For many their first instinct would be the bank. Unfortunately, due to financial regulations all financial advisers and insurance professionals still must go on record as stating that the bank is the safer place due to the FDIC.
Let me phrase that in a different way, the bank is safer because the U.S. Congress established an independent agency called the Federal Deposit INSURANCE company!
You may need to decide for yourself which is more reliable, so here are a couple of additional point to consider where you’re safer investing your money.
According to www.FDIC.Gov, the number of banks that have failed since October 1st, 2000 is 540. According to the National Organization of Life & Health Insurance Guaranty Associations, the number of insurance companies that have fallen into receivership since 2000 is 29. When an insurance company’s reserves fall too low the state comes in and liquidates the company. They then attempt to transfer the policies to stable companies. If they cannot transfer the policies the State Guarantee Fund takes over the Life and Annuity policies. Another point to consider is, according to federal bankruptcy law insurance companies cannot declare bankruptcy.
Just to be clear, I’m not saying that money in the bank isn’t safe or they don’t serve different financial purposes. I just want to offer a little different perspective.