Smart to keep $25,000 in a checking account?

[legion]

You could...some investors (like Harry Browne) suggest keeping cash on hand as part of a portfolio. It protects you from deflation and should stocks and bonds fall in price in the future...you'll be able to snap them up cheap.

As it is now the FDIC insures the deposits, so you're fine.

Harry Browne says the safest place to keep your money is in short term treasuries or a money market fund that invests in short term treasuries that does not have repo agreements. He was very clear on this.

"To be suitable for the Permanent Portfolio’s cash portion, a money market fund should be 100% invested in Treasury securities, without using repurchase
agreements or federal agency securities as investments."

-Fail Safe Investing, 2003 Edition

I think its remarkable he mentioned avoiding repurchase agreements that far ahead of the financial crisis.

 

[Zippyjuan]

Money markets and short term Treasuries offer very low rates of return. One year Treasuries are only yielding 0.18% and according to BankRate, Money Market funds are about one half of a percent so you won't gain much by moving money into them. There are better returning safe investments available such as dividend paying stocks. http://www.bankrate.com/brm/rate/mmmf_home.asp I note that Harry Brown's advice came in 2003 when you could get 1.2% on short term Treasuries (seven times more than today) http://www.infoplease.com/business/money/market-interest-mortage-rates-2006.html Money markets were only slightly better at 0.64%. Browne advocated an allocation of 25% gold, 25% stocks, 25% bonds, and 25% cash.

 

[LibForestPaul]

Depends on your interpretations of current events, your current economic picture, your immediate needs, and future wants.

If you believe in an Argentinian default, then no, probably not a good idea.
Do you believe the interest rate you receive is equal or greater than the rate your Federal Reserve Notes are losing value, then no, probably not a good idea.
Do you need this account to write checks, purchase a home, then yes.
Do you have a six month supply of cash to cover food, housing, insurance, transportation? If no, then yes, good idea to get this money into a checking account.
Do you have a one month supply of cash as above on hand? No, probably better to put some money in sock draw.

etc.
P.S. Which bank, credit union, or state bank will you be opening up this checking account is also something to consider. Personally, probably best to avoid BOA.

 

[heavenlyboy34]

my 2 cents-it's relatively safe, but safer in credit union checking accounts than corporate banks like BoA.

 

[brandon]

I guess if I was saving up for something I was going to buy soon. Otherwise, why not throw it into some kind of mutual fund?

 

[Danke]

The money you deposit in a bank is no longer yours. Look up the agreement that accompanies the signature card.

 

[cornell]

You should consider looking into high-yield checking accounts. With minimal requirements, some let you earn 1.5-2.5% on your money. Not much, but better than nothing...

 

[scrosnoe]

get out of debt first

then just consider doing good and helping others

also to ponder art, coins, bullion collectibles, improving real estate smartly, insurance plans for family, survival 'stuff'

cover the matter with prayer and see where God leads you -- it might be to start a second business / ministry / something completely different...

blessings/sc

 

[PaulStandsTall]

We all know the story with banks...do you think its smart/safe to keep $25,000 in one checking account?

No.

What on earth could happen that you would need that much in cash? Your car could blow up, house burn down, children get cancer, and you still wouldn't need to have that much in cash. I would say $10K maximum, but it depends on your individual situation as your mortgage/bills could be an outlier. Also, saving your wealth in dollars isn't the best idea, as the government that issues dollars thinks (incorrectly) it is immune to economic laws.

That said, after you have the basic emergency funds taken care of, it's a good idea to protect your wealth with an inflation-proof asset a la silver/gold. Like another said, in a deflationary environment, it's good to have cash to purchase assets. So, if you are rich enough you can do both.

 

[Carson]

Twice as smart to keep $50,000.00.


”First you get the sugar, then you get the
power, then you get the women”

~Homer Simpson

 

[Kluge]

Wouldn't it be best to shun the banking system altogether?

