Keeping your money safe from Banks!

It is now quite clear to everyone that keeping money with the banks is a big risk. The problem is that you will not know the problem till the problem is so big there is no solution to that problem. The other problem is that it is very difficult to say which bank is safe and which is not. Even if you’re able to watch the bank it is quite difficult to keep a watch on each of every company that the bank has lent money to. So if a company or a group or an industry defaults,  it can take the entire bank down.

And in this whole process, after the disaster happens, who is left to foot the bill? It is you, the retail consumer, the small guy.

Things that you must do:

1. Keep minimum money in banks. Only upto your day to day requirement.
2. Distribute your deposits between atleast 5 companies and banks.
3. Use liquid and short term mutual funds to park your money. Even if one or two companies default, your entire capital is not at risk.
4. Use services of professional advisor to keep money safe.
5. Activate your internet banking & phone banking.

Things that you must not do:

1. Don’t keep all your money in one bank.
2. Don’t be glued only to fixed income guaranteed return deposits. This could be risky.
3. Don’t keep your money in small and local banks. Move your money to PSU banks and / or to large established private sector banks.
4. Don’t be attracted by 1% or 2% more return and buy shares of co-operative banks.
5. Don’t keep too much money idle in banks for a long time. Invest it immediately.

In addition to the above you can do a few other things as well. Ensure that you have your nomination taken care of. Ensure that your children are joint holders with you in your account as applicable. Ensure that your credit cards and debit cards are linked your savings account. And the last and the most important thing is do not just close your account blindly. You never know what you have connected with that particular account. So if you need to close an account then first give yourself about 1-2 years, check the transactions and in activities in that account. After 2 years if you find nothing happening to that account, then maybe you can consider closing it.

Kartik Jhaveri.

Director- Transcend Wealth Management.

Contact us on: 022-400240-43/ 44/45. Whatsapp on +91 7977877924.