Experts: Why Your Money Is Not Safe in Your Home or These 4 Other Places

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After battling inflation, rising interest rates, and a volatile stock market over the past couple of years, you may be worried about preserving your hard-earned money. Where can you stash cash and rest assured that it’s safe?

We reached out to a few experts and got their opinions on the worst places to keep your money–and where to put it instead. Find out if your cash could be at risk.

In Your House

Following the stock market crash of 1929, many Americans became deeply distrusting of banks and what they might do with their money. During the Depression era, it was common for people to keep cash hidden around the house, whether it was stuffed under the mattress or concealed in the ice box. 

Although bank failures still happen, it’s less common today. However, there are a number of people who keep money hidden around their homes. Your house is one of the worst places you can store your money. “Keeping some spending money at home is handy, but keeping large sums at home leaves your fortune open to loss,” said Bill Waggoner, president at Stoney Creek Advisors in Rochester Hills, Michigan.

The problem is that if physical cash is lost, stolen or damaged, it’s near impossible to recover. A fire could wipe out your savings in an instant, or a thief could make off with your cash while you’re on vacation.

Your Wallet or Purse

Society is increasingly becoming cashless, but there are still situations when you might need some spending cash, such as when you’re shopping or traveling. A survey by Travis Credit Union found that among those who regularly carry cash, the average amount they keep on their person is $46.29.

Make Your Money Work Better for You

It’s a bad idea to keep much more than that in your wallet or handbag. “People should try to limit the amount of cash they carry in their wallet or purses,” said Steve Gaga, assistant vice president and branch manager at Addition Financial Credit Union. Again, cash is essentially just paper. “Once it’s gone, there is no tracing it back,” Gaga said.

A Checking Account

Storing your money in a bank account is a far better option than carrying around cash, thanks to the added protections that come with keeping your money with a financial institution. However, your checking account isn’t the ideal place to store a large balance. 

For one, using a debit card to spend money in your checking account opens the door to fraud. “Your debit card is directly linked to your money; once it’s compromised, fraudsters can potentially take all of your money in your account,” Gaga said. In fact, you must report fraudulent charges within two business days to limit your liability to $50. If you catch it within 60 days, you could be liable for up to $500. Any later, and you’re out of luck.  On the other hand, The Fair Credit Billing Act limits your maximum liability for unauthorized credit card charges to $50, though many card issuers offer $0 fraud liability.

Checking accounts also typically don’t pay very high interest rates. So if you have a large sum of money just sitting in your account, it’s likely losing value due to inflation. Other deposit accounts, meanwhile, are paying as much as 5% or more, which could help offset that loss. 

Inside a Payment App

Digital payment apps are considered much safer than handling cash. However, like your checking account, these apps aren’t necessarily safe for storing large sums of money.  “To ensure your money is safe, you should not keep large balances in online payment platforms like Venmo and Cash App,” said Alia Dudum, money expert at LendingClub. 

“If you are not aware of the platform’s policies and your money is not FDIC-protected, you run the risk of losing cash that is being held in the platform if anything happens to the company,” she said. Aim to only keep enough funds in your account to cover any transactions. 

Make Your Money Work Better for You

Where To Store Your Cash Instead

If you want to protect your money, all of the experts we spoke to gave the same recommendation for where to put it–a high-yield savings or money market account at an FDIC-insured bank (or NCUA-insured credit union). Federally protected deposit accounts insure your money up to $250,000 per bank, so you don’t have to worry about losing your money if the institution fails. And seeking out a high-yield account ensures your purchasing power is protected as much as possible. 

Finally, keeping a minimal amount of cash in your checking account and relying on a rewards credit card for daily spending (and then paying off that card in full each month), can compound those savings further. 

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