In prehistoric time money was in the form of cattle and food grains as the barter system was the only means of exchange available at that time. People have to keep cattle and grains in their houses for keeping them safe from the burglars and natural calamities. Later coins made of gold, silver etc. replaced barter system, and in modern time we have currency notes and digital currencies which have become the widely accepted means of exchange.
Before the banking system came into existence, people used to hide their money in the secret places like burying it somewhere or store in secret closets, chests, strongboxes, safes, vaults or between the secret openings on the walls or floors, etc. Powerful people, especially kings and ministers, used to keep guards to protect their treasures. Money kept in those methods was not safe from the burglars, bandits and enemies. Occasionally people used to forget about the places where they had buried their treasure or died before they could tell anything to their heirs about their secret possessions. But, banking system made it easy for everyone to keep their money in a safe place. People even receive interests on their savings with banks. Hence, banking system is the safest place for saving money so far.
However, nothing is permanent in this world. Banks are vulnerable to fraud, robbery, insolvency, etc. In the digital era hackers can steal money from banks without going to the banks. They can hack any bank or bank account located in any part of the world by simply running hacking tools, which are special programs, on their computer or typing passwords related to the compromised accounts.
To overcome such problems and making banking system safe and free of centralization, some persons invented cryptocurrencies. However, cryptocurrencies are also not very safe from hackers. Hackers can steal anybody’s crypto assets by hacking their online wallets or knowing the password of their wallets.
So, there is no safe place for the storing of money which is hundred percent foolproof. Despite of all such possibilities and vulnerabilities banks are still one of the safest place to keep money. However, virtual currencies can be the safest currencies in near future.
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After the financial crisis of 2008, it is quite clear that large banks are safe to save you money. Because they are so big, that governments will bail them out. If a large bank fails, that will imply mismanagement on the part of the government and no political party wants to be out of power. Also, these guys get paid as well and their money (some of it) also sits, guess where - banks!
Anyway, banks aren't the best place for 'saving' money. They are the safest and most convenient way of storing money. The place where you store your money has to offer the following characteristics - regulated by govt., should not be volatile and should have some insurance, also should help you beat inflation. To save money, the safest place will be govt. bonds. No matter what you hear about US govt being bankrupt, there is so much money backing US govt debt, that it will be the safest way to beat inflation in the near term. However, even better will be inflation linked govt bonds. they will give you inflation as a return and you will never lose money. Govt bonds can also be volatile and expose you to market risk, albeit the lowest possible market risk.
Back to storing money for a bit. banks do not offer any interest as of now. In most countries some money is insured by a govt. regulatory body. if you have a large pool of savings, then I will say that you open multiple bank accounts at large that will need to be saved in case of a crisis and park that an amount just under the insured limit in most accounts. banks are regulated, so even if they take risk on their books, its still less risky as they will go through audits, investors overviews etc. and most banks want to ensure longevity. You can't store money in gold, difficult to store and keep safe and is also volatile as value can go up and down. Crypto at the moment may be a good investment but it is not a great place to store of save money given the immense volatility.
Banks are still your best bet. cash also comes with storage problems and loses value on account of inflation.
The folks in Greece would probably say NO...
Yes! Banks are the safest place to save money. Why I have come up with this contribution is that when we keep our money at home it is unsafe as we can easily be robbed or we ourselves might decide to spend the money lavishly.
But if we save our money in the bank, we think twice before going to the bank to withdraw it or going to the ATM to do so.
Before we save money in a bank, we have to consider if the particular bank we are banking with have what it takes to save with them. Reason is most are likely to go bankrupt as a result of lack of financial potential.
In my country, a list of Banks that have been approved to have the banking licence are always published. So before a bank makes this list, such a bank has to have a certain amount of money so as to ensure that investors are on the safe side.
Another thing is that there is a big difference between a microfinance bank and a standard bank. So I prefer saving my money in a standard bank than a microfinance bank as a microfinance bank is capable of going bankrupt at anytime.
To me, bank is still the safest place one can save money.
That is the most unsafe place to save money. First of all it is a central hub of keeping the money of millions. That means even if individual keep pennies with the bank, in the central hub its value will be millions. So it will be an attraction for hacker and robbers to rob money and it is not theoretical what I am talking about. It has happened numerous times in past.
Bank is not a subject of robbery only. Bank in its structure is vulnerable too most of the time. If the non performing assets grow over time and reach a point where a bank can not survive and at that point if the policy maker and the authorities do not rescue and stimulate the system then eventually it will end in a loss and the bank will go bankrupt. The people keeping money in the bank will stand to loose money.
Bank is not boarder-less and in the event of a war you can fly to other country where as you can not access the money kept in your bank out of your country in such a case. But if you have crypto then just by having the secret key you can unlock and sell your crypto in any country.
Bank is centralized and a centralized system is always a subject of single point failure. If you are keeping the money in bank that means you are sharing your trust with a third party and as long as the third party is not corrupt, your fund is also safe. But the moment the third party gets corrupt or hacked then you are loosing your money. So the risk level is quite high by keeping the fund in a bank. There is no such concept like absolute ownership by keeping money in bank. A cryptocurrency on the top of blockchain technology gives you the true and absolute authority.
Thank you and Have a great day.
The bank is far from safe.
When you put money into a traditional bank, it is then being loaned out to others. The banks operate in a fractional reserve manner, they do not keep everyone's funds in a vault. If everyone went to go and take their funds back at the same time, it would not be possible.
It's best to keep your private keys and wealth secure in other ways.
For now, the bank is the safest place to save money until there is an alternative.
Nope it's not, there is one organization in every country who got the power to take your money in a blink of a eye, that is the tax authorities. Then you can pray to Jesus or who ever you want, but nothing will stop them to take your money if they want.
Second, every bank is in debt, that means one stupid mistake and the value of your money is split in half or even gone. Check here on this link, how the banks in Iceland created and fixed the crisis in 2008.
There for the best way to save money is to buy gold and put that in a safe or buy land in a upcoming third world country, that can even be a good investment!
If cryptocurrency stays around like what I think it will then I would say holding your money in your own personal wallet like a nano Ledger s would be the best way to go. I think that would be the safest way. If you store your money in a bank and the government decides to put a lien on something you have no way of stopping them and you will lose everything that you have in the bank. However if you have it stored on your own personal wallet with a password there is no way anybody can access your money.
For practical purposes, yes. But during a severe financial and banking crisis, it is not. Cypriots discovered that in a hard way when their accounts went through a 10% haircut and there were severe restrictions as to how much you were allowed to draw from your account per day.