Take money out of the bank?

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BradJ
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Take money out of the bank?

Post by BradJ » Sun Mar 15, 2020 8:16 pm

I have quite a large emergency fund (50k total) in two separate banks. While I am not THAT concerned about Coronavirus, it seems like every day more and more drastic steps are being taken. Has anyone considered taking their money out of the bank?

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Sandtrap
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Re: Take money out of the bank?

Post by Sandtrap » Sun Mar 15, 2020 8:20 pm

Why?

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vipertom1970
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Re: Take money out of the bank?

Post by vipertom1970 » Sun Mar 15, 2020 8:22 pm

why why why ? :oops:

awval999
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Re: Take money out of the bank?

Post by awval999 » Sun Mar 15, 2020 8:22 pm

Yes. $1000 in cash at home is reasonable in these uncertain times.

dru808
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Re: Take money out of the bank?

Post by dru808 » Sun Mar 15, 2020 8:22 pm

Like, go to bank, withdraw 50k, go home with 50k in backpack? Nope
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texan100%
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Re: Take money out of the bank?

Post by texan100% » Sun Mar 15, 2020 8:27 pm

What about a possibility to freeze all saving account by government?

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nps
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Re: Take money out of the bank?

Post by nps » Sun Mar 15, 2020 8:28 pm

BradJ wrote:
Sun Mar 15, 2020 8:16 pm
While I am not THAT concerned about Coronavirus, it seems like every day more and more drastic steps are being taken.
You must be pretty concerned if you are doubting FDIC insurance.

perikleez
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Re: Take money out of the bank?

Post by perikleez » Sun Mar 15, 2020 8:29 pm

I would not do that with that amount, especially if in money market accounts

buy some short term treasuries ASAP for a a coupe of months and see how this plays out.

your risk include (a) FDIC coverage, and potential for full recovery; and (b) access to your funds if there is a bank run, i.e., bank can't meet it's daily demand

we are not at that crisis point yet, but you would incur greater risk as each day passes

there will be a bank/hedge fund/financial institution collapse. it may start in another country like Deutsche Bank or HSBC, but it will have a domino affect and fastest thing to do for a bank is just to closed the door and services until things settle down. you don't want to be caught in that.


here's a history lesson:

https://www.investopedia.com/terms/s/sl-crisis.asp

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Re: Take money out of the bank?

Post by dru808 » Sun Mar 15, 2020 8:32 pm

texan100% wrote:
Sun Mar 15, 2020 8:27 pm
What about a possibility to freeze all saving account by government?
If you’re that concerned move it to checking :P
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dru808
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Re: Take money out of the bank?

Post by dru808 » Sun Mar 15, 2020 8:33 pm

Yes, get your money out of a bank and into a credit union.
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BradJ
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Re: Take money out of the bank?

Post by BradJ » Sun Mar 15, 2020 8:36 pm

dru808 wrote:
Sun Mar 15, 2020 8:33 pm
Yes, get your money out of a bank and into a credit union.
Half of it is, at this moment.

adamthesmythe
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Re: Take money out of the bank?

Post by adamthesmythe » Sun Mar 15, 2020 8:39 pm

texan100% wrote:
Sun Mar 15, 2020 8:27 pm
What about a possibility to freeze all saving account by government?
Since the current objective is to stimulate the economy and get people to spend wouldn't this be rather counterproductive?

dru808
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Re: Take money out of the bank?

Post by dru808 » Sun Mar 15, 2020 8:40 pm

BradJ wrote:
Sun Mar 15, 2020 8:36 pm
dru808 wrote:
Sun Mar 15, 2020 8:33 pm
Yes, get your money out of a bank and into a credit union.
Half of it is, at this moment.
I was kidding, it was in response to fdic insurance. Nothing wrong with keeping a couple thousand or whatever you feel safe having under a mattress or safe. I wouldn’t feel comfortable with 50k for an extended period at home. Maybe get a safety deposit box, leave money in there and keep minimum in the savings accounts?
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Re: Take money out of the bank?

