Why Have Cash on Hand for an Emergency?

It is not because you think the banks will fail.

by Eric Holdeman / March 17, 2020

I saw a story, which I'll link later in this blog post. The thrust of it is that you can be assured that your bank deposits are insured via the FDIC, all of which was put together after the Great Depression when there were runs on banks. Because of these protections, you do not have to worry about the security of your savings deposited in a bank.

The reason to have cash on hand in this digital world is because telecommunications can fail. There can be power outages, especially with natural disasters that cut the power due to wind, ice, etc. If you have "cash," you can still purchase items -- that is if the cashier knows how to make change without the machine doing it for them!

How much cash you need is an individual choice -- and, based on if you have money in the bank. Many Americans do not have any rainy-day savings. 

Here is the article on keeping your money in the bank, Do NOT take a bunch of cash out of the bank because of coronavirus.

Last, the No. 1 mission of banks in a disaster is to be sure to have cash available to their customers. 

 

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