Hacker News Reader

Comment by downrightmike | Hacker News Reader

Why wait for something to get given back when you can take it back right now? Dealing with insurance is always a bitch, especially if they have to pay. They'll drag it out years.

View on HN

The entire point of FDIC and similar insurances is to make insured funds available within days.

If depositors could/had to wait years, there wouldn‘t be a need for insurance anymore in this case.

If it were your hard-earned money saved up over the course of years or decades, would you risk seeing if the theory works in practice?

It's not clear what was meant by "other banks" above. If "other banks" means a large percentage of all of them, the FDIC doesn't have the cash on hand. Sure there may be appropriations from somewhere else, but that could take awhile.

I think the point still stands: why keep your money in a bank known to be insolvent? What is the upside? Especially if you already have an account at a bigger bank.

Not a lot of upside, but on the other hand you don't have to deal with all the hassle to switch banks. Even as a private person, I don't relish the idea of switching my bank. I have quite a number of autopayments set up. My salary also goes automatically in my bank account. If I switch it would take me days to set up everything again. I imagine a small/medium company would go through this, but times 100. If you are short on manpower (and who isn't nowadays?), then you have better things to do.

For the same reason people went to SVB in the first place: better deals. JP Morgan won't give you the same below-market home-financing deals in return for you working with them exclusively at your startup.

The upside is that the bank you keep your money in doesn’t go out of business. Why keep your money there in the first place if you don’t get some kind of service you like from the bank?

I feel the exact opposite as you. Now that essentially 100% of deposits are guaranteed indefinitely, there is only downside to withdrawing.

Reply on news.ycombinator.com