Why you should never keep all your money in one bank

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Imagine losing your wallet, your credit cards and your checkbook — all at the same time.

It turns out that more and more people are losing access to their money after their bank froze their accounts.

Levi Yisrael is a home rehabber who does a lot of banking to keep his business running. So imagine his shock when he deposited a customer’s check, and his bank alerted him it was freezing his assets until they investigated the deposit.

“They sent me an email saying your account has been recommended for evaluation,” he said.

He said he could not get a straight answer when he contacted the bank.

“It was like someone reading a computer, saying your account has been red-flagged for your protection,” he said.

Yisrael says he used the bank for his business and personal accounts and couldn’t pay for his daughter’s birthday party the next week.

“My daughter’s birthday was April 30,” he said, “and I had no money.”

Spread Money Over At Least Two Institutions

Bankrate.com’s Mark Hamrick says spreading your assets across two or more institutions guarantees access to at least some of your cash if something goes wrong.

“Simply because of the risk of fraud,” he said, “that could be associated with a debit card that then denies access to our checking or savings accounts.”

Recent bank failures are another reason to weigh your options at least.

As for how many banks you should work with or how many accounts to open, Hamrick says there’s no one-size-fits-all answer.

“We just want to have access to our cash,” he said, “and having cash in multiple institutions or more than one is one solution for that.”

MORE: You can get $200 when you open a new Chase Bank checking account

A recent New York Times investigation found more and more banks are freezing accounts if their algorithms flag what appears to be a questionable transaction. We contacted Yisrael’s bank, but did not hear back. His accounts were unfrozen after two weeks.

“My checking. My business. My savings,” he said, “finally were opened.”

But he learned a valuable lesson and won’t use just one bank anymore.

That way you don’t waste your money.

About the Author
John Matarese

John's goal is to help as many TV viewers as possible save money, avoid bad deals, know a rip-off when one comes their way, and be educated consumers. His informative weekly consumer segment "Don't Waste Your Money" now airs on 45 TV stations from San Diego to Tampa to Houston and Cincinnati. More.


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