Banks are considered to be the safest place to store money. The saying “safe as a bank” is not in vain, but how much does it correspond to the truth in today’s economic situation and technological age? Is our money in banks really more secure than ourselves? By depositing money with the bank, we trust it completely to someone else, so our ability to protect it is reduced. People just have to trust that banks will do their best to ensure that no one else is present for their money and hope that the banks will not crash. However, there are a few things to consider to protect your money deposited with the bank.
Many believe that banks are insecure because they can crash and then all the money stored in the bank is lost. It is not quite true. Valts guarantees a refund of € 100,000 if the bank closes. So if you don’t keep more than 100,000 euros in one bank, you will be able to recover your money. However, if your total savings exceed this amount, be sure not to keep all your money in one bank. Choose at least two unrelated banks to deposit your money. Then you can be sure that you will not lose your money even if one of the banks goes bankrupt.
Although you will not lose amounts of up to € 100,000 even if you have a bank, you should keep in mind that your funds can still be temporarily frozen. That means you can’t even have a month for your money. It would be wise to get independent income also in two different banks in order to stay away from income for such a long time. If you only have one income stream, you can hold a normal bank account and a second savings account with one bank. If you have multiple revenue streams, you should receive each in your bank account. Similarly, if you have multiple income streams in your family, it would be good if one of the earners had an account with one bank and another with another.
I must say that not all banks are the same. As already mentioned, the Latvian state guarantees the repayment of 100,000 euros if the bank closes, but some other banks apply repayment guarantees similar to those in their countries. There is not much of such a bank. Most of the banks operating in Latvia are subject to Latvian Deposit Guarantee Law, but if you want to deposit really big amounts, it is worth looking for more profitable solutions.
As was mentioned at the outset, if you entrust your money to a bank, you can’t do it all the same. Even if you have accounts with multiple banks, your access to money can be limited in different situations. To protect yourself completely, a little money should be kept at home. It doesn’t have to be a big sum. It would be enough to save one monthly salary for unforeseen events. However, if you want to secure and hold larger amounts at home, you should buy a safe deposit box for it.
Your money is threatened not only by bank crashes, but also by the crash of currencies. True, it threatens your money not only when you store it in a bank, but also when you make savings in cash. As we know from the past, the value of savings may fall due to exchange rate fluctuations. To avoid this, keep the money in at least two unrelated currencies. An even better solution would be to keep deposits in gold or other precious metals, as their value has remained stable for thousands of years, unlike the various currencies affected by many external factors.
Nowadays, it is not a crash of currencies or banks that is much more of a concern, but an opportunity to access electronic money. As you know, there are people who can enter any computer system, including internet banks. Since nowadays all banks offer internet banking services and banking and accounts are largely computerized, money can be accessed by breaking the banking system. It is not easy, but also impossible. If someone accesses your money because of the bank’s negligence, you will not lose money, but if this happens because of your own negligence, you will not be able to do anything for the sake of it, so keep a close eye on the security of your electronic money without disclosing your internet banking data and other security measures.
Overall, the money in banks today is still safe. There are different individual cases when you really need to be secured, but unless you keep a very large amount of money in the bank, you don’t have to worry about losing money. Banks are institutions that guarantee money security, so they will take responsibility for your money.