Post by willthrill81 » Sun Mar 15, 2020 8:41 pm

dru808 wrote:
Sun Mar 15, 2020 8:22 pm
Like, go to bank, withdraw 50k, go home with 50k in backpack? Nope
You run the very real risk of civil asset forfeiture if stopped by law enforcement by doing that. No way.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

dru808
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Re: Take money out of the bank?

Post by dru808 » Sun Mar 15, 2020 8:43 pm

willthrill81 wrote:
Sun Mar 15, 2020 8:41 pm
dru808 wrote:
Sun Mar 15, 2020 8:22 pm
Like, go to bank, withdraw 50k, go home with 50k in backpack? Nope
You run the very real risk of civil asset forfeiture if stopped by law enforcement by doing that. No way.
Yup, can you imagine your money being stripped and given to the county? Have you heard of them doing this in some midwestern state with debit cards? Scary
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dukeblue219
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Re: Take money out of the bank?

Post by dukeblue219 » Sun Mar 15, 2020 8:47 pm

Like those who would walk to the top of the nearest hill in the event of a Soviet nuclear strike, some things aren't worth planning to survive unless you can go all-in.

If FDIC insurance fails we're in a whole new ballgame. Your $50k in cash will get you killed by a roving gang or let you buy enough food to starve last.

Seriously, though, I don't even know what would cause banks to be locked, much less why it would be a better solution than massive printing of money by the Fed and massive deficit spending by Congress.

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Re: Take money out of the bank?

Post by dru808 » Sun Mar 15, 2020 8:49 pm

dukeblue219 wrote:
Sun Mar 15, 2020 8:47 pm
Like those who would walk to the top of the nearest hill in the event of a Soviet nuclear strike, some things aren't worth planning to survive unless you can go all-in.

If FDIC insurance fails we're in a whole new ballgame. Your $50k in cash will get you killed by a roving gang or let you buy enough food to starve last.

Seriously, though, I don't even know what would cause banks to be locked, much less why it would be a better solution than massive printing of money by the Fed and massive deficit spending by Congress.

Agreed :sharebeer
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willthrill81
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Re: Take money out of the bank?

Post by willthrill81 » Sun Mar 15, 2020 8:56 pm

dukeblue219 wrote:
Sun Mar 15, 2020 8:47 pm
Seriously, though, I don't even know what would cause banks to be locked, much less why it would be a better solution than massive printing of money by the Fed and massive deficit spending by Congress.
Under normal circumstances, a national bank cannot be closed except on legal holidays, though banks are free to set their own hours. If the comptroller of the currency issues an emergency proclamation, though, banks can be closed on other days. That may happen.

But in reality, most banking is done electronically these days. I've personally though for a long time though that having a fair amount of hard cash at one's home isn't a bad idea.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

northtexan
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Re: Take money out of the bank?

Post by northtexan » Sun Mar 15, 2020 8:57 pm

I think there could be a run on banks if there is a shortage of liquidity, just this weekend in New York a BOA branch ran out of $100 bills after multiple people took out 10 of thousands of dollars.

I am not concerned about loosing the money in an FDIC insured account, is there a concern with having cash in an investment account that is not FDIC insured? I have some cash in my investment account to make purchases in the future and have never thought of a system collapse or system strain, but should one be concerned with cash in an investment account with a self managed brokerage firm like ML or Fidelity?

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Re: Take money out of the bank?

Post by cadreamer2015 » Sun Mar 15, 2020 8:59 pm

I think it wouldn't be unwise to have several hundred or maybe $1,000 in cash at home. We have about $120 in cash at home and I don't feel very worried. Maybe I should have a couple of hundred more, but I don't see any circumstance where I'd want to have $50,000 in currency at home, or anywhere close to that.
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Turbo29
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Re: Take money out of the bank?

