If you're thinking of withdrawing extra money for the Year 2000, read this first

You may have heard someone say that before January 1, 2000, you should have stocked up on extra money just in case your bank can't cash checks or operate ATMs because of a Y2K problem. What do we have to say about that?

The FDIC recommends that you make a reasonable decision based on solid information, not on false, uninformed or exaggerated reports on the street, in the media or over the Internet. We also believe that you should consider the following:

l Federal and state regulators expect that most banking services will be functioning normally on January 1.

Examiners have been visiting every FDIC-insured bank and savings institution in the country to check on its progress. Almost all insured institutions are on schedule to be Y2K-ready, so that it should be "business as usual" on January 1. The very few institutions not making satisfactory progress are undergoing increased scrutiny by bank regulators and are required to correct their deficiencies.

As part of this readiness effort, banks, automated teller machine manufacturers and ATM networks (the systems that give you access to your bank account using another bank's teller machine) are fixing and testing their machines. And if problems do occur, banks have back-up plans so service can continue.

l The funds you leave in a federally insured account are absolutely safe. The same can't be said for the money you take out of the bank.

Wallets and purses are easy to lose. And while robbers are always out there, as we get closer to the New Year they may be especially active if they hear that people are carrying extra cash. Among the potential crime targets: people who have just taken cash out of ATM machines.

We also caution everyone about hiding a large sum of money at home, where it can be taken by a thief, misplaced by a family member or destroyed in a fire, even if the cash is in a metal safe or file cabinet. "It's never a good idea, at any time, to carry around a large amount of cash or keep it at home," says Frank Hartigan, the Washington-based Y2K Program Manager for the FDIC's Division of Supervision.

l If your favorite ATM is out of order, you can get cash elsewhere.

Just because an automated teller machine is "down" doesn't mean your bank or the ATM network your bank belongs to is having a Y2K problem. So, if one ATM isn't working, try another nearby. Or, during regular banking hours, just go into a bank branch.

You also may be able to use your ATM card or credit card to get cash at a merchant's cash register (perhaps for a small fee).

l There are more ways to pay for products and services than just using cash.

Most merchants accept your check, credit card or debit card (an ATM-type card that deducts from your account to pay for purchases). "In this day and age, when there are so many options for making payments, consumers shouldn't feel they need to rely solely on cash," says Hartigan.

If you have a question or problem regarding the best ways to make a payment (or even get additional cash), consider calling your bank or credit card company. Many banking institutions will have extra customer-service staff answering phones or otherwise assisting consumers during the Year 2000/New Year's weekend.

l Y2K problems won't cause your bank to lose track of your money.

It's highly unlikely that a Year 2000 computer problem will trigger an error in your account balance. If something does goes wrong, though, institutions are required to keep back-up records that can be used to identify and correct errors that might affect your accounts. So why take out a lot of cash because you're afraid the bank will lose your money and then risk losing it yourself? And remember, every extra dollar you take out of your account is a dollar that no longer earns interest.

Final Thoughts Rest assured that the banking industry will be ready if you and other consumers have a need for more cash. The Federal Reserve System, which supplies banks with the coins and currency they need to handle daily banking operations, has plans to print extra cash as a precaution to meet any increased demand. But as we've described here, bank regulators and bankers have spent years preparing to overcome the Year 2000 problem so that there should be no need for anyone to withdraw extra money.

We leave you with the words of respected financial columnist Jane Bryant Quinn. In writing about the Y2K issue recently, she said: "Would I take savings out of the bank, lose the interest it's earning and risk total loss if I had a fire? My money stays put, where it's FDIC-insured."

-- Searcher (Searcher@IN.com), August 23, 1999

Answers

What a crock. Banks are NOT ready for Y2K, not as of today. Who the hell knows what will happen on Jan 1? They have had YEARS AND YEARS to prepare for Y2K, to be in a position to say: "We are ready!" They did not, they are not.

The amount of actual CASH available to you is pidly -- something like $1.17 for every $100 deposited. So, if the fearful BANK RUNS begin due to Y2K or any other reason, 1.17% of us will get our money. The rest will be S.O.L. Welcome to the reality of fractional reserve banking -- when its bluff is called, the show is over.

Absolutely there is a risk when you don't keep your money in the bank. And there is a risk when you do. Come Jan 1 (or even before if there are bank runs), which is the riskIER of the two?

And remember: Once the show is over, all promises become empty. And that includes those of the FDIC.

-- King of Spain (madrid@aol.com), August 23, 1999.

so the bottom line is you are a child,it's not your money and you're not qualified to decid what to do with your money.on a sidebar,what percentage of total deposits are actualy covered by the FDIC?

-- zoobie (zoobiezoob@yahoo.com), August 23, 1999.

Well the propaganda now comes directly to the forum!!

incredible!!

-- David Butts (dciinc@aol.com), August 23, 1999.

Troll Alert!

-- Dennis (djolson@pressenter.com), August 23, 1999.

This advice from the FDIC was posted on this forum once before, back on June 28th. Late June just happened to be when Washington D.C.'s 88 Y2K contingency plans were announced in a front page story in the Washington Post. The FDIC advice was posted on this thread:

"Don't take the money and run" says FDIC

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=0010hf

-- Linkmeister (link@librarian.edu), August 23, 1999.

>> The funds you leave in a federally insured account are absolutely safe. <<

This is a silly overstatement. No safety can be "absolute". The only purpose of such a statement is to encourage people not to analyze the actual risk.

If a sound analysis showed that an FDIC-insured account is the least risky among all alternatives, then that should be sufficient to convince people to accept that risk in preference to others.

