Why I Won’t Keep Money in the Bank

I remember hearing stories when I was a kid about the crotchety old man up the road who didn’t trust banks. I think every town in America “had” one. He’d lived through the depression. He was a kid when Wall Street fell, and he just didn’t trust some big old bank with his hard earned money. When he died, they found millions of dollars stuffed in cubby holes all over his house.

This is a popular urban legend, although parts of it have been proven true more than once over the years. I’m not claiming to be the neighborhood crotchety old miser by any means, but have you taken a look at Wall Street lately? August 4, 2011 marked the most significant drop in years, with the DOW falling over 500 points in a single day. Of course, our personal bank accounts are insured by the FDIC, right? Hmm. Have you taken a look at Washington lately? Do you still trust them with your money?

There are a couple of reasons why I don’t keep money in my bank account.

Trust and Balances

The government has become a petty squabbling ground of partisan politics. It always has been, of course, but it seems like it is getting worse. Or I’m losing my patience. Either way, when Michelle Bachmann sends out a fax to the supporters registered on her website wishing the president a happy birthday, zinging him with the fact he celebrated by hosting a $38K per plate dinner party when people in America can’t afford food, and wraps it all up by asking for more money to fund her campaign — well, I lose a little more faith in everyone.

When the economy collapses, my money will not be in a bank, thank you very much. By using a private organization for the bulk of my money, I don’t have to trust the government. Corporations are in much better shape these days.

My Credit Union Hates Me

I have a credit union checking and savings account. I keep the minimum amount in it to keep it open: $25.00. My checking account balance hovers around 5 bucks. I use this account solely to cash checks. That’s it. I used to keep a small amount in there for emergencies, however one unscrupulous creditor who used the “one time” ACH information I gave to pay a specific amount to withdraw unauthorized funds from my account the following month. He lied on the paperwork he gave to his bosses, stating that I’d agreed to monthly payments, in order to better his own performance at work. The company itself did not do this, but one guy who happened to be a jerk.

To keep anyone who happens to have my ACH information from doing this again, I simply do not keep money in the account. If I need to make an ACH payment from this particular account, I arrange it for a specific day, and one day prior to this date I will deposit the money I need to pay.

Sources: personal experience