Post by Turbo29 » Sun Mar 15, 2020 9:04 pm

dru808 wrote:
Sun Mar 15, 2020 8:40 pm
BradJ wrote:
Sun Mar 15, 2020 8:36 pm
dru808 wrote:
Sun Mar 15, 2020 8:33 pm
Yes, get your money out of a bank and into a credit union.
Half of it is, at this moment.
I was kidding, it was in response to fdic insurance. Nothing wrong with keeping a couple thousand or whatever you feel safe having under a mattress or safe. I wouldn’t feel comfortable with 50k for an extended period at home. Maybe get a safety deposit box, leave money in there and keep minimum in the savings accounts?

Might not be a good idea. A thread from last year:
NYT Article: Safe Deposit Boxes Aren't Safe
viewtopic.php?t=286056
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perikleez
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Re: Take money out of the bank?

Post by perikleez » Sun Mar 15, 2020 9:22 pm

BradJ wrote:
Sun Mar 15, 2020 8:16 pm
I have quite a large emergency fund (50k total) in two separate banks. While I am not THAT concerned about Coronavirus, it seems like every day more and more drastic steps are being taken. Has anyone considered taking their money out of the bank?
go bold or go home.

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stop swimming in uncertainty, anxiety, and indecisiveness.

I wouldn't be in that situation to begin with, especially given banking overnight leading issues fed has been trying to fix last several months.

lostdog
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Re: Take money out of the bank?

Post by lostdog » Sun Mar 15, 2020 9:29 pm

Wow. Capitulation threads and now cashing out from the bank.

This really means a buying opportunity for sure.
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UpperNwGuy
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Re: Take money out of the bank?

Post by UpperNwGuy » Sun Mar 15, 2020 9:32 pm

Is this a survivalist thread? Why would you take your money out of the bank? What would you do with it? Buy gold coins and bury them in the back yard?

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fortfun
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Re: Take money out of the bank?

Post by fortfun » Sun Mar 15, 2020 9:36 pm

UpperNwGuy wrote:
Sun Mar 15, 2020 9:32 pm
Is this a survivalist thread? Why would you take your money out of the bank? What would you do with it? Buy gold coins and bury them in the back yard?
Bitcoin :confused :oops:

fwellimort
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Re: Take money out of the bank?

Post by fwellimort » Sun Mar 15, 2020 9:39 pm

Why take out money from the bank? People have FDIC. If banks go under, FDIC insures Treasury will print out the money for you.

We use a fiat currency. Treasury can inflate our currency to pay the 'protected' under $250k.
Plus, in recessions, it's not inflation that is an issue, but deflation hence your printed money for a temporary time period might just be worth more anyways.

If anything, we will see another huge bail out in this recession and stocks getting even more inflated in value due to the sheer amount of money that will be printed to the market. And wealth gap widen. You know.. like the result that came from 2008.

niven
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Re: Take money out of the bank?

Post by niven » Sun Mar 15, 2020 9:44 pm

UpperNwGuy wrote:
Sun Mar 15, 2020 9:32 pm
Is this a survivalist thread? Why would you take your money out of the bank? What would you do with it? Buy gold coins and bury them in the back yard?
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CarpeDiem22
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Re: Take money out of the bank?

Post by CarpeDiem22 » Sun Mar 15, 2020 9:58 pm

Well, here in India, withdrawals were barred by the central bank for one fairly large national-level bank earlier this month. This is unrelated to Corona but sent shockwaves through the country. Never say never.

https://www.livemint.com/industry/banki ... 62033.html

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Phineas J. Whoopee
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Re: Take money out of the bank?