>> Rest assured that the banking industry will be ready if you and other consumers have a need for more cash. <<

Telling people they don't have to think about risk is just plain dishonest in my book. These are just soothing words, not facts. A genuine analysis of the facts would prove that in many extreme, but possible, scenarios these assurances would be untrue. Events could render these soothing words tragically misleading.

If the truth is in your favor, that FDIC accounts are a good risk, but (like all of life) a risk, why not rely on it instead of this kind of blatant misleading half-truth?

-- Brian McLaughlin (brianm@ims.com), August 23, 1999.

I doubt very much that Searcher is advocating this. Just making us aware of the desperation out there.

-- Mara Wayne (MaraWayne@aol.com), August 23, 1999.

The above info posted by searcher is an insult to my intelligence and autonomy as a tax paying citizen. I really don't care what federal and state regulators expect about banking services on January 1,2000. What they expect means nothing to me. Especially since the "most banking services" that they"expect" will be functioning may not include mine! And re: "wallets and purses are easy to lose" and statements that include absolutes like "always" and "never" reveal to me that the speakers of these statements must think Joe Q.Public is a moron! I KNOW if my "favorite ATM"????(like some of them are not my friends...) that I can go elsewhere but it may be a hassle and I may not CHOOSE to do so and may CHOOSE to carry some cash if I so desire. And I choose to manage my time as I see fit, not because someone else thinks that carrying cash is a BAD IDEA FOR ME, please, save the emotion.Robbers and thieves. Lions and tigers and bears, oh,my!! Good grief!

-- Barb (awaltrip@telepath.com), August 23, 1999.

"The funds you leave in a federally insured account are absolutely safe."

Uh-huh. And what happens if you and the bank can't agree on your deposit balance if your records are lost or corrupted? Did you think they were going to take your word for how much you are owed? Geez! How long do you think it will take the bank to resolve your problem...and those of all the other depositors loudly clamoring for their money...or their insurance???

-- Norm Harrold (nharrold@tymewyse.com), August 23, 1999.

I've never had a house fire, I've never been robbed, I've never forgotten where I put my money, and bank's never pay me good enough interest to leave it in the bank. I've never been struck by lightening (had a severe electrical storm here last night, 2,000 lightening strikes and several fires), and I've never been bit by a rattlesnake. It's riskier to have a financial institution that is dependent on computers to handle your money, than it is for you to handle it yourself. I think it's arrogant of banks to treat you like your some kind of imbecile. Just another reason why you should take control of your financial well being.

-- bardou (bardou@baloney.com), August 23, 1999.

Gee Searcher, you forgot to tell us to brush our teeth and comb our hair before we leave the house.

-- Watcher7 (anon@anon.com), August 23, 1999.

I gree with Sircher and my $17.64 is stayin' put in tha bank. I trus him.

-- cashless (cashless@poor.house), August 23, 1999.

You know what did it for me? On a trip to my friendly local bank last Friday, I noticed a white truck with a sign: Specialists in Document Destruction. Now don't these nice bank people have shredders? Why the need for extra personnel and a HUGE truck? And what might happen if Jan. 1st comes and no records are available on computer or hard copy? Think Uncle Sam might consider it his?

-- Gia (laureltree7@hotmail.com), August 23, 1999.

Gary North said on the Art Bell show that the FDIC actually insures the money to the banks, not the customers, and that there's an actual law that states that customer bank records are not considered legal records or legal documents. And that the banks know this and are taking advantage of these unknown loopholes in their exhortations. Folks who heard the show, please correct if we heard this wrong -- it was in the weeeeeee hours and we were mostly asleep.

-- Ashton & Leska in Cascadia (allaha@earthlink.net), August 23, 1999.

Ashton and Leska......I heard the same thing from Gary- taped the show, too. He also said if banks are so positive they are compliant, why do they tell us to keep hard copies of everything!!!!!!

-- Jo Ann (MaJo@Michiana.com), August 23, 1999.

It would be interesting to discover what the bank managers are going to do with their own money. Will they follow their own advice? Will there be a policy pertaining to managers and employees and withdrawl limits...or do they get "first dibs?"

-- Tim (pixmo@pixelquest.com), August 23, 1999.

I suspect that most banks will be compliant enough to keep operating with decent records. (Albeit more slowly than normal?) The bank in my little town still has a lot of people on staff who remember how to do manual ledgers. (and many banks in 3rd world countries have only manual ledgers and never had a computer anyway..) The reason I have taken out some cash and am holding small gold coins is that I don't think most people agree me. I am not worried about bank compliance. I am worried about bank liquidity when everyone decides at once to get their money out.
Berry

-- Berry Picker (BerryPicking@yahoo.com), August 23, 1999.

Man, the original post is a line of crap. Full of vague reassurances, so as to keep the sheep in line, and grazing, er, investing in the stock market.

Sure, keeping money at home is riskier than keeping it in a bank (under normal conditions, not Y2k), but that risk is minimal if you use your brain. NEVER hint or tell anyone that you keep cash around, don't flaunt your money, divide it up into several caches (ones in the house are in fire-resistant boxes), and you'll be ok.

I expect most banks will be operating fine by themselves. What I'm not confident of is the Treasury, the FDIC, the Federal Reserve, and the govt in general.

Anyone who wants to keep their money in the bank is free to do so, but if the bank records are corrupted, and they won't give you your money, I don't want to hear any bitching about it. :)

-- Bill (billclo@msgbox.com), August 24, 1999.

Only an utter fool would trust his money to a bank in 2000. The prudent thing to do is to convert as many assets as possible into cash now, this week, and stash the cash in a safe place, which a bank certainly will not be next January.

-- cody (cody@y2ksurvive.com), August 24, 1999.