Savings Accounts – Having Multiple Deposit Accounts

Dispersing your savings across many banks will help protect you if one of the banks you have a savings account with fails.

The Federal Deposit Insurance Corporation (FDIC) insures all deposit accounts like savings accounts, checking accounts and certificate of deposit accounts up to $250,000. Having multiple accounts with different banks will protect you from losing any of your deposits.

When I was a new member of the group I was really amused by this idea. I asked one day “why?” My friends asked me what I meant by why. I asked them why it is better to have a savings account in more than one bank. They stared at me incredulously and answered my question.

They told me that it is better to have more savings accounts because you cannot put your trust on one bank. Anything can happen. In present economy you never know when any bank will be out of business. They can file for bankruptcy.

So, it is better not to keep all your eggs in one basket. I listened to them and understood their point of view, but I asked them if they were so worried about banks being closed then what is the need of keeping our money in banks and risking it, we can keep it in our homes.

They said if they will keep it in home, they will spend it. So, if they really wanted to save it, they should keep it away from them in banks. I said, “I got it”, but in reality I didn’t.