Post by Phineas J. Whoopee » Sun Mar 15, 2020 10:21 pm

BradJ wrote:
Sun Mar 15, 2020 8:16 pm
I have quite a large emergency fund (50k total) in two separate banks. While I am not THAT concerned about Coronavirus, it seems like every day more and more drastic steps are being taken. Has anyone considered taking their money out of the bank?
Not me, no. The US controls its own currency. The problems come up when a country borrows in a currency it doesn't control, like in the Eurozone, or places like Argentina which have borrowed in US dollars but then saw exchange rates move such that they can't raise enough dollars to make contracted payments -- that's why they've been in US Federal court so often. Lenders know about it, and take the possibility into account. They deliberately assume calculated risks. So do the borrowers.

With respect to the government seizing savings account amounts below the insurance limit, it would make no sense. We control our own currency.

The FDIC has an insurance fund, which is paid into by member banks. If it has to take a bank over the bank still has assets. It just doesn't have enough to meet regulatory requirements and continue operations. The FDIC sells the assets. Only to the extent they aren't enough to cover insured deposits does the insurance fund come into play. It is not the case the FDIC has to have enough money to cover every insured deposit in the whole place. There's an implication Congress won't let the entire banking system fail. We've seen what happens when that occurs. Preventing such an event is why Congress created the Fed.

There's a lot of angst out there with vague memories of what happened in Cyprus several years ago. Deposits were insured up to 100,000 Euros. All insured deposits were paid. Only uninsured deposits were at risk, as they are here. Keep below insurance limits and it should be OK. Only should?!? Yes. It is impossible to escape all risk.

The other thing that happened there was imposition of capital controls -- limiting how much money could move in and out of the country, especially out. Such a decision would be counterproductive for the US. We benefit greatly from US dollars being the world's reserve currency. Capital controls, by us, would destroy the benefit. Not only that, they would break the world's economy, including ours.

So, no, I'm not taking money out of the bank to hold it elsewhere. Where?

PJW

grog
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Re: Take money out of the bank?

Post by grog » Sun Mar 15, 2020 10:55 pm

This is a good idea in the event of a severe hurricane or natural disaster. You might get a situation where all the ATMs and credit card readers are down and you need physical cash to buy things.

In general, it’s probably not a bad idea to have at least a few hundred dollars. But I see no reason to expect there to be problems with the power grid or anything like that with the current crisis.

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Re: Take money out of the bank?

Post by 7eight9 » Sun Mar 15, 2020 11:05 pm

If it makes you feel better to have $1K, $5K or $10K at home then go get it. It isn't like you are going to be losing any significant interest most likely. If, and this is a big if, there is a banking holiday like there was in the 1930s then you will have plenty of money on hand. If not, you will have missed out on a small amount of interest.
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Mordoch
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Re: Take money out of the bank?

Post by Mordoch » Sun Mar 15, 2020 11:09 pm

7eight9 wrote:
Sun Mar 15, 2020 11:05 pm
If it makes you feel better to have $1K, $5K or $10K at home then go get it. It isn't like you are going to be losing any significant interest most likely. If, and this is a big if, there is a banking holiday like there was in the 1930s then you will have plenty of money on hand. If not, you will have missed out on a small amount of interest.
By the time you're talking about $10k, the risk of losing the money through theft is a million times higher than somehow losing it through the bank.

Furthermore in practice having that much money at home is a safety risk because if the wrong type of people get wind of this they may be willing to engage in an armed robbery when you are home. (Especially if the money is mostly stored in a safe.) A few hundred dollars is one thing, the higher amounts are way more questionable.

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Re: Take money out of the bank?

Post by 7eight9 » Sun Mar 15, 2020 11:12 pm

Mordoch wrote:
Sun Mar 15, 2020 11:09 pm
7eight9 wrote:
Sun Mar 15, 2020 11:05 pm
If it makes you feel better to have $1K, $5K or $10K at home then go get it. It isn't like you are going to be losing any significant interest most likely. If, and this is a big if, there is a banking holiday like there was in the 1930s then you will have plenty of money on hand. If not, you will have missed out on a small amount of interest.
By the time you're talking about $10k, the risk of losing the money through theft is a million times higher than somehow losing it through the bank.

