Let's imagine that your cantankerous hermit Uncle Ray died recently -- and he was way, way more successful at investing in oil futures than anyone knew. Best of all, he's left an eye-crossing, hand-trembling amount of money, all to you.
You'll want to keep this windfall safe and secure, of course; however, $30 billion in $100 bills likely won't fit under your bed. So you decide to put it in a savings account at your local bank. But is there a cap on the amount of cash you can put into a non-interest-bearing savings account?
The answer is that there's no limit on the maximum you can deposit. So rest easy; you won't have to sleep on a very large bed of lumpy money. And you'll sleep better knowing that your fortune is protected in a bank instead of at your own home.
Perhaps a more important and relevant question is this -- just how safe is your money? Many countries insure a variety of bank accounts but only to a limited amount. For example, in the United States, your account is protected by the FDIC (Federal Deposit Insurance Corporation) up to the amount of $250,000, and sometimes more depending on the way you structure your finances [source: FDIC].
In the United Kingdom, your savings are covered at up to 85,000 pounds ($133,000) thanks to the Financial Services Compensation Scheme. A few other European countries, such as Spain, Portugal, Greece, France and Belgium, among others, guarantee deposits up to 100,000 euros ($137,000).
Some countries guarantee insurance on unlimited amounts. Those countries include Australia, Ireland, Slovakia, Germany, Iceland and a few others. Of course, such guarantees are only as strong as the economies of the nation as a whole, so in a time of severe economic turmoil, your money is safest in banks located in the most stable nations.
So if you have so much cash that you literally have no idea what to do with all of it (thanks Uncle Ray!), you can park heaping sums of money in a savings account with no problem at all. Your money will be much more secure than if you hastily picked stocks or mutual funds, and at least a little of that cash will be backed by the government, too.
- Blinder, Alan S. and Hubbard, Glenn R. "Blanket Deposit Insurance is a Bad Idea." Wall Street Journal. Oct. 15, 2008. http://online.wsj.com/article/SB122403056396434697.html
- Federal Deposit Insurance Corporation. "Deposit Insurance FAQ." FDIC.gov. https://www.fdic.gov/edie/fdic_info.html#06
- Federal Deposit Insurance Corporation. "Failed Bank List." FDIC.gov. http://www.fdic.gov/bank/individual/failed/banklist.html
- Hyde, Dan and Lambert, Simon. "Are Irish & Post Office Savings Safe?" Thisismoney.co.uk. Nov. 30, 2010. http://www.thisismoney.co.uk/money/saving/article-1707788/Are-Irish-Post-Office-savings-safe.html
- Lindsey, Lawrence B. "The Conservative Case for Unlimited Deposit Insurance." Weekly Standard. Oct. 1, 2008. http://www.weeklystandard.com/Content/Public/Articles/000/000/015/639uvzyu.asp
- Schich, Sebastian. "Financial Crisis: Deposit Insurance and Related Financial Safety Net Aspects." OECD.org. 2008. http://www.oecd.org/dataoecd/36/48/41894959.pdf