Two Letters Re: A Bank Run Reality Check

Dear Mr. Rawles,

While the quantity of FRN currency and coins on hand at a bank branch certainly makes or breaks one’s ability to withdraw one’s funds in a “run” situation, the overriding factor of which most depositors are completely unaware is that only checking accounts are “demand” accounts, meaning that you have a legal and immediate right to all of your money when you demand it. If you read the account disclosure fine print for your certificate of deposit (CD) or savings account, you will find that the bank is under no obligation to return your money when you ask for it, but only within the number of days specified in the account agreement (contract).

In practice a good bank will make every effort to return your funds when you request them, but in the case of a bank run or other situation that leaves them short of cash or even actual funds, the provision buys them with the time to acquire what they need to repay you from another bank or ultimately from the Federal Reserve.

So if you are concerned about being able to get your money out of the bank in a pinch, you need to keep it in a checking account. In that case even if your bank lacks the cash to honor your check you at least have the alternative of trying to cash it somewhere else. Above all, stay vigilant: Better to be a month too early than a day too late. Cheers, – Kevin W.


One of the best plans is to have money stored at your home, retreat, vehicle. Understandably not everyone is in a position to do this but something is better than nothing. I would recommend 100 of each of the bills. 100 x $1 ($100) 100 x $5 ($500) 100 x $10 ($1,000) 1000 x $20 ($2,000) plus $200 in coins. This creates a total of $3,800. This may seem a significant amount however WSHTF this frees up valuable time to get on the highways, escape the city and head to wherever it is you have planned. You won’t have to try and get money from the bank or have to worry about paying increased gas prices along the way and it may help bribe your way through a road block. Just think what it is going to be like with millions of people across the country/world trying to get access to their money. The banks will simply close up and ration the amount you can have, if any at all.   – L.H.