A new report from the Wall Street Journal’s Smart Money revealed a new trend in storing cash. Many Americans, exhibiting reduced trust in the financial sector, are walking away from the traditional bank account, preferring instead to store their money in a home safe.
The Home Safe Gaining Popularity
The home safe has always been an option for people to store their money. However, with local banks and credit unions becoming prevalent centuries ago, more Americans commonly store their cash with financial institutions.
However, the downfall of the financial sector and dwindling trust in mega-banks tied to one Wall Street scandal after another have consumers reverting back to the home safe as a secure way to store their money.
The report found that people are not only willing to spend thousands of dollars to have safes installed in bed frames or added as entire wall units, they are taking extra steps to make the safes attractive by creating smaller custom units made of marble or larger ones that double as luxurious walk-in closets.
A Bank Account May Still the Best Choice
Americans’ skepticism of their bank account has increased in recent years. According to a Gallup poll conducted last year, 36 percent of respondents have “very little” or “no” confidence in U.S. banks, largely because the lack of online security can compromise their hard-earned money in an instant.
While Americans are finding refuge in storing their money in home safes, critics of this practice say that bank accounts are still the best choice.
Experts say that storing every drop of cash in a home safe is a riskier approach because the funds don’t benefit from Federal Deposit Insurance Corporation (FDIC) coverage of up to $250,000. In a home safe, if the money is stolen, it’s lost forever.
Also, money stored in a safe can’t earn interest on each dollar saved as it can in a high-interest checking account or other interest-bearing account.
It is recommended that Americans use a home safe for other valuable items rather than cash, since personal property items are covered by homeowners insurance.