What happens to my savings if my country defaults or restructures its debt?
In theory, anything can happen, and the world could end tomorrow.  However, with a reasonably sane financial plan you should be able to ride this out. If the government cannot or won't immediately pay its debt in full, the most immediate consequence is that people are going to be unwilling to lend any more money in future, except at very high rates to reflect the high risk of future default.   Presumably the government has got into this state by running a deficit (spending more than they collect in tax) and that is going to have to come to an abrupt end.  That means: higher taxes, public service retrenchments and restrictions of service, perhaps cuts to social benefits, etc. Countries that get into this state typically also have banks that have lent too much money to risky customers.  So you should also expect to see some banks get into trouble, which may mean customers who have money on deposit will have trouble getting it back.  In many cases governments will guarantee deposits, but perhaps only up to a particular ceiling like $100k. It would be very possible to lose everything if you have speculative investments geared by substantial loans.  If you have zero or moderate debt, your net wealth may decrease substantially (50%?) but there should be little prospect of it going to zero. It is possible governments will simply confiscate your property, but I think in a first-world EU country this is fairly unlikely to happen to bank accounts, houses, shares, etc. Typically, a default has led to a fall in the value of the country's currency.  In the eurozone that is more complex because the same currency is used by countries that are doing fairly well, and because there is also turbulence in other major currency regions (JPY, USD and GBP).  In some ways this makes the adjustment harder, because debts can't be inflated down. All of this obviously causes a lot of economic turbulence so you can expect house prices to fall, share prices to gyrate, unemployment to rise.  If you can afford it and come stomach the risk, it may turn out to be a good time to buy assets for the long term.   If you're reasonably young the largest impact on you won't be losing your current savings, but rather the impact on your future job prospects from this adjustment period. You never know, but I don't think the Weimar Republic wheelbarrows-of-banknotes situation is likely to recur; people are at least a bit smarter now and there is an inflation-targeting independent central bank. I think gold can have some room in a portfolio, but now is not the time to make a sudden drastic move into it.  Most middle class people cannot afford to have enough gold to support them for the rest of their life, though they may have enough for a rainy day or to act as a balancing component. So what I would do to cope with this is: be well diversified, be sufficiently conservatively positioned that I would sleep at night, and beyond that just ride it out and try not to worry too much. "The biggest risk you have when a country defaults on its currency is a major devaluation of the currency. Since the EURO is a fiat currency, like almost all developed nations, its ""promise"" comes from the expectation that its union and system will endure. The EURO is a basket of countries and as such could probably handle bailing out countries or possibly letting some default on their sovereign debt without killing the EURO itself. A similar reality happens in the United States with some level of regularity with state and municipal debt being considered riskier than Federal debt (it isn't uncommon for cities to default). The biggest reason the EURO will probably lose a LOT of value initially is if any nation defaults there isn't a track record as to how the EU member body will respond. Will some countries attempt to break out of the EU? If the member countries fracture then the EURO collapses rendering any and all EURO notes useless. It is that political stability that underlies the value of the EURO. If you are seriously concerned about the risk of a falling EURO and its long term stability then you'd do best buying a hedge currency or devising a basket of hedge currencies to diversify risk. Many will recommend you buy Gold or other precious metals, but I think the idea is silly at best. It is not only hard to buy precious metals at a ""fair"" value it is even harder to sell them at a fair value. Whatever currency you hold needs to be able to be used in transactions with ease. Doesn't do you any good having $20K in gold coins and no one willing to buy them (as the seller at the store will usually want currency and not gold coins). If you want to go the easy route you can follow the same line of reasoning Central Banks do. Buy USD and hold it. It is probably the world's safest currency to hold over a long period of time. Current US policy is inflationary so that won't help you gain value, but that depends on how the EU responds to a sovereign debt crisis; if one matures." "The danger to your savings depends on how much sovereign debt your bank is holding.  