

Agreed but even if you have the money under the mattress it will still be devalued as they print more and more money for these bailouts.

I think we can only sit back and watch what happens as we are going through a historical period of upheaval which is going to change capitalism as we know it.

When the dust settles we will all see what we are REALLY actually worth.
Times are changing fast and I believe our values will have to change along with it.

Perhaps this saying will ring true “the wealthiest person is not he who has the most, but he who needs the least”.

The economy is in a state of change. Unfortunately what the Fed is doing is partially the types of actions that got us in this mess in the first place. THe easy money policy allowed uncreditworthy individuals and corporations borrow money they should not have been able to. At least not at such low rates given the high risk of these borrowers. A better policy than just throwing money at the problem would be to stimulate the economy by creating jobs. This could be done by rebuilding infrastructure and developing green technologies such as bullet trains, wind turbines and the like.

Ending the Iraq war and the huge drain on the economy that that creates will free up some much needed cash to give the economy the stimulus it needs. War costs money and does not lead to prosperity.

Or your mattress could burn.

Eventually money won’t be worth anything as it will all go to plastic and credits will be issued in place of money and then the goverment will be really able to track everything.

Best thing right now would be to purchase things you might need in the future that you know will go up in price with the inflation that is sure to transpire.

I’m thinking you might be able to get a very sweet deal on a new Silverado with 4 wheel drive,a Duramax and Alison transmission right now.

Or how about a shiny black Steinway baby grand?

I’m thinking of CDs or digging a hole in my backyard and putting it there.

I’ve read on some of the financial pages that the Federal Government would not be able to pay out all the money that is currently covered by FDIC. Better ask your bank about it.

The reason why we are in this position is that the desire to have more makes things cost more. I have watched the markets for a long time and lately I have seen a huge jump in price in the real-estate section. I understand the desire for profit, but there is a point where the want for profit undermines the ability for economic buoyancy. The point is that this collapse is the fault of everyone.

1) The government for thinking that the greater the property is worth the more taxes they can raise from it.
2) The banks that believe that with the higher mortgages means there will be more money coming in for longer periods of time.
3) The buyers who believe that the system will support their economic in devours by giving them raises so that that can pay for these homes.
4) The sellers who are willing to up the price to what they believe is a “fair market value” ( this includes private and real estate agencies)
Economic health is not with the idea of getting more, but the idea of being able to keep what you have. After all if you are indebt all that you have is not yours, for you are at the mercy of those you owe to. The Bible states; “not to owe anything but love” I believe that this is good advice.

2 points:

1) You could be in trouble if the banks decide to have a “holiday” like they did in 1933, and you are unable to pull your money out when you need it.

2) It doesn’t matter if the FDIC insures up to $250,000 if we enter a hyperinflationary environment. Your money will be useless anyway!

Some say that everything that has been happening is a test balloon to start a one-world government. How true is still anyone’s guess.

Just try to remove more than $10,000 from a savings account at a FDIC insured bank. First of all, they will call you names for doing it; second, you have to fill out numerous forms that are sent to the Feds. Anyone removing that amount in cash is either a terrorist, or a person starting a run on the bank. Remember – it’s not your money, it belongs to the Federal Government. They are just making sure they have got thier share.
I just tried to take out $10k, and those are the results I got.

Or cockroaches get your money.., or your kid might steal it. Face it.. taking it out is worse than leaving in the bank.

The two big questions are
1) How much money do you have?
2) When will you need to access it?

If you have under $250k, or $500k in a joint, and you will be accessing it in normal increments (as opposed to making massive withdrawals), than you’ll want to keep your money somewhere that it can work for you.

Inflation peaked in July at %5.6. Sure, it’s high, higher than most banks or credit unions are offering for savings or CDs. However, we are far from hyperinflation (experiencing over 100%). If you are worried about devaluation of the dollar, try to keep some of your money in foreign currency, like pounds or euros, until your hyperinflation fears subside.

Another great buy right now is stock, if you are looking to hold on to them for at least a year. It is doubtful that it will take more than a couple years for the market to work its way back to 13,000.

Many people are being forced into this scenario anyways by something called ChexSystems. If you have a disagreement with a bank such as J.P. Morgan Chase, they will file negative information with this agency. After this is done you can’t get an account anywhere for five years. You can appeal, but guess who runsChexSystems: The big banks. As they become more powerful the individual becomes more and more vulnerable as they wield this power.

its the final collapse of the moneysystem like 9/11 was theb total collapse of the trade worldwide.Evil spirits do it with purpose to get the worldpower under control; its all plaanned in the usa, and already hundreds of years going on, but now we are in final; stadium. watch out it becomes very dangerous.

