Which of the following is a primary disadvantage of not keeping your money in a bank?

• A. You will automatically earn higher interest on your cash.
• B. You are required to pay more taxes on your savings.
• C. Banks will charge you a fee for not depositing your money.
• D. Your money is not protected against theft or loss.

Answer: (D)

Verified step by step guidance

1. Understand the context of the question: The problem is asking about the disadvantages of not keeping your money in a bank. This involves understanding the role of banks in safeguarding money and providing financial services.
2. Review the options provided: Analyze each option to determine its validity. For example, earning higher interest on cash is not automatic when money is kept outside a bank, and banks do not charge fees for not depositing money.
3. Focus on the correct answer: The key disadvantage of not keeping money in a bank is that it is not protected against theft or loss. Banks provide security measures such as insurance (e.g., FDIC in the U.S.) to protect deposits.
4. Consider the implications: Without the protection offered by banks, individuals face risks such as physical theft, misplacement, or loss due to unforeseen circumstances.
5. Conclude the reasoning: The correct answer highlights the importance of banks in safeguarding money, which is a fundamental concept in financial accounting and personal finance.