If the government defaults then the bank - if it is holding a lot of sovereign debt - could be short funds and not able to meet its obligations. I believe default is the best option for the Euro long term but it will be painful in the short term.  Yes, historically governments have shut down banks to prevent people from withdrawing their money in times of crisis.  See Argentina circa 2001 or US during Great Depression.  The government prevented people from withdrawing their money and people could do nothing while their money rapidly lost value. (See the emergency banking act where Title I, Section 4 authorizes the US president:""To make it illegal for a bank to do business during a national emergency (per section 2) without the approval of the President.""  FDR declared a banking holiday four days before the act was approved by Congress.  This documentary on the crisis in Argentina follows a woman as she tries to withdraw her savings from her bank but the government has prevented her from withdrawing her money.) If the printing press is chosen to avoid default then this will allow banks and governments to meet their obligations.  This, however, comes at the cost of a seriously debased euro (i.e. higher prices).  The euro could then soon become a hot potato as everyone tries to get rid of them before the ECB prints more.  The US dollar could meet the same fate. What can you do to avert these risks?  Yes, you could exchange into another currency.  Unfortunately the printing presses of most of the major central banks today are in overdrive.  This may preserve your savings temporarily. I would purchase some gold or silver coins and keep them in your possession.  This isolates you from the banking system and gold and silver have value anywhere you go.  The coins are also portable in case things really start to get interesting.  Attempt to purchase the coins with cash so there is no record of the purchase.  This may not be possible." First question:  Any, probably all, of the above. Second question:  The risk is that the currency will become worth less, or even worthless.  Most will resort to the printing press (inflation) which will tank the currency's purchasing power.  A different currency will have the same problem, but possibly less so than yours.  Real estate is a good deal.  So are eggs, if you were to ask a Weimar Germany farmer.  People will always need food and shelter. "This question is different because you are asking for actual advice vs. a more academic, ""what if"" scenario. The answer that I'll give will be different, and similar to another recent question on a similar vein. Basically, if you're living in a European country that's effectively in default and in need of a bailout, the range of things that can happen is difficult to predict... the fate of countries like Ireland and Greece, whatever the scenario, will be economic and social upheaval. But, this isn't the end of the world either... it's happened before and will happen again. As an individual, you need to start investing defensively in a manner appropriate for your level of wealth. Things to think about: I'd suggest reading ""A Free Nation Deep in Debt: The Financial Roots of Democracy""" My 0,02€ - I probably live in the same country as you. Stop worrying. The Euro zone has a 100.000€ guaranty deposit. So if any bank should fail, that's the amount you'll receive back. This applies to all bank accounts and deposits. Not to any investments. You should not have more than 100.000€ in any bank. So, lucky you, if you have more than that money, divide between a number of banks. As for the Euro, there might be an inflation, but at this moment the USA and China are in a currency battle that 'benefits' the Euro. Meaning you should not invest in dollars or yuan at this time. Look for undervalued currency to invest in as they should rise against the Euro. Best thing to do is convert your money into something that will retain value. Currency is a symbol of wealth, and can be significantly devalued with inflation. Something such as Gold or Silver might not allow you to see huge benefit, but its perhaps the safest bet (gold in particular, as silver is more volatile), as mentioned above, yes you do pay a little above spot price and receive a little below spot when and if you sell, but current projections for both gold and silver suggest that you won't lose money at least. Safe bet. Suggesting it is a bad idea at this time is just silly, and goes against the majority of advisers out there. I am going to add in an opinion here from the Wall Street Journal that I read this morning in What's at Stake in the Greek Vote, in light of current events and elections in Greece. The article claims that if the election results make it sound like a break from the Euro is imminent then ... we will see a full-fledged bank run. Greek banks would collapse ... The market exchange-rate would likely be two or three drachmas to the euro, which would double or triple the Greek price of imported goods within a few days. Prices of assets, including real-estate assets, would crumble. Those who moved their deposits abroad would be able to buy these assets cheaply, leading to a significant, regressive redistribution of Greek wealth. In short, you'd lose two-thirds of your savings unless you were storing them somewhere safe from the conversion. The article also predicts difficulty importing goods (other nations will demand to be paid in euro, not drachma) leading to disruption of trade and various supply shortages.  I will note that the predictions here seem to be in opposition to some other advice here which suggests that real estate will be an effective hedge. Remove your money.  If you do not need this money for some time, you can convert it to Gold, and now is a good time to buy.  Gold is not expected to decrease much in price as we're already at the bottom of the employment cycle and the Depression is already begun and will take about two years to grip the world.