Furthermore in practice having that much money at home is a safety risk because if the wrong type of people get wind of this they may be willing to engage in an armed robbery when you are home. (Especially if the money is mostly stored in a safe.) A few hundred dollars is one thing, the higher amounts are way more questionable.
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Re: Take money out of the bank?

Post by watchnerd » Mon Mar 16, 2020 12:04 am

cadreamer2015 wrote:
Sun Mar 15, 2020 8:59 pm
I think it wouldn't be unwise to have several hundred or maybe $1,000 in cash at home. We have about $120 in cash at home and I don't feel very worried. Maybe I should have a couple of hundred more, but I don't see any circumstance where I'd want to have $50,000 in currency at home, or anywhere close to that.
Do you live far from an ATM?

I don't get the need to have $1000 cash at home.
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Re: Take money out of the bank?

Post by cadreamer2015 » Mon Mar 16, 2020 12:11 pm

I don't get the need to have $1000 cash at home.
I didn't say there was a need to have $1000 in currency at home. I said it wouldn't be unwise to have several hundred or perhaps even $1,000 at home. I myself have only about $100 (though I might want to get a little more currency). I have lived in circumstances (Northridge earthquake in 1994) where it was difficult to get cash for a few days. I don't expect our current adventure with COVID-19 to make having even $1,000 in currency useful, much less the $50,000 the OP was asking about.
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BoggledHead2
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Re: Take money out of the bank?

Post by BoggledHead2 » Mon Mar 16, 2020 12:12 pm

I'm sorry, but this is next level ridiculous

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SuperGrafx
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Re: Take money out of the bank?

Post by SuperGrafx » Mon Mar 16, 2020 12:15 pm

cadreamer2015 wrote:
Sun Mar 15, 2020 8:59 pm
I think it wouldn't be unwise to have several hundred or maybe $1,000 in cash at home. We have about $120 in cash at home and I don't feel very worried. Maybe I should have a couple of hundred more, but I don't see any circumstance where I'd want to have $50,000 in currency at home, or anywhere close to that.
+1

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Ramjet
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Re: Take money out of the bank?

Post by Ramjet » Mon Mar 16, 2020 12:15 pm

I withdrew 1,000

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Re: Take money out of the bank?

Post by whodidntante » Mon Mar 16, 2020 12:17 pm

dru808 wrote:
Sun Mar 15, 2020 8:22 pm
Like, go to bank, withdraw 50k, go home with 50k in backpack? Nope
You wouldn't need a backpack for 50k. It would fit in the fanny pack you keep in your basement. :happy
Last edited by whodidntante on Mon Mar 16, 2020 12:18 pm, edited 1 time in total.

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watchnerd
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Re: Take money out of the bank?

Post by watchnerd » Mon Mar 16, 2020 12:18 pm

Ramjet wrote:
Mon Mar 16, 2020 12:15 pm
I withdrew 1,000
Did you clean it yet?

Physical cash is a horrible carrier of germs.

:twisted:
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whodidntante
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Re: Take money out of the bank?

Post by whodidntante » Mon Mar 16, 2020 12:18 pm

watchnerd wrote:
Mon Mar 16, 2020 12:18 pm
Ramjet wrote:
Mon Mar 16, 2020 12:15 pm
I withdrew 1,000
Did you clean it yet?

Physical cash is a horrible carrier of germs.

:twisted:
Burning is the best way to sanitize.

Retired1809
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Re: Take money out of the bank?

Post by Retired1809 » Mon Mar 16, 2020 12:23 pm

Don't just do something; stand there.

Taking money out of a federally-guaranteed bank or credit union account is just wacky. Nutty. But reflecting on it might explain the lines of folk anxious to buy years' worth of toilet paper and bottled water. Psychologists explain this behavior as folks wanting to feel like they're in control of at least something in a world seemingly out of control.

