Why is storing money in a bank considered safer than storing it in other investment vehicles?

Question

Banks offer a wider array of financial planning services.

Bank accounts are often opened with savings accounts.

Bank deposits are insured by the government.

Banks typically know each of their customers.

Answer 1

This is because bank deposits are insured by the government up to a certain limit, usually up to $250,000 per depositor per bank. This means that even if the bank fails, depositors will not lose their money as it is protected by the government. Additionally, banks are highly regulated and monitored by government authorities, making them a relatively safer option for storing money compared to other investment vehicles that may carry more risk. Furthermore, banks offer easier access to funds, liquidity, and customer service support, which adds to the perceived safety of storing money in a bank.