Andrew Lilico has a likely scenario for when Greece defaults on its sovereign debt: What happens when Greece defaults.   Here are a few things: Every bank in Greece will instantly go insolvent. The Greek government will nationalise every bank in Greece. The Greek government will forbid withdrawals from Greek banks. To prevent Greek depositors from rioting on the streets,   Argentina-2002-style (when the   Argentinian president had to flee by   helicopter from the roof of the   presidential palace to evade a mob of   such depositors), the Greek government   will declare a curfew, perhaps even   general martial law. Greece will redenominate all its debts into “New Drachmas” or whatever   it calls the new currency (this is a   classic ploy of countries defaulting) The New Drachma will devalue by some 30-70 per cent (probably around 50 per   cent, though perhaps more),   effectively defaulting 0n 50 per cent   or more of all Greek euro-denominated   debts. As Megan McArdle says, there's more at the link, all depressing. I think you're focusing too much on Greece leaving the euro and not enough on why Greece would leave the euro. Greece would leave the euro precisely so that it could pay back its debt in a new currency worth less than valuable euros. The new currency will devalue, since that's the point of leaving. Along the way the government forces its citizens to take the new currency. The money they have in Greek banks will be converted to the new currency: The citizens don't have a choice to keep their euros. IMHO: The best scenario where Greece does not leave the euro: In this scenario there is probably no risk, because either the ECB will print more money, or other countries will help Greece in some way. The average scenario where Greece leaves the euro: All Bank accounts will be frozen and slowly turned into NEW DRACHMA, and your poor money after the conversion will be worth 50K euro at best (but probably much less). There is also the worst scenario: The bank defaults too, and you will lose everything. Italy has a fund to protect deposits up to 100K euro (I don't know if you have something similar in Greece). However, a similar fund in Greece would be guaranteed by Greek banks and the Greek government, so you might not get much back regardless. Oh, you mean converting your money to that of a country whose public debt is [103% of GDP, instead of the 108% of your own?](http://en.wikipedia.org/wiki/List_of_countries_by_public_debt)  That seems hardly an advancement, even more so considering that the public debt of the Eurozone as a whole is 82.5% of GDP.  Greece is just 2% of the European economy, its default would not mean the collapse of the Euro. In principle, a default will have no effect on your bank account. But if the US's credit rating is downgraded, the knock-on effects might cause some more bank failures, and if the debt ceiling is still in place then the FDIC insurance might not be able to pay out immediately. "But do you know about a US state risking to go default now or in the past? Ultimately, a US state could go into default.  However, I doubt that such a scenario would be allowed to transpire. This seems to happen to California with some regularity.  That is, risking default.  What would happen is not quite well known: ""There is no provision for a state to go bankrupt,"" Kyser said. ""I don't think anyone really knows what will happen or even if the state will go into receivership if it does default. I can tell you this, officials are looking at all the (current) laws."" (source) I believe that the answer to your question is that it could happen, but likely would not be allowed to occur.  The nature of the EU and US are quite different.  The individual states forming the US are not separate nations.  