Should I hold my savings in cold hard cash?

Over dinner tonight, my mom told me "I have asked papa to withdraw our savings from the banks to keep at home, I heard it is not safe to keep money in the banks anymore...".

It suddenly dawned upon me that there could be lots more people who may not be as informed about all that is happening amidst the financial turmoil. The Singapore government has over the last week announced that they are putting out $150 Bil to guarantee all bank deposits in full. This is a major contrast to the earlier policy of a minimum guarantee of $20,000 per individual per account.

The coffee shop chatters have intensified. Lots of people have lost faith in the Singapore banks particularly in the wake of the savings of many retirees and other members of public who have seen their hard earned savings wiped out through the collapse of Lehman Brothers Mini Bonds. For many elderly who cannot understand the news (or those whose children are too busy to explain things to them - like me!), they take their cue from the coffee shop chatters. To many Singaporeans, how can big strong banks like DBS, Standard Chartered Bank possibly collapse? They should not, but have we not seen major financial institutions disappear overnight in US?

I am wondering how we could better communicate what members of public need to take note of in this financial crisis? Perhaps, we should target the coffee shops :-)

For me, my parents are now convinced that it is now safe to leave money in the banks. Maybe my father will be an important source of input to his friends at the Ang Mo Kio Coffee shop meeting tomorrow morning.