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10 overnight deposit accounts at ten different banks.
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@Solitair Thanks, but that’s been thought through and deemed too risky.
1. Legally speaking, a money market account is a loan to the bank. If the bank goes bankrupt, your deposit is gone for the time being, and no one knows what happens next.
2. As far as I know, deposit insurance applies per person, not per account. At the very least, that’s unclear, and in a full-blown banking crisis, the system will simply switch to a per-person basis. Then everything over 100k is gone, just like in Cyprus a few years ago. And in our society, in the event of a crisis, no one gives a damn about people who’ve lost everything over 100k.
There needs to be more security here—significantly more security!
1. Legally speaking, a money market account is a loan to the bank. If the bank goes bankrupt, your deposit is gone for the time being, and no one knows what happens next.
2. As far as I know, deposit insurance applies per person, not per account. At the very least, that’s unclear, and in a full-blown banking crisis, the system will simply switch to a per-person basis. Then everything over 100k is gone, just like in Cyprus a few years ago. And in our society, in the event of a crisis, no one gives a damn about people who’ve lost everything over 100k.
There needs to be more security here—significantly more security!
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@Epi Second: Deposit insurance applies per bank. That means if you have three accounts at the same bank, you’re only protected up to a total of €100,000; however, if you have accounts at three different banks, you’re protected up to three times that amount—€300,000.
I don’t see what’s controversial about that—it’s regulated by the Deposit Guarantee Act.
First: what happens then is second.
You could also spread your money across savings banks and cooperative banks; as far as I know, they have their own separate guarantee systems that provide additional protection.
I don’t think you’ll find “much more” security than that.
Maybe use some of it to buy canned food in case the Russians invade or something like that.
I don’t see what’s controversial about that—it’s regulated by the Deposit Guarantee Act.
First: what happens then is second.
You could also spread your money across savings banks and cooperative banks; as far as I know, they have their own separate guarantee systems that provide additional protection.
I don’t think you’ll find “much more” security than that.
Maybe use some of it to buy canned food in case the Russians invade or something like that.
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@Solitair Let’s assume the law isn’t amended on an ad hoc basis—which I think is likely—and that the deposit insurance remains per bank, not per person.
How much money is actually in the deposit insurance fund? €6 billion? That would barely be enough to compensate maybe 1% of all Commerzbank customers. And then what? Then the chaos begins.
So: why do you think the deposit insurance is safer than a short-term German government bond? I think that in the event of a crisis, the bonds will be paid off first, and then any bank accounts will be compensated.
How much money is actually in the deposit insurance fund? €6 billion? That would barely be enough to compensate maybe 1% of all Commerzbank customers. And then what? Then the chaos begins.
So: why do you think the deposit insurance is safer than a short-term German government bond? I think that in the event of a crisis, the bonds will be paid off first, and then any bank accounts will be compensated.
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@Epi I consider this sequence to be speculative. In the event of a full-blown crisis, there will be a haircut, and it is unclear how it will be weighted.
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@Epi I also think I read somewhere that, in case of doubt, the limit is 100k per person.
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But seriously. Do your parents expect society to completely collapse in the next 5–10 years? If so, I'm afraid even money invested safely won't do them any good.
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@Wealth-Accelerator Kommer points out that it applies per person—or could apply, I think.
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@Applesplit I don't think this is a matter of personal expectations. Rather, it's about weighing all the relevant factors as objectively as possible.
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