What are 3 reasons why people should put their money in a bank instead of storing it under the mattress?

6 Reasons to Keep Your Money in the Bank

• You earn no interest and inflation will eat up your savings.
• No FDIC insurance.
• You might be burglarized.
• You could forget where you hid it.
• Someone might replace your mattress (hiding spot) as a surprise gift.
• Your dog might eat it!

Why are banks allowed to hold your money?

Why Do Banks Hold Funds? Banks can hold deposited funds for a variety of reasons but, in most cases, it’s to prevent any returned payments from your account. Depending on the type of deposit involved, it can take several days for the money you deposit to be transferred from the payer’s bank to your bank.

Why do we use banks?

A bank is a financial institution which is involved in borrowing and lending money. Banks take customer deposits in return for paying customers an annual interest payment. The bank then uses the majority of these deposits to lend to other customers for a variety of loans.

Why would a bank freeze your account?

Banks may freeze bank accounts if they suspect illegal activity such as money laundering, terrorist financing, or writing bad checks. Creditors can seek judgment against you which can lead a bank to freeze your account. The government can request an account freeze for any unpaid taxes or student loans.

What is saving and why is it important?

The importance of saving money is simple: It allows you to enjoy greater security in your life. If you have cash set aside for emergencies, you have a fallback should something unexpected happen. And, if you have savings set aside for discretionary expenses, you may be able to take risks or try new things.

What are two advantages of keeping your savings in a bank?

Three advantages of savings accounts are the potential to earn interest, it’s easy to open and access, and FDIC insurance and security. Three disadvantages of savings accounts are minimum balance requirements, lower interest rates than other accounts/investments, and federal limits on saving withdrawal.

What happens to my money in the bank if there is a depression?

The good news is your money is protected as long as your bank is federally insured (FDIC). The FDIC is an independent agency created by Congress in 1933 in response to the many bank failures during the Great Depression.