4 ms·
> Do you hold deposits for others that they can withdraw at any moment? Yes you do actually. There are many withdrawal events such as taxes, medical expenses,
by Sargos 4y ago
> Do you hold deposits for others that they can withdraw at any moment?
Yes you do actually. There are many withdrawal events such as taxes, medical expenses, vehicle repair, and others that you need to provide liquidity for in short notice. If your funds are locked into treasuries or other assets that have a low current value relative to their final worth like SVB then you will have to sell them at a loss which might ruin you financially. Unfortunately there's no FDIC for individuals.
- WJW 4y ago> there's no FDIC for individuals. Yes there is, it is called "insurance" and is readily available from a variety of providers. It is meant precisely to turn unexpected high cost expenses into more predictable expenses over time.
- anotherman554 4y ago"If your funds are locked into treasuries or other assets that have a low current value relative..." That's why it's a good idea to pay attention to the term of the bond. You can buy short term treasury funds with yield to maturity of around 30 days. These aren't capable of having low current value compared to final worth. You can also save a little extra money and be capable of taking the risk of a longer term.