[dcrazy]

> “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.

[khuey]

Something 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.

[eru]

You 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]

Yep, 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.

[cheschire]

I 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]

T-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]

If 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]

I 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.

[ajross]

> 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]

Yes, 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.

[bellowsgulch]

As a "public service announcement," avoid using Zelle as transactions performed with it are not reversible.

[justinclift]

Safety deposit box as a 2nd backup maybe? ;)

[jsw97]

I 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...)

[justinclift]

Not 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

[triage8004]

Friendly 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.

[Tanoc]

Which is the way it's supposed to work. You keep enough for daily transactions, because the expectation of multiple large scale withdrawals happening either in short succession or simultaneously is the most unlikely scenario to happen during operation. A bank keeps records of every account's value, but at any given time only has enough cash to cover one fifth of all of the money it has on record to be in those accounts. In other words, the bank's physically only got 20% of the money it has on the books. It has to work this way because there's no way a bank could hold all of the money it's customers are said to have, either because of physical space constraints or because there's literally not enough money in existence to cut it out of circulation without creating ridiculous deflation. The change away from the gold standard changed this quite a bit, and so has digital banking, but the numbers in your account are still backed by something that tangibly exists.

[pdonis]

> the numbers in your account are still backed by something that tangibly exists

Only if you consider fiat money that can be printed in arbitrary amounts by Mr. Bernanke's famous printing press to be "something that tangibly exists".

[Tanoc]

Well there's also assets. The bank can hold the value of land deeds or house loans for example. The house and the land it's on are tangible things that can be evaluated. Though I suppose that's a degree removed from printed bills or minted coinage.

[pdonis]

> I suppose that's a degree removed from printed bills or minted coinage

Yes, because the "value" of those assets is just a guess until you try to sell them. It might be a highly educated guess, but it's still a guess. And the time the bank would need to sell them--because it needs more cash due to an unusually high demand for cash withdrawals--is precisely the time that your educated guesses all go out the window: you're selling not because you're making a trade to improve your rate of return, but because you need cash, now, and buyers will know that and will gouge you on the price.

[SR2Z]

Despite that, USD seems to hold its value pretty well. Certainly a lot better than many other "stores of value."

[pdonis]

> USD seems to hold its value pretty well.

The Consumer Price Index has inflated by a factor of more than 15 from January 1947 through March 2026 [1]. That's an annual rate of inflation of about 3.45 percent. That's an indication of how the USD does not hold its value--if you have a stock of dollars that you want to hold the same buying power year to year, you have to add 3.45 percent to it every year just to stay even.

[1] https://fred.stlouisfed.org/series/CPIAUCSL

[SR2Z]

Ok, great. Now list something what that's actually held its value.

A nice, mostly-even 3% a year is spectacular. Gold can't do that. Bitcoin can't do that. Only a central bank can do that.

[eru]

Why would that be necessary? For most people, liquid funds are something that's electronic anyway, and in most countries banks can't run out of customers' electronic money. (Safeguards kick in pretty quickly.)

Most of the talk in this discussion is about personal emergencies, like being locked out of your accounts; not about system-wide bank collapses.

[mothballed]

You can be locked out of all your accounts simultaneously by a court order, for one.

There is no one reliable place. You must hedge with diverse custodial and non custodial forms of store of value for best assurance.

[eru]

Hedging with friends and families is probably a good idea.

[gucci-on-fleek]

> 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_Ban...

[vitus]

Indeed; 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.

[Teever]

It sure isn’t the 1920s, it’s the 2020s so things like digital money are ephemeral and whimsical.

The bigger question is how much food and medicine is there in the supply chain buffers? If all production was to stop immediately — how many calories are on the continent? How many grams of insulin or penicillin?

In a crisis how will those things be distributed? Will it be based on immediate need or social class?

What’s keeping the system going anyways? Why do ships continue to come with consumer goods from China? Why do farmers send their grain to market?

It’s kind of neat to think about what will happen in this sort of scenario. I wonder how long the data centres will keep running, churning out models that don’t have a market an aren’t quite good enough for AGI.

[eru]

Alas, for Silicon Valley Bank they went with 'too big to fail' and also covered uninsured deposits. That's moral hazard and endangers the core purpose of the insurance.

[vitus]

Agreed. That said, FDIC would have not been able to cover all $150 billion or so of uninsured SVB deposits directly from the insurance fund, so had that been the only available option for making depositors whole, then FDIC would have had to pass.

[eru]

Well, insurance should only covered insured deposits.

> [...] so had that been the only available option for making depositors whole, [...]

On paper, FDIC might be independent and have its own balance sheets. But in practice and given politics, FDIC itself can't fail / isn't allowed to fail. It'll always be bailed out, and that's what the market expects.

For the stability of the economy, it would have been better not to make uninsured depositors whole.

[the__alchemist]

What do you recommend instead?

[dullcrisp]

Mayonnaise jar buried in the backyard.

[the__alchemist]

Do 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?

[earnesti]

What about bitcoin