A bank account is considered the safest place to keep money. However, not everyone has the privilege of having one. Multiple factors, including geographical location, lack of technological knowledge, and account maintenance charges, prevent people from opening one.
Have you ever wondered how to store money without a bank account? There are numerous alternatives to store your money other than traditional bank accounts. If you are seeking an alternative to keep your money safe and secure, you are in the right place.
This detailed guide will discuss the different ways to store your money without a bank account. Moreover, we will highlight factors to be considered when choosing an alternative to a bank account for storing your money.
Why Store Money Without a Bank Account?
Multiple reasons support the fact of not having a bank account for storing money. Here are some reasons for not storing your money in a bank account.
High Maintenance Charges
Banks charge money to maintain accounts. Some banks also have minimum balance requirements, mandating customers to maintain a minimum balance to avoid penalties. Keeping their money in alternative sources allows customers to save on the fees charged by banks.
Privacy Concerns
Digital transactions done by banks are recorded and monitored by them or third parties. Some people don’t want their financial transactions to be monitored. Thus, they opt for alternative ways where anonymity can be maintained.
Accessibility Problems
Not everyone has access to bank accounts. This may be due to a lack of proper identification or secluded geographical areas with minimal bank infrastructure. In such conditions, alternatives like mobile wallets and prepaid cards are prominent and popular.
Lack of Technological Knowledge
Not everyone knows how to use the technology to operate a bank account. The lack of technological knowledge makes it difficult for them to operate their account, and these people are more prone to online scams and fraud. This is why they prefer to deal in cash.
Control Over Funds
If you have kept money in your bank account, you depend on the bank to withdraw money. Often, people face difficulties while withdrawing money using an ATM due to technical glitches. Moreover, there is a daily transaction limit as well.
Secure Ways to Store Money Without a Bank Account
Here is a guide on securely storing your money in places other than traditional bank accounts.
Physical Cash Storage
Physical cash storage is one of the most preferred alternatives to store money. You can keep cash and other valuables in secure storage. You can keep the cash storage at home or other accustomed places.
To add an extra layer of security, keep cash storage in a fireproof and termite-proof place and change the safe combination at regular intervals.
Prepaid Debit Cards
Prepaid debit cards have the majority of the features of bank-issued debit cards. You can easily find prepaid cards at your nearby convenience store. They are easy to use; you just need to load cash into the card, and you are good to go.
However, you must know some prepaid cards charge money for loading funds or have limitations on loading funds, so before purchasing, ensure you check the terms and conditions thoroughly.
Digital Wallets
A digital wallet is another secure place to store your money. These apps or online platforms allow you to do transactions and store valuable documents in digital form. They do not require you to have a bank account.
Digital wallets like Apple Pay or Google Pay also have an option to integrate prepaid cards and gift cards.
Peer-to-Peer Apps
Peer-to-peer payment apps like Venmo and Cash App have gained significant popularity in the market. They are one of the most convenient and easiest ways to store or send money without a bank account.
They allow you to send money directly to your family members’ or friends’ accounts without needing a bank account.
Factors to Consider When Storing Your Money Outside of a Bank
Storing your money outside a bank can be a prudent decision, but it requires correct planning and execution to ensure your money is safe and secure.
Safe and Sound
The first thing you should look for is a safe and secure alternative. Keeping cash at home or in cash storage is vulnerable to theft and damages. So, always use a fireproof place to keep cash storage.
If using alternatives like digital wallets, change your password often and do two-factor authentication for added security. It is best to reveal your storage method to a limited number of people.
Accessibility
If choosing bank alternatives to store money, accessibility is an important parameter to be considered. Choose a method that allows you to access your money when required without any hustle.
Prepaid debit cards and digital wallets are good alternatives as they allow you to spend money without limitations. Moreover, you can keep some reserve in cash for unexpected situations requiring immediate funds.
Inflation
The most significant drawback of choosing different ways to store money besides a bank is that they are not inflation-adjusted. Banks provide interest on your savings, allowing you to cope with inflation.
If you prefer cash for your daily transactional needs, invest some portion of your wealth in gold or bonds. This will help you grow your wealth in the long run. Keeping a balance between cash and assets is the key to resisting inflation.
Convenience
You should know the convenience the methods offer before storing your money. For instance, cash is the most convenient payment method, but there is a limitation on paying for large orders. On the other hand, mobile wallets offer slightly more convenience and can be used to pay for offline or online orders.
Determine how often you need your money and choose the method that offers maximum accessibility and convenience.
Diversification
Keeping all of your money in one alternative is not a prudent decision. When opting for different ways to store money besides bank accounts, ensure you diversify your money storage. Keeping all the money in one place can amplify the risk of theft and disaster.
You can keep a portion in cash with you for daily transactions and a portion in digital wallets for online transactions. Combining physical and digital storage options offers flexibility and convenience and reduces the risk.
Cost-Effective
Various alternatives to bank accounts for storing money have hidden costs. To keep money safe, you need to buy cash storage, whereas prepaid cards have activation and loading charges.
Thus, study every alternative and determine their costs, pros and cons before choosing.
Bottom Line
A bank account is not the only option for storing your money. There are alternatives to it for storing money, including keeping it in cash storage and using prepaid cards or digital wallets. These alternatives to store money keep your money safe and secure.
However, before choosing an alternative, study each option thoroughly, as some options, like digital wallets and prepaid cards, might involve hidden charges. If you store money in a cash safe, ensure the safe is of good quality and kept in a fireproof place for added security.
