My friend had $150k in his bank account that was taken by the IRS while they were still in negotiations on a huge tax bill. No notification, no nothing. He only found out after he was trying to buy groceries and his card was declined.

After it was all said and done he ended up owing the IRS ~$14k and they gave him a check for the difference, but it took months to get it all sorted out.

I lent him some money to get him through it, but what if he didn't have a friend to do that? He'd be kicked out of his apartment and starving.

Now he doesn't trust banks (not that it's the necessarily the banks fault). He keeps around a thousand in his bank for emergencies, and keeps the rest in cash (at an undisclosed location :)).

It goes to show that even people with a reasonable amount of money have reasons to keep their money out of banks.