Your Mattress is Not FDIC Insured – Four Reasons to Keep Your Money in the Bank

Your Mattress is Not FDIC Insured – Four Reasons to Keep Your Money in the Bank

On the heels of the election, many people are worried about the economy, their investments, and their money. I think we are, in fact, in a good place and on track for great growth in the United States and Canada. Europe may have a tougher time. Some people have been so scared that they took their money out of the bank. Let’s just be clear, you should never do that.

Keep Your Money in the Bank

Your bank account is at the center of your personal finances. Your money goes in and out of your checking account, and your savings account is a safe place for longer term savings. Your bank may be the home of your credit card, mortgage, car loan, investments, and other personal finance services.

Despite what is going on in the economy, keep your money in the bank. It is safer there than anywhere else. Even a tin can in the backyard or under the mattress.

Your Bank is FDIC Insured

The biggest safety net you have with your checking and savings comes from the FDIC, or Federal Deposit Insurance Corporation. The FDIC insures all normal bank accounts in the United States up to $250,000 with few exceptions.

That means if your bank goes broke, as mine did once, or something bad happens to the institution, you still get your money back. When New Frontier Bank went under, I got my check in the mail less than six weeks later.

Your Bank is Secure

If your house burns down or you are robbed, the cash you have at home might be gone very quickly. If you lose cash, there is nothing you can do to get it back. It is just gone and you have to move on.

If you have money in the bank, it is not only FDIC insured; it is secured by the institution. Banks have powerful computer systems that track and manage billions of transactions every year. One source estimates that 300 million bank transactions take place per day, and each of those is backed up somewhere safe.

If your bank burns down or is robbed, your cash is not there to disappear. You still get it back.

Your Bank is Regulated

Most of us don’t trust banks very much, and a lot of us don’t trust banks for very good reasons. Banks are paying hundreds of millions of dollars back to customers that were screwed by overdraft practices.

Despite their reputation for treating customers poorly, the government does a lot to protect you. The Federal Reserve has a long list of regulations to make sure you and your money are safe from profiteering bankers.


Money at home is always loving value as inflation slowly devalues your currency. At the bank, you don’t usually make a lot, but you can earn interest. I have cash in high interest savings accounts. I suggest Capital One 360 or Ally Bank for online savings accounts.

Be Smart with Your Money

At the end of the day, be smart when you manage your money. I assume you are a smart person if you are reading this. Don’t be stupid and keep a ton of cash at home. I know of some people that keep some cash at home in a safe bolted down, but I don’t have any friends that leave cash under the mattress.

What is your cash strategy? Do you prefer to keep money at home or in the bank? Let us know in the comments.

Image by Binder of Daemons / flickr

4 thoughts on “Your Mattress is Not FDIC Insured – Four Reasons to Keep Your Money in the Bank”

  1. I keep my money in banks unless I have a chance to invest in something. But to be honest the rest of it isn’t earning me much interest setting in the savings account. Better off in a low paying cd I think. Something is better then nothing and if someone breaks into your home or it burns down you don’t want to lose your savings.

  2. My grandpa got robbed once and lost a lot of cash. Insurance covered something like $300-500 but wouldn’t cover any more than that. I think he had a couple thousand at home at the time. Has learned his lesson.

    1. Ouch. I have seen arguments for having up to $1000 in cash at home, in a locked, bolted down, fireproof safe. I have never kept more than $100 at home though.

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