Money

The Bank Under Your Bed

A significant number of people stash cash at home—but that doesn't mean it's a good idea

You probably still remember where you kept money as a kid.

As soon as you got your allowance, you’d stash it in a lock-box, a piggy bank, or between the pages of an encyclopedia—somewhere your sticky-fingered siblings wouldn’t be able to get to it.

But then your parents helped you open your first bank account, and those days were over. Right?

Actually, if you’re like many Americans, there’s a chance you still have a special spot for your money. In a new American Express survey, as many as 29% of people said they keep at least some savings in cash bills and coins. Of those, 53% hide that money in a secret area.

Millennials are especially likely to keep a physical stash of cash. Among young adults who save cash, as many as 67% said they’re hiding it outside a bank account.

And while this survey didn’t ask people where they’re keeping their money, previous research has found that common locations include the freezer, the sock drawer and underneath a mattress.

For some people, keeping cash on hand is a safety measure: 25% of people surveyed said they expect a financial emergency this year. Others might budget their money by setting aside envelopes with predetermined amounts of cash.

But is it really wise to have large sums of cash lying around the house? Not really, experts say.

In the case of theft or a fire, the piles of bills in your bedroom don’t have the same loss protections that an FDIC-insured savings or checking account has.

Still, it’s okay to have some cash socked away in case of an emergency. It’s best to choose a single spot and to let at least one other person know where it is. That way, you’ll be less inclined to accidentally throw away your savings. And if you pass away, those funds won’t be lost.

Looking to deposit some of that money in a safe place outside the house? Find out how to open a savings or checking account here.

MORE:

One Bank or Many: Where Should I Keep My Accounts?

Top Banking Mistakes to Avoid

7 Reasons You Need an Emergency Fund

Tags: investing
   
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