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The Globe and Mail

Should you keep some cash under your mattress?

CBS News reported that in 2009, 8.7% of families in the United States didn't have a bank account. Some of those families do it out of mistrust for their banks but for them, and millions more, putting money under the mattress is routine. More Canadians should consider doing this - although for different reasons.

There's no reason to abandon your financial institution. I'm not recommending it so you can save on bank fees. And when I say "putting money under the mattress," it's figurative. A safe would be a, well, safer choice.

I'm recommending it because having an emergency fund is one thing, but having funds you can access in any emergency is another.

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For most emergencies, like paying a deductible for an insurance claim or travelling to see a sick loved one, tapping into your bank account or credit card isn't a hurdle.

But think about all the various situations in which you wouldn't be able to access cash from an electronic account. You could have your identity stolen or otherwise compromised. There could be a massive power outage or natural disaster. Your financial institution could be temporarily unable to process transactions. Sometimes cash really is king, but only if you can get to it.

And don`t forget cyber terrorism, a real and growing threat that cannot be ignored.

I keep a few hundred dollars in the house but it's by no means my main emergency fund. Your "three months' expenses" or "12 months' income" rainy day fund should absolutely be on deposit with a reputable financial institution. But a small cash reserve to purchase necessities in a true emergency is well worth the foregone interest of putting it in a bank.

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