Is it risky to have more than 100,000 euros in a bank? Risk analysis and alternatives

Life has been compared to all sorts of obstacles, even beautiful things like a box of chocolates. However, when it comes to comparing, everyone agrees on one point, which is that life can be a path full of surprises and all kinds of unforeseen events. Some may simply be human errors, while others can be a tough hit to the wallet.

With this idea in mind, many people focus on emergency funds, those savings always at hand to turn to when the situation requires it. However, have you ever thought about what the limit should be to keep accumulated in the bank to ensure it is completely secure?

Holding large amounts of money in a single bank not only causes concern, but amounts like 100,000 euros can become a problem. While it may seem like a round number when thought about objectively, there are risks for your savings. In this article, we will consider ways to protect your capital as well as analyze risks and alternatives to diversify your money efficiently.

Why is 100,000 euros the limit of the Deposit Guarantee Fund?

The Deposit Guarantee Fund (FGD) is a mechanism created to protect clients' deposits in case of bank insolvency. In Spain, this fund covers up to 100,000 euros per holder and banking entity. This means that if you have less than that amount in a bank, your savings are guaranteed by the FGD in case the entity fails.

But what happens if this amount is exceeded? Any amount exceeding 100,000 euros falls outside the protection. That is, if you have 140,000 euros saved in a single bank and it fails, 40,000 euros would be lost. It is for this reason that many people wonder if it is really safe to have more than 100,000 euros saved in a single bank.

Risks of having more than 100,000 euros in a single bank

When evaluating the main risks to savings, we find bank insolvency. Although it is uncommon for a bank to fail, it is not impossible. A demonstration of this can be found in the 2008 financial crisis, which showed that even the largest financial institutions can face serious problems.

With this in mind, you must take into account that if your financial entity declares bankruptcy and your savings exceed the FGD limit, you could face a significant loss of your money.

On the other hand, keeping a large amount of money in a single entity means you are not diversifying risks. Here we must point out that diversification is the first key to any financial strategy as it prevents you from relying solely on a single source of financial security.

Alternatives to having all your savings in a single bank

If your savings exceed 100,000 euros in a single bank account, it is advisable to explore alternatives that allow for diversification and risk reduction. Some of the most common options that can serve as efficient alternatives are:

• Holding accounts in different banks - Dividing your savings among various financial institutions ensures that your money is independently covered. Spread your money across different banks without exceeding 100,000 euros per entity to ensure they are covered by the FGD.
• Financial products like investment funds or bonds - Although not guaranteed by the FGD, these offer opportunities for higher returns and greater diversification. Fixed income, variable income funds, or government bonds can be a safe alternative depending on your risk profile.
• Crowdlending - Making investments on platforms like Inversa is another way to diversify your savings. With crowdlending, you can finance business projects, helping you achieve higher returns than a traditional bank account while also diversifying risk by investing in multiple projects at once.

Advantages and disadvantages of diversifying savings

After evaluating the risks, it is time to understand the benefits of diversifying savings. The main advantage is security since diversifying savings reduces the risk of losing money in the event of a bank failure. Furthermore, you can benefit from different products that offer higher returns compared to traditional bank accounts, where interest rates are usually low.

However, keep in mind that this may also mean lower liquidity. Some products, such as bonds, may have longer investment periods, limiting the availability of immediate capital.

Crowdlending as a safe investment alternative

Crowdlending becomes one of the most popular alternatives when it comes to diversifying savings and improving money yields. Through platforms like Inversa, you can invest in loans to small and medium-sized enterprises (SMEs) and obtain a more attractive return than traditional savings accounts.

Another interesting aspect of crowdlending is that it allows you to diversify investments across different projects, thus helping manage risk. Unlike putting all your money in a single bank, crowdlending allows you to distribute small amounts across multiple projects, minimizing the impact if one of them does not generate the expected returns.

It is worth noting that the profitability of crowdlending is usually higher than that offered by bank deposits, helping increase your passive income.

The importance of managing the risk of your savings

Having more than 100,000 euros in a single bank, as shown in the previous points, can be a source of concern due to the limits of the Deposit Guarantee Fund (FGD) and the risks associated with bank insolvency. Therefore, it is important to diversify savings among several entities or financial products since this strategy can minimize risks and maximize returns.

What is essential is to assess your financial situation, investment goals, and risk profile. With options like Inversa, you can explore new ways to invest safely while optimizing the yield on your money.