@dingobully: Many smaller financial institutions don’t rely on outside information providers (that includes credit scores!). For example, many credit unions will independently analyze your current financial situation before making loan / account decisions. The current crisis has made many FIs suspicious of “big bank” practices, so it is conceivable that things like credit scores or ChexSystems may have less of a strangle hold on our financial futures.

The real answer is if everyone puts their money under the matress, then the financial crisis deepens; as credit dries up. Without available assests to lend, businesses won’t get loans. Business then stops. Jobs then go away. So, while it might be a surface response, the real answer is we are in this together and keeping money in the bank is US working together.

hmmm…
if you are in china get your rice bags,noodles under mattress.

if you are in USA keep your venture capital under mattress.

if you are in europe keep your cheese and wine under matterres.

if you are in emirates keep that oil under mattress.

if you are in dubai keep those gold biscuits under mattress.

if you are India keep that teabags and those softwares under mattress.

if you are in Taipe keep those electronic stuff under mattress.

if you are in japan keep those robots under mattress.

share your stuff under mattress with others only if the other does the same.

Make sure that your maid knows that , mattress is not be disturbed while house keeping.

This way you really need not worry about keeping money under your mattress.

Well, I guess I can count my blessings. I’ve been out of work for six months but at least I don’t have to worry about how to keep my money safe, I don’t have anymore.

Tell us about what the nominal interest rates are like on average, what effects inflation has on our real interest rates, the likelihood of us actually getting our money out (even when insured in FDIC backed institutions), and so on.

It seems these Bible verses are becoming very appropriate for the near future:

King James Bible:

Ezekiel 7:19:

They shall cast their silver into the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is a stumblingblock of their iniquity.

Revelations 18:

Rev 18:2 And he cried mightily with a strong voice, saying, Babylon the great is fallen, is fallen, and is become the habitation of devils, and the hold of every foul spirit, and a cage of every unclean and hateful bird.

Rev 18:9 And the kings of the earth, who have committed fornication and lived deliciously with her, shall bewail her, and lament for her, when they shall see the smoke of her burning,

Rev 18:10 Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come.

Rev 18:11 And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more:

Rev 18:12 The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble,

Rev 18:13 And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men.

Rev 18:14 And the fruits that thy soul lusted after are departed from thee, and all things which were dainty and goodly are departed from thee, and thou shalt find them no more at all.

Rev 18:15 The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing,

Rev 18:16 And saying, Alas, alas that great city, that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls!

Rev 18:17 For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off

Wrap it around your head that for the past several thousand years, there have always been people like you, who fantasize that we are living in the “end times”. Including the original John.

Wrap it around your head that for the past tens of millenia, there have always been people who think they are in the “end times”. Including the original John.

Well “Ni” we are bound to be correct eventually, right?

I’m not pushing the Bible’s view on anybody, I’m simply mentioning verses that seem very appropriate to me at this time, especially Ezekiel. Money so worthless, people simply cast it into the streets. At the rate the gov’ment is counterfeiting it, it won’t be long now.

I too, am disappointed in the lack of depth of this answer.

I’m impressed and relieved to finally see a few other people thinking the way that I have been for the last few months. It’s not a popular standpoint. I may be relatively young, but I am not an idiot.

One thing is for sure: Babylon will receive its judgement.

Let me ask you where is your mattress? How much money do you have there? When do you leave home, which days are you away?

I too have been stashing cash. The banks don’t get to use it. Business can’t borrow it.
The bankruptcy court, nor those thieving lawyers can’t get to it. I get to eat and pay my bills in spite of the economic conditions and there I will never suffer a “bank holiday” no matter who decides to declare one.
My business is legal and is all cash, all the time. You wanna screw with credit cards, credit limits, bill collectors and the FED you go right ahead and deposit every dime. Not me.

This is by far the worst, most poorly researched, poorly thought out answer I have ever seen on About.com. First off, the FDIC insures up to 100,000 per bank per individual unless there are other parties of interest in the account, such as a retirement account. But secondly and most importantly, Cfless was right on the money, so to speak when he said that the FDIC in a true economic collapse will not be able to pay off everyone’s deposit insurance without printing money. This, like the bailout could result in hyperinflation, making your dollar good for much less than it is today. If you want safety, buy concrete items that have real value that will resist devaluation in a depression economy. Gold, Silver, Real Estate. If your going to trust the banks, never let your investment in any one bank exceed the $100,000 cap.

