Do You Heavily Rely on Your Bank for Your Money? What if It Went Bankrupt?
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This doesn't happen very often but when it does, a lot of people tend to be screwed out of their money and they have trouble getting it all back or even partially.
Ideally, banks never end up on any sort of trouble but in case they do, it's better to have that dough stashed up in the event that anything goes wrong or you need it immediately.
A quote from How Stuff Works:
The system works -- most of the time. The chances of your bank failing are extraordinarily small, what about when the unspeakable happens? Your bank could be making some bad decisions and losing a lot of money right now. The bad news is, before you even know it, much of your money may have already vanished.
A good example is the Portuguese bank which was called "Banco Espirito de Santo" (Transliteral: Holy Spirit Bank) did some shady stuff and those who had their savings and money in general ended up only getting partly of it, or still getting it.
There is a Bank guarantee scheme which protects deposits in savings accounts up to £75,000. If your bank went bankrupt, money from the scheme would reimburse you up to that amount.
The link that you have put up is for the US.
Hm, yeah. In UK that's normally the case but even with that guarantee sometime may go wrong.
Technical glitches are much more common and can be just as damaging. For example, recently TSB customers could not access their bank accounts for up to three weeks. It’d be useful to have cash or money in a separate unrelated bank for such occasions too.
I saw a news report yesterday that said that some people still can't after 5 weeks. Imagine having a business account that held other people's money. You'd lose half your Clients.
Bank is a business to from a perspective, so yeah they can pull out anytime.
Also they need to invest in some of the money to make interest, somehow they need to make profit. And investments are always risks.
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