Bank Deposit Safety

If you want that kind of security, normal banks are a better place for your money. Traditional finance may have its drawbacks but at least customers losing their deposits because the bank went bankrupt is extremely rare these days.

No rich person is keeping money unprotected like that. Most banks offer FDIC maximization solutions.

Simply because "depositing" money at a bank is not supposed to be a safe operation. You're lending money to the bank. There is risk involved. If the government made it look like there's no risk, then someone is paying to offset that risk. I don't want to be the one paying for it.

Keeping your money in a bank is acting in a risky manner?

Why should there be risks? If someone just wants to park some cash without it possibly disappearing, that seems like a solvable problem. E.g. as the parent said, central banks could simply offer accounts to anybody.

None of your bank balances are 100% backed.

You do realize your money has been in a 'big bank' this whole time, right?

Banks don’t “guard your money” at all. They use it to make loans. Leaving money at a bank exposes you to vastly more systemic risk than just putting bills in a safe or something. If they’re not remunerating you for it, you’re getting screwed.

I can only guess that people have become so used to solid financial institutions that present little risk for deposited money. Even non-FDIC institutions, like stock brokerages, usually have extremely low risk for deposited cash. If you're thinking like that, why not let them hold onto it? It's less effort. Of course, we see the answer to "why not?" here.

> Having your bank account randomly disappear isn't one of the risks that anyone should have to take.Then you put your funds in less risky banks who did not lobby to get an exemption from the regulations that protect against precisely this kind of thing. Even, spread it around safer banks.Putting all of one's money in a bank because they have better returns or other investment opportunities is business. Not something that someone can be safe at the public's expense.The