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> “There was no warning that I would not be able to access my accounts for five days,” she added. “If I had to use that money, it was completely inaccessible.”
by dcrazy 6mo ago
> “There was no warning that I would not be able to access my accounts for five days,” she added. “If I had to use that money, it was completely inaccessible.”
A good reminder that your emergency fund should be held in cash at a bank, not in shares a brokerage. Not that a glitch like this couldn’t block access to your bank account too, but rather that the process of liquidating and transferring securities is much slower than ACH or Zelle.
- justinclift 6mo agoSafety deposit box as a 2nd backup maybe? ;)
- jsw97 6mo agoI know you're joking, but safety deposit boxes aren't nearly as safe as you think they are. (https://www.nytimes.com/2019/07/19/business/safe-deposit-box-theft.html https://www.nytimes.com/2019/07/19/business/safe-deposit-box...)
- justinclift 6mo agoNot totally joking after some thought. If the problem that a person experienced is "complete loss of bank account" then having a physical backup - not at a bank! - would help to cater to that scenario. And yeah, looks like that's not a foolproof solution either. 3rd backup option might be needed... :D
- khuey 6mo agoSomething like Fidelity's Cash Management Account (has a debit card, automatically liquidates money market funds to cover spending) works fine as an emergency fund. But you need your emergency fund in two separate accounts at two different financial institutions to be safe from shenanigans like this. This is not merely a theoretical risk. Patelco (a Bay Area credit union with half a million members) got hit with ransomware back in 2024 that disrupted banking services for two weeks.
- Scoundreller 6mo ago[dead]
- eru 6mo agoYou can have multiple accounts, yes; but you can also diversify via friends and family. As a good friend, if I know that you are good for the money, I'd happily spot you even a few tens of thousands for a few days or weeks. (I'm actually more reluctant to do that with some family members, because I might be less likely to get the money back.)
- suuhhhhg 6mo agoYep, another reminder that community is what makes you resilient. Not to say you shouldn’t personally prepare, but building up your community is preparation. It’s not only about stockpiling for yourself.
- triage8004 6mo agoFriendly reminder that banks are not a reliable place to keep emergency funds, they don't really have a vault full of everyone's cash always available.
- the__alchemist 6mo agoWhat do you recommend instead?
- dullcrisp 6mo agoMayonnaise jar buried in the backyard.
- the__alchemist 6mo agoDo I have to clean out the mayo first? I am wondering if it will fester, or if most of the smelly decomposing microbes are aerobic? Are we talking paper money? A bitcoin wallet? Trump dollar coins?
- gucci-on-fleek 6mo ago> they don't really have a vault full of everyone's cash always available. When the Silicon Valley Bank collapsed, funds were only inaccessible for 72 hours, and no depositors lost any money [0]. Which is still not ideal, but most people will never experience a bank collapse, and there are plenty of banking activities that will take longer than 72 hours to process in regular circumstances anyways. [0]: https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Bank https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...
- vitus 6mo agoIndeed; most personal banking customers can fall back on FDIC insurance ($250k should be more than enough to cover your emergency fund). This isn't the 1920s.
- 6mo ago
- ajross 6mo ago> the process of liquidating and transferring securities is much slower than ACH or Zelle. That doesn't seem relevant here. The account disappeared due to a data maintenance error; it wasn't extracted via a legitimate transfer to another account, they literally forgot about it.
- dcrazy 6mo agoYes, that is why I caveated my comment. But her quote is still a good reason to point out that if there is a chance you might need access to money within short notice (I’d say within a month), it should be in a checking or savings account.
- cheschire 6mo agoI find a T-bill ladder works best for me. I keep half my emergency savings in 4 week bills. Given that my emergency savings is intended to sustain me for months, I can easily access the back half of my savings over the course of 4 weeks as each bill expires, returning another 12.5% of my emergency savings to me. And in a worst case scenario where I can’t access the front half of my savings due to a bank run or other failure, I am only a week or so away from getting access to some part of my savings.
- smallnamespace 6mo agoT-bills are highly liquid. You can sell them before they mature for very low transaction cost and get back their true market value, including the accrued interest, meaning there’s not much monetary benefit to staggering them week by week. You could just as well only roll them once a month and dip in freely if you need the cash.
- SpicyLemonZest 6mo agoIf you have the capability and discipline to perform a T-bill ladder, you've gotta understand that you're not the person who general financial advice is targeted to. Being deliberately vague, but I've lost nontrivial amounts of money simply because I got distracted when doing a critical financial task and only remembered to get back to it months later. I think I can safely speculate that the story in the source article would never happen to you because you could easily locate the right account numbers if you found yourself locked out of a financial webapp.
- cheschire 6mo agoI appreciate the vote of confidence but to be clear I just set it up on auto-reinvest for 24 months. There’s an initial setup every two years but the rest is mindless. Maybe you’re right though. I maintain a non-trivial amount of data in my password manager to ensure I always have a centralized place to begin the hunt for information.
- bellowsgulch 6mo agoAs a "public service announcement," avoid using Zelle as transactions performed with it are not reversible.
- earnesti 6mo agoWhat about bitcoin