I keep $8,000 in a shoebox because banks failed back home. Am I crazy?

The question

An illustrative letter.

The answer

My dear, you are not crazy. You are careful, and you learned that care the hard way. In 2019, the Bank of Ghana revoked the licenses of 347 microfinance companies and 39 microcredit firms, and later that year 23 savings and loans companies and finance houses. Families watched savings they had trusted become impossible to reach. After seeing that happen to your own mother, keeping your money where you can touch it makes perfect sense. Let me explain why the system here is built differently, and then you can decide for yourself.

How is a US bank deposit protected?

The Federal Deposit Insurance Corporation, a U.S. government agency, insures deposits at member banks. Coverage is at least $250,000 per depositor, per insured bank, for each ownership category, such as single accounts and joint accounts. If an insured bank fails, the FDIC pays depositors their insured money, usually very quickly, often by the next business day. According to the FDIC, no depositor has lost a single penny of insured deposits since it was created in 1933.

Credit unions have similar protection through the National Credit Union Administration, also up to $250,000. Your $8,000 would be far inside either limit.

How do I know a bank is insured?

Look for the FDIC sign at the bank or on its website, or search the bank's name in the FDIC's BankFind tool at fdic.gov. Be careful with apps and payment services that hold money but are not banks themselves. Money held by those companies may not be insured in the same way, so it is worth reading how they hold your funds.

What are the risks of keeping cash at home?

• Fire, flood and theft. Cash that burns or is stolen is simply gone. Renters and homeowners insurance often covers little cash, if any.
• No interest. Safe, insured savings accounts were paying around 4 percent in the autumn of 2026. At that rate, $8,000 could earn about $320 a year. In a shoebox, it earns nothing, while prices slowly rise.
• No record. Cash leaves no trail, which can make it harder to prove savings when you apply for an apartment, a loan or an immigration benefit.

Am I the only one who feels this way?

Far from it. In the FDIC's 2023 national survey, 4.2 percent of U.S. households had no bank or credit union account, and "don't trust banks" was the second most common main reason they gave. Your feelings are shared by many people who have seen institutions fail. The question is whether the protections here are strong enough to earn your trust, and I believe they are.

What actually happens if a US bank fails?

Banks do sometimes fail here too, and the system is designed for it. When an insured bank closes, the FDIC usually arranges for another bank to take over its deposits, so customers simply become customers of the new bank, with their money intact. If no buyer is found, the FDIC pays depositors their insured balance directly. Either way, insured money does not vanish the way your mother's did. That is the difference between a savings company that fails and an insured bank that fails.

How could I start without feeling exposed?

You do not have to move it all at once. Many people begin by opening an account at an insured bank or credit union, depositing part of their savings, and watching it for a few months: logging in, checking statements, making a withdrawal to prove to themselves the money is there. Once you are comfortable, move more. Keeping a small amount of cash at home for emergencies, a few hundred dollars, is perfectly reasonable.

Ask about accounts with no monthly fees and no overdraft charges. Bring your identification, and ask what documents the bank needs. If you do not have a Social Security number, ask whether they accept other forms of identification, such as an ITIN.

What if I have a problem with a bank?

If a bank treats you unfairly, freezes your account without explanation or charges fees you did not agree to, you have somewhere to turn. You can complain to the bank first, and then to the Consumer Financial Protection Bureau, a federal agency that takes complaints about banks and passes them on for a response. Keeping records of every deposit and withdrawal makes any problem easier to solve.

What should I do with the money once it is in the bank?

Keep your emergency fund in an insured savings account, where it is safe and easy to reach. Our guide Why Savings Matter explains how a cushion grows. Once that cushion is in place, you can think about longer-term goals, one careful step at a time.

You honored your mother's lesson by protecting yourself, my dear. Now let her lesson grow up a little. Caution is wise, and so is a guarantee backed by the U.S. government. Open an account this month, start with part of your savings, and let trust be earned slowly.

One thing to do this week

Check a local bank or credit union on the FDIC or NCUA website, and open an account with part of your savings.