It’s a scary thing when a medical student can give a better answer than an expert in the US Economy, which raises the terrifying question of how much the people running our economy actually understand about it. I hope that this answer was more useful than the so called expert’s.

Hi Walt (and everyone else),
Actually, the FDIC raised the limit on insured deposits to $250,000 until the end of 2009. I have written an article that addresses the concerns of hyperinflation and the ability of the FDIC to cover withdrawals if there were a run.

Please see Are Your Bank Accounts Really Safe?

Kimberly

Whoa whoa whoa. Let’s all calm down. It is not the end of days. This is not a monumental meltdown. These are just some hard times. The circumstances are unique, but not special.

We are not going to see hyperinflation. Most people educated on the subject fear deflation. Thus, I’m going to side with Kimberly here (although you may want to elaborate a little bit more next time).

If there is a run on the bank, it will be caused by fear mongering rhetoric (see Waltd) rather than calculation. The reality is that there will not be a run on the banks, the major wave of failures is over, and now our primary responsibility as a country is weathering the down times until the real estate market rebounds and frees up more capital.

This is not, I repeat NOT, the end of the world as we know it.

Well I believe it is an individual decision to compare the possibility of risk in both situations. That is , the level of risk when it is UNDER THE MATRESS and at BANK respecively. This calls for economic analysis but for those who can’t, the best alternative is to give the risk to the Banks.

Those who believed as I did throughout my life, that banks were a safe haven for their money and the managers, CEO’s and boards of directors were scruplously honest men and women are in for a shock. The story is something nobody could just make up.

I changed my mind over time when I became interested in the internal workings of banks, from main street USA to the Goliath’s i.e. CITI, Bank of America, Chase etc.

I used to believe that in order to loose money in the bank, it would take the collapse of the Federal Government before depositors and investors would be affected, yet we are now and have been for years been like sheep going with the flow as bankers realized the power of the computer was not gains in efficiency and better service to customers. Instead, an emergence of a whole new way of banking was born. The only way the customer was affected was the power, speed and ability banks gained and used to wring more money out of each of us. Where we once may have been valued customers, depositors are now viewed according to how much can be extracted from us, all entirely legal just kept very quiet.

I am not a banker, financial analyst or economist. My career was in newspaper publishing however I became interested in banking several years ago. An accidental discovery led to a greater curiosity that produced another discovery and so on regarding the very real and very many ways banks have changed their internal policies and focus away from lending a credit worthy person some money, charging a fair interest and receiving a good return. Not so anymore.

This is not the forum to tell all that I learned much of which came to me through books, articles and interviews conducted by people far smarter than me. (Perhaps a blog is in my future)however once told openly, most reasonable folks likely will understand and take whatever action to protect themselves from the sheer greed that has overtaken a once honorable industry.

Equally important are the many ways depositors are being legally milked daily by their bank by those of my own generation and the profound changes they made in their industry, change built on deception and unbridled greed.

I’ll post those findings in a way anyone can understand on a blog and announce where you can find it in detail and it won’t cost you a penny. This information needs to be set free for all to make their personal judgments.

After 30 years in the newspaper business, I know the laws of slander and liable. In matters of this nature, truth is a shield.

What I have learned, is practiced by most every bank so the only ones who will be shocked and disgusted will be those of us who have conducted our lives with the belief that banks were synonymous with “truth” as in the sayings, “And you can bank on that.” Or, “You can take that to the bank.” What I learned, could not have been made up. Its’ that “far out.”

And you can “Take that to the mattress.”

This is ridiculous advice. The FDIC absorbed 28 failed banks in the United States in 2008. Who do you think funded those FAILouts?

Because FDIC contributions are a percentage of INSURED deposits (and therefore on balance sheets transactions), this means a bank does not actually contribute an “insurance fee” based upon its actual transactions.

For banks with large derivative and foreign transactions, the taxpayer can absorb up to 96% of the amount of failure (thanks to the Treasury covering whatever the FDIC cannot afford).

This is horrible advice.

Research for yourself.

As sad as this whole thing has become…it has been a long time in the making. This is a great video on the creation of cash as it originated and is now…
http://www.youtube.com/watch?v=PHBtnzxJJ_4

What it doesn’t spell out though is the fact that the Federal Reserve is NOT A BRANCH OF THE FEDERAL GOVERNMENT- but rather owned and operated by private world banks that print the money to sell at interest to us (USA). This was “privatized” by President Woodrow Wilson before he finished his term.
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world — no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” -President Wilson on the federal reserve