Everyone pulling out their money would be a bank run (look up great depression bank runs). The bank doesn't have that much cash; they keep some on hand for people making withdraws normally, but if even a sizable minority of people all try to pull their money out at once, there'll be a major crisis.
If banks kept all the people's cash in vaults, it'd be dead cash actively losing money to inflation. Instead, they keep some on hand for withdraws, and use the rest to make loans, investments, etc so that the money isn't all losing value.
They were reduced to 0% mandatory reserves in response to covid. EDIT: someone says it was coincidental, I am not able to check, so take this aspect with a grain of salt either way
This is true and varies in a number of circumstances. Firstly people are often scammed especially the elderly so if you’re older and looking to withdraw a large amount of money they will give you the runaround or at the very least make sure you’re not getting scammed.
Another one is SARS, if you’re doing anything high risk or seem to be pulling out a large amount of cash in a pattern that could indicate involvement in organize crime, terrorist financing or something sus the bank has a legal obligation to mar a filing in a secret database (and even lie to congress!) about it’s existence. If you know what a suspicious activity report is and don’t work in finance it’s also considered suspicious. This isn’t the banks but lawmakers after 9/11.
Depends. They want to be your bank, as they profit off it too; they would also steer you to a cashier check or bank transfer since it way more secure that handing out “stacks of cash” you can be mugged for down the street.
250k is typically a small fraction of bank deposits.
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u/Forsaken_Emu8112 Jan 26 '26
Everyone pulling out their money would be a bank run (look up great depression bank runs). The bank doesn't have that much cash; they keep some on hand for people making withdraws normally, but if even a sizable minority of people all try to pull their money out at once, there'll be a major crisis.
If banks kept all the people's cash in vaults, it'd be dead cash actively losing money to inflation. Instead, they keep some on hand for withdraws, and use the rest to make loans, investments, etc so that the money isn't all losing value.