Is Your Money Really Safe In The Bank?


Banks have had it pretty rough over the last few years! The US Sub-prime Mortgage Crisis, The Eurozone Sovereign debt crisis, Credit Downgrades, people reclaiming money for unfair bank charges and now mis sold Payment Protection Insurance. This is by no means an exhaustive list of the problems banks have faced and are still facing.

The big financial news story this week in the UK is the RBS/Natwest computing glitch that has left customers unable to access their money, pay bills and even stopped salaries being paid into accounts. The word glitch massively understates the problems that have been caused for people due to the error.

It’s once again thrown up the question in my mind, Is My Money Really Safe In The Bank?

Since the first precious metals began to be made into coins mankind has sought out safe places to store that money. Whether it be in financial institutions, locked in a safe, or buried in a field we have always looked to make sure our money is accessible to ourselves & nobody else.

The computing nightmare that has engulfed Natwest this week has shown just how quickly things can go very wrong!

So is your money safe & accessible in the bank?

Is it safe?

We’ve all seen movies based on dramatic bank robbery’s, almost every time the thieves plans are foiled and the money remains in the vault. While banks may be well defended against attacks from armed gunmen, does that mean your money is safe?

The truth is that nowadays thieves don’t even need to enter a bank to steal your money. Online and credit card fraud is a massive criminal industry. I have been hit in the past by online fraud so soon began to take it seriously and protect my information better! Though financial institutions try and find ways to stop fraud, as soon as one method of fraud is shut down thieves quickly find other ways to steal your money electronically. It does make me wonder if thieves would have less chance of getting at my money if it was under a floorboard!

What about the financial stability of banking institutions? We all saw in the credit crunch how vulnerable banks were to a sudden collapse in overnight lending. The whole financial system was believed to be on the brink of meltdown. Yes banks have been given more money since then but many are still believed to be insolvent, were it not for some questionable financial accounting! The only thing that stopped people then from withdrawing all their money from banks were guarantees given by governments. Given the state of government finances now though, and with all that people have witnessed during the Eurozone crisis, would you trust your governments ability to live up to these guarantees?

Is it accessible?

The computing glitch at Natwest this week has shown how quickly your money can become very difficult to access! It’s all well and good being able to bank at the click of a button, but when the systems go down that’s it they’re down until the problem can be fixed, if it can be fixed! During this time you may have no access to your cash whatsoever!

A problem like the one at Natwest can easily destroy trust and lead to a run on the bank. I’m surprised that didn’t happen this week. I certainly withdrew some of my cash in case the problem worsened and I bet I wasn’t alone in doing that. If everyone had tried to withdraw their cash though, people may well have been unable to do so with ease as we saw in the run on Northern Rock in 2008.

Can we live without the banks?

The problem when wondering if our money is really safe in the bank is that it’s very difficult to live without them. Can you really go through life living on cash alone, with no bank account or debit card? Is it possible to pay all your bills with no bank account? I think you’d seriously struggle and if anyone has tried to do this I’d love you to comment below. If you really are worried about whether your money is safe in the bank though, there’s nothing to stop you keeping some of your cash elsewhere just in case a computer glitch or worse creates problems accessing your money again in future!

6 Responses to Is Your Money Really Safe In The Bank?

  1. Vanessa says:

    I’ve often wondered the same thing. If you think about it, all our money is nowadays is numbers — very discerning.

    • Adam Buller says:

      It is, makes you wonder how much of a paper trail exists if there were to be a massive IT failure & if the man power would exist to sort it out!

  2. Tackling Our Debt says:

    That computer glitch sounds awful. Maybe we should hide our money in the mattress like our ancestors did.

    I was a victim of credit card fraud as well. Fortunately the person using my card in South America did so many transactions at once that it alerted the fraud department right away and they called me and cancelled my card and voided the transactions.

    • Adam Buller says:

      I’ve not been too badly affected, just a few unpaid bills to sort out but people have lost business contracts & even houses over it. Most people I speak to have been a victim of electronic fraud, which shows how big the problem is!

  3. Meghan says:

    I trust mine, but then again I’m Canadian.

    Then again a glitch could happen, but to me the bank is a necessary evil. I need someplace to have my paycheque deposited. It’s either trust a bank, or have no money. I’ve never really thought about alternatives.

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