Market slowdowns and recessions can be scary. Ask anyone who lived through the financial crisis in 2008. The uncertainty and fear can almost be overwhelming, and many people lose faith in financial institutions as a result.
Unfortunately, this can lead people to take drastic actions, such as withdrawing all their money from their savings (and occasionally their 401(k) plans) and storing it somewhere they think is safer, like their mattress or sugar bowl.
This isn’t a good idea, though. No matter how scared you are of a recession, the truth is that credit unions and banks are the safest places you can keep your money and offer benefits that you won’t get if you keep your money in your mattress.
Have money questions? We've got answers!
Credit Unions And Banks Are Insured
The biggest reason to leave your money in a credit union or bank is simple—they are insured. All credit unions are insured by the NCUA up to $250,000, while banks are insured by the FDIC for the same amount. If you have over $250,000 in your accounts, work with your financial institution. There are numerous ways to insure all of your deposits.
Credit Unions And Banks Pay Interest
When you keep your money in a savings account, that money earns interest. That interest is what a financial institution is paying you to keep your money with them. While you won’t get rich off the interest, you will definitely get more cash back from a savings account than you will your mattress.
Online Payments Are More Common
These days, most people don’t use cash or checks to make payments. According to one survey, over half of the respondents said they paid by a debit card, while only 14% actually paid with cash. Even more striking, person-to-person mobile payments are becoming more and more common, especially among young adults.
Like it or not, cashless transactions are here to stay. When you couple this with the fact that physical money can easily be contaminated with bacteria and viruses, it’s not hard to see how cashless transactions will become more popular than ever. If you want to use cashless transactions, though, you’ll need to have a checking account.
Keep Your Money Safe With First Alliance Credit Union
When the world goes through a crisis and the markets are volatile, wanting to feel like your money is safe is only natural, especially considering how many banks failed during the Great Recession. However, financial institutions are by far a better choice than squirreling your money away somewhere in your home.
When you become a member at First Alliance Credit Union, you can not only make sure your money is safe in a traditional savings account, you can also make your money work for you. Invest in a Certificate of Deposit (CD) to get a higher rate of interest, or put your money in a money market savings account. You can even put your money in a WINcentive savings account for a chance to win a prize each month you increase your savings!