I’ve divided our funds between two banks, and I’m thinking about adding a third. We pay almost everything via cash-back credit cards, which I pay in full every month. Lately I’ve been paying them off every week or two, just to keep the balances low. We have no other debt, which I think is really important right now. Being “Boomers” we have the advantage of having been raised by parents who grew up during the Great Depression. The frugality they instilled has kept us living a bit below our means, which hopefully will help hen the inevitable crash happens.
Once upon a time there were bank deposit reserve requirements that ranged from 12 to upwards of 15 percent. That was fifty years ago.
Here's the latest from the Federal Register:
Effective March 26, 2020, the [Federal Reserve] Board reduced reserve requirement ratios on all net transaction accounts to zero percent, eliminating reserve requirements for all depository institutions. The annual indexation of the reserve requirement exemption amount and the low reserve tranche for 2023 is required by statute but will not affect depository institutions' reserve requirements, which will remain zero.
Now doesn't that just give you a "warm and fuzzy"? That announcement slipped through with very little fanfare. BTW, SVB had reserves of roughly 3 percent when it went down.
I’ve divided our funds between two banks, and I’m thinking about adding a third. We pay almost everything via cash-back credit cards, which I pay in full every month. Lately I’ve been paying them off every week or two, just to keep the balances low. We have no other debt, which I think is really important right now. Being “Boomers” we have the advantage of having been raised by parents who grew up during the Great Depression. The frugality they instilled has kept us living a bit below our means, which hopefully will help hen the inevitable crash happens.
Once upon a time there were bank deposit reserve requirements that ranged from 12 to upwards of 15 percent. That was fifty years ago.
Here's the latest from the Federal Register:
Effective March 26, 2020, the [Federal Reserve] Board reduced reserve requirement ratios on all net transaction accounts to zero percent, eliminating reserve requirements for all depository institutions. The annual indexation of the reserve requirement exemption amount and the low reserve tranche for 2023 is required by statute but will not affect depository institutions' reserve requirements, which will remain zero.
https://www.federalregister.gov/documents/2022/12/01/2022-26065/reserve-requirements-of-depository-institutions
Now doesn't that just give you a "warm and fuzzy"? That announcement slipped through with very little fanfare. BTW, SVB had reserves of roughly 3 percent when it went down.