24 Aug 2008

"Is My Bank Safe?"

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Robert Wenzel over at EconomicPolicyJournal gives us his thoughts on protecting yourself from bank runs.* On a related note, in years past my wife and I had used Emigrant Direct as a way to take money out of our checking account (where we might spend it) and get it earning interest but in a very accessible place. It paid much better rates than what our bank’s saving accounts offered, and it was all online.

Well, I’m not sure we want to continue using Emigrant Direct for our alternative savings account anymore, because its business is basically home loans, which (so I hear) isn’t the best bet at the moment. Anyone have any thoughts on ED (not to be confused with a disappointing condition)? ED’s accounts are FDIC insured, but still, if the point is to have a place to store your months’ worth of savings in case you get laid off, you don’t want the hassle of a bank closure.

* Did you know that bank runs are not a fact of life, but rather the result of government-sanctioned fractional reserve banking? Read Murray Rothbard’s The Case Against the Fed (free pdf) for the juicy details.

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