Is your savings safe?

Is your saving safe?

If you take a look at the news and the recent financial crises, it’s understandable that many people are wondering whether their hard-earned money really is safe in the bank. We have all seen giants in the banking world forced to declare bankruptcy, such as the Lehman Brothers in 2008, and many governments across the world forced to bail out their struggling banks.

But what does this mean for us? Keeping control of all of our own money may seem like a great idea, but storing all of your money in your house is not exactly secure either – no one wants to lose all the money they have in the world in just one unfortunate break-in.

Is my money safe in the bank?

Your money is much safer in the bank than it is in your wallet. If you lose your wallet, no one will compensate you for the lost cash, no matter how much it was. On the other hand, regulated banks in Malaysia are protected under the PIDM (Perbadanan Insurans Deposit Malaysia) scheme, which means that your money will be insured even if your bank does go bankrupt.

What is PIDM?PIDM is a free insurance scheme which offers security to patrons of its member banks, so that even if the bank fails, you won’t lose your money. Check with your bank to see if your money and savings are protected by the scheme, and make sure you look out for the PIDM logo before opening a new account.

How much money is insured under PIDM?

PIDM insures a maximum of RM250,000 per account, so if you have less than that in your bank, you will be completely covered. If you have more in your account – don’t worry! You can simply separate your money into different accounts, and, as long as none of these holds more than RM250,000, then your money will all be protected. Another option is to open a joint account with a trusted family member or friend, as these are also protected up to RM250,000.

What about banks which are not protected by PIDM?

Bank Persatuan, Bank Rakyat and other cooperative banks are not members of the PIDM scheme; but money saved in cooperative banks is guaranteed by the Malaysian Ministry of Finance and the Central Bank. However, the details of this guarantee are not clear, and so it is impossible to say how much money will be protected in each account. So whilst there is some level of protection in place, there is some uncertainty as to exactly how it works.

The advantages of a bank account

Aside from the extra level of financial protection offered by banks, there are also a number of benefits to having a bank account that you can take advantage of. For example, savings accounts give you the chance to earn interest on your savings. If you are careful with your money and choose the right account, this interest could really add up and supplement your income.

Although banks have failed in the past, it is rare that a bank declares bankruptcy and governments often step in to protect failing banks and their customers’ money. Overall, the advantages of bank accounts outweigh the risks of not having one, so just make sure you have the best account possible and that you’re really taking advantage of all the different rewards that come with your account.

Finding a savings account in Malaysia

If you want to find a great savings account, we have the perfect tool for you – why not head to our savings account comparison page where you can compare all the different savings accounts on the market and find an account that best suits you and your money!

- See more at: http://www.comparehero.my/blog/should-you-trust-the-banks-with-your-money/#sthash.rAFwvM7x.dpuf