The website for the Federal Deposit Insurance Corporation states that "no depositor has ever lost a penny of insured deposits since the FDIC was created in 1933". This covers $250,000 per account and applies to both the initial principal and any interest earned. Still, mistrust toward banks and financial institutions in general has caused a number of more fearful individuals to seek alternative avenues to park their capital. Others may simply be avoiding the banks on principal, given the banks' roles in contributing to the reckless lending that led up to the bursting of the housing bubble and the Great Recession. Fortunately, if you fall under this skeptical category, below are five options on where to keep your money if you no longer trust the banks.

SEE: Is The Housing Bubble Over?

Precious Metals
Under a doomsday scenario where financial markets cease to function, holding physical gold, silver and other metals such as platinum or copper would definitely hold some value. The realities of having to return to a barter system with physical goods are likely minimal, but it may make sense to hold a certain percentage of your assets in this form. For the peace of mind, there is also the potential for them to appreciate in value.

Uncle Sam
It's good to learn about the Treasury and the Federal Reserve, especially since they would be more than happy to take your funds and issue a security to you in return. A U.S. government security still qualifies in most textbooks as a risk-free security, or as close as one can get to holding an asset that has minimal risk of not being returned on maturity. The only problem is that many individuals and institutions already have this idea and have bid interest rates to minuscule levels. A 10-Year Treasury Note's yield is currently around 1.50% to qualify as one of the lowest ever.

Other Real Assets
Metals form the basis for a currency and have been used in coins historically as a way to literally prove their worth. Other physical assets may have less certain values, but are certainly also something that can be touched and seen, as opposed to a bank account statement that could be hard to collect on if the respective financial institution ceases to exist. These hard assets include fine art, cars, watches and other jewelry, and just about anything that qualifies as a collectible.

SEE: 6 Major Collectibles Payoffs

Under Your Mattress
Although there are always new rules for safe investing, and hiding your cash and assets under your mattress has become cliché, it is still one of the most verifiable ways to ensure it can be found and used if necessary. Of course, the need to be creative on where to hide your assets (such as in a safe deposit box) is important, as is keeping a mental or physical record of where they are located. Again, this method qualifies as a doomsday scenario and should likely not be relied on for large amounts, but the peace of mind can again be helpful, especially in times of a short-term liquidity crunch.

In a Business
This category is also general, but buying a business can ensure a return on your investment, provided the business generates a profit. Buying a farm and owning farmland qualifies as it can produce a return. Plus, it fits a paranoid mindset as the land can produce food in the off case of a global calamity or melt down of the global financial system.

SEE: How To Calculate Your Investment Return

The Bottom Line
The financial industry is looked upon with suspicion these days. Some of the scorn is warranted, especially where greed was excessive or innocent homeowners were forced to move out. There is also always the risk that technology fails and bank account information becomes unverifiable. For the especially wary, the above alternatives to a traditional bank may make sense for at least a percentage of your net worth.

Related Articles
  1. Term

    How Time Deposits Work

    A time deposit is an interest-bearing bank deposit that has a specific maturity date.
  2. Term

    Who Benefits from Microfinance?

    Microfinance describes banking services provided to low-income people or groups. Specific services offered by microfinance institutions include microloans, micro-savings and micro-insurance products.
  3. Bonds & Fixed Income

    5 Fixed Income Plays After the Fed Rate Increase

    Learn about various ways that you can adjust a fixed income investment portfolio to mitigate the potential negative effect of rising interest rates.
  4. Term

    Understanding Treasury Yield

    Treasury yield refers to the return on an investment in a U.S. government debt obligation, such as a bill, note or bond.
  5. Stock Analysis

    3 Popular Financials Stocks in 2015 (WFC, COF)

    Find out about some of the popular financials stocks in 2015, why they have become popular and whether they will remain popular going forward.
  6. Retirement

    Is Bank of America Stock Suitable for Your IRA or Roth IRA? (BAC)

    Learn why Bank of America's established track record and long-term stability make it more suitable for a traditional IRA than for a Roth IRA.
  7. Stock Analysis

    Bank of America's 3 Key Financial Ratios (BAC)

    Discover some of the key financial ratios that show the quality of Bank of America's loan portfolio and how profitable the bank has been.
  8. Stock Analysis

    Wells Fargo's 3 Key Financial Ratios (WFC)

    Look at some of most important financial ratios for with Wells Fargo & Co. and understand why they are so important for analyzing the bank's core business.
  9. Economics

    What's a Non-Banking Financial Company?

    A non-banking financial company, or NBFC, does not hold a banking license, yet it still provides many banking services.
  10. Bonds & Fixed Income

    Explaining Government Bonds

    A government bond is a debt security a government issues.
RELATED FAQS
  1. Are 401ks FDIC insured?

    The Federal Deposit Insurance Corporation (FDIC) works as a protector for customers when banks and financial institutions ... Read Full Answer >>
  2. Does the FDIC cover identity theft?

    When a third party gains access to your bank account and conducts transactions without your consent, the FDIC does not have ... Read Full Answer >>
  3. Does the FDIC cover credit unions?

    The Federal Deposit Insurance Corporation (FDIC) does not cover credit unions. The FDIC only insures deposits in banks and ... Read Full Answer >>
  4. Does the FDIC cover business accounts?

    Bank deposits owned by corporations, partnerships, limited liability companies (LLCs), and unincorporated associations, including ... Read Full Answer >>
  5. How long does a stock account have to be dormant before it can be escheated?

    A stock account is typically considered dormant and eligible for escheatment after five years of inactivity; however, this ... Read Full Answer >>
  6. Are variable annuities FDIC insured?

    Variable annuities are not insured by the Federal Deposit Insurance Corporation (FDIC), which regulates only bank products. ... Read Full Answer >>
Trading Center