 

[-C-]

Old School

Buy a 100$ vacuum sealer from Walmart. They come with bags, well at least enough to seal 25k with. Vacuum seal your money and fucking bury it. Seriously, go to the bank and tell them you want your 25k in cash...and watch them delay you....or grab a shovel and get it as fast as your physical ability will allow.

 

[Danke]

Buy a 100$ vacuum sealer from Walmart. They come with bags, well at least enough to seal 25k with. Vacuum seal your money and fucking bury it. Seriously, go to the bank and tell them you want your 25k in cash...and watch them delay you....or grab a shovel and get it as fast as your physical ability will allow.

Vacuum seal it and bury it? So you think it will be worth the same or more in the distant future?

 

[Carson]

Buy a 100$ vacuum sealer from Walmart. They come with bags, well at least enough to seal 25k with. Vacuum seal your money and fucking bury it. Seriously, go to the bank and tell them you want your 25k in cash...and watch them delay you....or grab a shovel and get it as fast as your physical ability will allow.

I've experimented some with stashing things around. First you've got to remember where you buried it. Then nature would have had to of missed it. Critters have a way of gnawing things up and carrying things off. You may want to experiment yourself with something your not to keen on anymore.

Maybe take a photo of the spot.

 

[kpitcher]

If they needed to have a lot of cash then they could use multiple banks and put $250k in each one

Merril Lynch used to have a system which would automatically dispense funds to multi banks and accounts so you were always insured but was always reachable under a single ML account. I assume there are other financial services that do this.

 

[rpwi]

Careful guys... The government has what are called "Suspicious Activity Reports" and "Currency Transaction Reports"

So say you want to pull your cash out because you're opposed to fractional banking...the government may see this as a sign that your trying to avoid taxes or make off-radar illicit transactions.

Very big-brotherish...and it could result in an audit.

Anybody know more about these and what the thresholds are for getting flagged?

 

[ItsTime]

Careful guys... The government has what are called "Suspicious Activity Reports" and "Currency Transaction Reports"

So say you want to pull your cash out because you're opposed to fractional banking...the government may see this as a sign that your trying to avoid taxes or make off-radar illicit transactions.

Very big-brotherish...and it could result in an audit.

Anybody know more about these and what the thresholds are for getting flagged?

I know all to well about these. You will never know if your account has flagged for SAR. NEVER ask them that will be an automatic flag. But it goes beyond the SARs and the like. The Patriot Act has a "know your customer" clause. What is that? That is where the government forces the bank spy on every single one of your transactions. What can get your account flagged? Well in my case it was me paying my bills on time.

I got a letter from my bank saying if I did not contact them within 24 hours that my accounts would be frozen. They wanted to know why I was paying my bills on time on the same date every month. (I send international wires to pay for advertising). Then they wanted to know about tiny transactions of $100 here and there. Basically I had to give away trade secrets in order to not have my accounts frozen and handed over to the government.

Edit: I also believe that Rand Paul said that 100s of thousands of SAR's get reported every year. So my guess is the littlest of things can set them off.

 

[LibForestPaul]

Careful guys... The government has what are called "Suspicious Activity Reports" and "Currency Transaction Reports"

So say you want to pull your cash out because you're opposed to fractional banking...the government may see this as a sign that your trying to avoid taxes or make off-radar illicit transactions.

Very big-brotherish...and it could result in an audit.

Anybody know more about these and what the thresholds are for getting flagged?

From what I know, $2500, plus having more than $10k on hand requires "license"...

$500 per day w/d * 300 days = boat load of money...no?

 

[WilliamC]

Hey, I've got an idea.

If you have this much in a checking account and haven't done so then max out your donation to Ron Paul today.

I only donated $25, and that leaves me with about the same amount left in my checking account.

The only other wealth I could tap to donate doesn't really belong to me, but if it did I'd be maxing out today myself.

 

[Dianne]

What about off shore bank accounts?