ExPatKiwi
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Re: Take money out of the bank?

Post by ExPatKiwi » Mon Mar 16, 2020 12:25 pm

Banks generally only allow maximum of $10k/day in cash withdrawals otherwise they have to report it due to federal money laundering rules.

https://en.wikipedia.org/wiki/Bank_Secrecy_Act
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The Broz
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Re: Take money out of the bank?

Post by The Broz » Mon Mar 16, 2020 12:30 pm

dru808 wrote:
Sun Mar 15, 2020 8:33 pm
Yes, get your money out of a bank and into a credit union.
Why does this matter?

Edit: sorry, i didn't read the whole thread. NVM
Last edited by The Broz on Mon Mar 16, 2020 12:34 pm, edited 1 time in total.

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JonnyDVM
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Re: Take money out of the bank?

Post by JonnyDVM » Mon Mar 16, 2020 12:40 pm

Based on prior threads, I think it’s good to have maybe a grand in physical cash for prolonged power out types of emergencies. I don’t know if it’s going to be useful in this situation. 50k? That’s over the top. Even if banks are ordered to temporarily close we buy almost all of our stuff electronically.

And you can say what ever you want about any other bank but I’ll be dammed if I’m going to sit quietly back and let you criticize Ally.
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Ramjet
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Re: Take money out of the bank?

Post by Ramjet » Mon Mar 16, 2020 12:44 pm

whodidntante wrote:
Mon Mar 16, 2020 12:18 pm
watchnerd wrote:
Mon Mar 16, 2020 12:18 pm
Ramjet wrote:
Mon Mar 16, 2020 12:15 pm
I withdrew 1,000
Did you clean it yet?

Physical cash is a horrible carrier of germs.

:twisted:
Well I made my wife take it out...haha

BoggledHead2
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Re: Take money out of the bank?

Post by BoggledHead2 » Mon Mar 16, 2020 12:44 pm

Banking is primarily done electronically

Have I missed something? Has the coronavirus mutated into a computer virus now too? The end is not only near, but really close? Get a grip.

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Ramjet
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Re: Take money out of the bank?

Post by Ramjet » Mon Mar 16, 2020 12:45 pm

watchnerd wrote:
Mon Mar 16, 2020 12:18 pm
Ramjet wrote:
Mon Mar 16, 2020 12:15 pm
I withdrew 1,000
Did you clean it yet?

Physical cash is a horrible carrier of germs.

:twisted:
Well I had my wife take it out..haha

pasadena
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Re: Take money out of the bank?

Post by pasadena » Mon Mar 16, 2020 12:47 pm

dukeblue219 wrote:
Sun Mar 15, 2020 8:47 pm
Seriously, though, I don't even know what would cause banks to be locked, much less why it would be a better solution than massive printing of money by the Fed and massive deficit spending by Congress.
People panic-withdrawing their cash for no reason.

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Re: Take money out of the bank?

Post by fru-gal » Mon Mar 16, 2020 12:50 pm

SuperGrafx wrote:
Mon Mar 16, 2020 12:33 pm
The Broz wrote:
Mon Mar 16, 2020 12:30 pm
dru808 wrote:
Sun Mar 15, 2020 8:33 pm
Yes, get your money out of a bank and into a credit union.
Why does this matter?
Boglehead zealots are anti-bank.
They always champion credit unions for some reason.
In my area almost all the credit unions pay significantly higher interest on CDs than the banks. This has been true for years.

As to this thread, I have long term something like $100 to $200 in cash at home because in a power failure credit card transactions don't happen. I use cash to tip delivery people, farmers markets, etc. and top up the cash when needed.

I can't in a million years imagine keeping $50,000 in cash at home.

People what happened to stay calm and stay the course? The next thing you know, you'll be selling stocks and mutual funds and locking in losses.

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