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How can you save up 100k and not know what FDIC means?
what is economic literacy
Would have to make sure your savings account is FDIC Insured. It probably is.
Thank you
No. FDIC covers 250k for individual accounts
Thank you
Just curious, is this an emergency fund or broader rainy day fund? If you don’t think you’ll access most of it within the next 5-10 years you’d be missing out on quite a bit of of market return. If it’s for a down payment or short-term need, keep on keeping on and kudos to you OP for saving so much
M1 thank you. Super helpful
You should at least hold this in a higher yield savings account while you learn about index funds
Save it in ally or Goldman Sachs Marcus or even discover high yield savings accounts. You get about 1.6-1.8% interest on it.
Off topic but you should absolutely move most of your savings from BofA to a high yields savings account. BofA is 0.03% versus at least 1.6% for the other HYSAs. You can also look into no-penalty CDs at Ally for 1.9%.
That’s $1900 in interest versus $30 interest!
This is my impression of BAC.
https://m.youtube.com/watch?v=-DT7bX-B1Mg
Ask your colleagues at deloitte or other big 4 or specialist FS consulting friends who've worked on Resolution Planning projects for US banks to explain what happens when a bank goes under.
Remember also that bank deposits are Liabilities to You. You don't own them, you have a claim on them thru a bank. This is different than holding physical cash or physical gold or crypto keys.
Therefore, The ans to ur question relies on two considerations:
1. Are the post crisis regs and models put in place at big banks (TLAC/bail in bonds, resolution trigger, basel 3 liquidity and leverage req, ccar) sufficient to protect depositors from the fractional reserve banking model?
2. Is BAC (or other big banks) too big to fail?
Options:
A. If you believe the models ur colleagues built are robust, you have no worries.
B. If you believe the models ur colleagues built are not robust, but BAC is still politically too big to fail, then you have no worries
C. If you believe the models ur colleagues built are not robust, and there is no political will to bail out a big bank, then you may start to worry.
D. Even if A and B happen consider the inflation and Fx risk of the currency you're holding.
I'm aware that there is fdic ins for funds less than 250k. In which case I'd say refer to option D.
Even if BAC goes under, which is very unlikely, you'd have some claim to your monies with uncle Sam.
Thank you
Someday soon, hopefully, this will bottom out. Then use that cash to get into the market.