Husband is suspicious of high yield savings accounts with online banks

[lesliehawke]

Hey all!

I’ve been trying to convince my husband to move our $30k emergency fund into a high yield savings account with Ally since there is a 3.3% APY. It is currently in a big bank savings account with a 0.01% APY.

He is on the more distrustful/cynical/suspicious side which is great because I’m very trusting to a fault. But I really feel like this is the right move. He understandably doesn’t want to trust some random bank with all of our liquid savings. Need some encouragement and affirmation that this is what people do with savings that need to remain liquid and out of the market. Also any feedback on Ally if you have experience with them.

 

[resjudicata]

@lesliehawke Ally is fdic insured, so there’s zero risk in terms of losing it.

 

[atheosalio]

@resjudicata

As with all banks FDIC only covers actual theft- not the bank making bad decisions. The banking bill passed after the 2008 debacle makes it so that banks get “bailed in” by customers.​

 

[gigi1001]

@atheosalio Please provide the law/bill for your claim. My understanding is FDIC insurance is there to reduce the risk of bank runs due to failed banks.

Their entire job is to insure against failed banks(bank making bad decisions leading to it's closure): https://www.fdic.gov/consumers/banking/facts/payment.html

 

[atheosalio]

@gigi1001 Here’s an article

Here’s the actual bill

Another article

yet another

One of my very best friends is an well known and respected economics professor and could not stop talking about how dangerous this was when it passed.