For a lot of people, the current global situation is causing flashbacks of the market crash back in 2008. Understandably, people are nervous. Businesses have been shut down that have been deemed nonessential. Some have hopes of reopening, but others have closed their doors indefinitely. Situations like these can potentially lead to something called a “bank run.” This is when consumers pull all their money from their accounts in fear that their financial institution will run out of funds. The result is people stuffing their mattresses with wads of cash.
This is not reflective of reality, though. As of May 6th, 2020, there have been no reports of bank runs occurring. In fact, a post on CNBC.com in March stated that according to financial experts, “the U.S. financial system is stronger now than during the last financial crisis in 2008.”
Some would say it is safer to pull your money out of your financial institution. You would have control of it, ensuring its security. This, however, is shaky reasoning. For one thing, money held in a credit union is insured by the NCUA up to $250,000 per vesting. If something happens to your money, you get it back. No one with NCUA-insured money has ever lost a single cent. Unfortunately, this isn’t the case for cold hard cash. If that vanishes, for whatever reason, it’s gone.
As an aside, if your money isn’t in your credit union account, then it isn’t earning interest. You’re potentially missing out on extra cash. Experts say you should remove your money only if it’s needed. Otherwise, there’s no reason not to leave your funds where they are.
The consensus among financial professionals seems to be that everyone’s money is safe. Don’t feel the need to cash out and hide everything in your freezer. We are not at that point. The NCUA is here to protect your money should anything happen.