Why is a Savings Account Safer than your Mattress?

Even with the most recent string of bank failures, bank account holders will be better protected by putting their hard earned cash in savings accounts than storing money under the mattress. Despite the recent turn of economic events, no one lost the full value of their FDIC insured savings account. That cannot be said for those who lost money stored under their mattress in a house fire.

Because of the FDIC protection and the fact that money in savings accounts earns interest, especially online savings accounts, your money is exponentially safer in a savings account than storing it under your mattress. What if your mattress gets burnt up in a fire? Or what if someone reaches under your mattress and takes your money without your consent? A savings account definitely mitigates those risk factors.

After slaving away 40+ hours a week at a job you can barely tolerate, the last thing you want to do is risk losing your money to a bank failure or some type of financial institution default. That is why US Government passed the Glass-Steagall Act of 1933 that instituted the creation of the Federal Deposit Insurance Corporation (FDIC).

Bank failures are common and in this country the history of bank failures dates back to many moons ago and into the onset of the 21st century. One of the major bank failures was the Panic of 1873 and of 1893. Back then legislators worked on better security for bank deposits. In 1913 the Federal Reserve System was created.

The Federal Reserve System was enough to fend off the mother-load of bank failures during the Great Depression. Thousands of banks closed during that time which was caused by panics from bank customers and the subsequent bank runs they partook in. More steps have been taken since those times to reduce the bank panics and the government created FDIC insurance to protect the assets and investments of the average American citizen.