For better or for worse, the US is a stronger federation than the EU. (Something that is lamented at times when the Feds mess with the purview of the locals.)" And then there is the issue of people who actually don't intend to reduce the size of their loan. They only want to pay the interest, so their debt with the bank remains constant. If you are upside down, it means you will not have the financial means to remove the debt. If, for some reason, you are no longer able to pay the bank, you might lose the house. After that you will have no house, but you still have a debt with the bank. The ruble was, is and will be very unstable because of unstable political situation in Russia and the economy strongly dependent of the export of raw resources. What you can do? I assume, you want to minimize risk. The best way to achieve that is to make your savings in some stable currency. Euro and Swiss Franc are currently very stable currencies, so storing your surpluses in them is a very good option if you want to keep your money safe. To prevent political risk, you should keep your money in countries with stable political regime, which are unlikely to 'nationalize' the savings of the citizens in predictable future. As for your existing savings in rubles, it's a hard deal. I assume, as the web developer, you have a plenty of money, which have lost a lot of value. If you convert them to euro or francs, you will preserver the current value (after the loss). You'll safe them agaist ruble falling down, but in case the ruble will return to previous value, you'll loose.  Keeping savings in instable currencies is, however, speculation, like investing in gold etc. So if you can mentally accept the loss and want to sleep good, convert them. You have also option to invest in properties, for example buy an extra appartment. It's a good way to deal with financial surplus in Europe in US, however you should be aware, in Russland it's connected with the political risk. The real estates can be confiscated in any moment by the state and you can't run away with it (the savings can also be confiscated, but there's a fair chance you'll manage to rescue them if you act quickly). Yes, if all my savings were in Euro, I would absolutely be converting everything to US dollars, and possibly some gold.  You probably don't want to sit around with lots of Euros while watching the shit hit fan.  Talk to your bank, possibly they can open a US dollar bank account in your own country for you.  Definitely any bank that has an international presence, like HSBC, should be able to do this for you.  And if not US dollars, British Pounds would also be another option. I mean the current account has four parts - goods trade, services trade, “primary” income (this used to just be investment income) and “secondary” incomes (this used to be just remittance and cash flows, Mexico has a lot of these). By definition, if you have a trade deficit but current account surplus it comes from primary/secondary income.   I’m not sure if it’s crisis mode - a true BoP shock is much more likely to come from having a lot of foreigners owning portfolio assets based on your country (ie Germans owning Spanish bonds sell the bonds, so Spain now has less money for imports). Lol TL:DR. your first point is completely wrong so I stopped at the wall of text. Get over it buddy, you lost the argument. No country simultaniously purchased and sold its own debt, like we have this past several years in the US. So, shut the fuck up already. loser. Its highly unlikely to 'collapse', perhaps there will be  managed defaults, yes, but there is no way they will let it collapse as a global depression would follow.  If the euro collapses it will also bring down most of the global economy including the likes of China and the US (not to mention the Germans) and they are not going to let that happen.  http://www.ft.com/cms/s/0/6cf8ce18-2042-11e1-9878-00144feabdc0.html#axzz1y0lc0hy1  P.s. I am surprised we have not seen more suggestions of buying guns, land and building a commune. The general idea is that if the statement wasn't true there would be an arbitrage opportunity.  You'll probably want to do the math yourself to believe me.  But theoretically you could borrow money in country A at their real interest rate, exchange it, then invest the money in the other country at Country B's interest rate.  Generating a profit without any risk.  There are a lot of assumptions that go along with the statement (like borrowing and lending have the same costs, but I'm sure that is assumed wherever you read that statement.) Government default doesn't mean that all US money is immediately worthless.  First, the bondholders will get stiffed.  Following that, interest rates will shoot up (because the US is a bad credit risk at this point) and the government will monetize its ongoing expenses -- i.e., fire up the printing presses. If you're concerned about not having access to your money, start pulling out a little extra when you get cash at an ATM.  Build it up over time until you have enough currency to weather through whatever emergency you envision with your bank account. Two possible reasons: You can tell which scenario it is based on the credit history they provide you. If you look at the history and they show you your scores for each month, even though you didn't initiate it, then they are auto checking it each month. If the historical dates are only on the dates you clicked on the button, they are only checking when you manually click on it. As for the why they provide it, a few years back it was a desirable feature. Now they all do it just to keep pace with everyone else. Note that most banks only provide a single scoring model from one bureau (but different banks use different bureaus). Resident Alien is liable for the same taxes as a citizen. Citizenship has nothing to do with taxes.