Banks require us to give them large amounts of trust. We deposit our money. They lend that money out, while the general public is under the impression that you deposit money and it stays there. The bank's very business model relies on all of their depositors not needing/withdrawing their money at the same time; should everyone happen to need/withdraw their money at the same time, the bank would fail. Fractional reserve banking at its finest.
A lot of people don't earn enough money to care. Just as most people don't understand how their TV, smartphone or kidney works they don't need to know how the banking industry works.
Government puts the deposit guarantee at 250k. That covers the vast majority of society and prevents riots in the streets.
>the general public is under the impression that you deposit money and it stays there
After decades of reruns and annual 24-hour marathons of "It's a Wonderful Life" I don't think the general public is unaware of this very basic aspect of the banking industry. I knew by the time I was 8 that the money was in Joe's house etc., and I didn't grow up in a household that had any particular knowledge of the banking & finance industry.
If you asked most people "Do banks keep all of the money everyone deposits in one big vault, or a bunch of little vaults, all of the time?" I think most people would at least have some vague notion that the answer is "Um, No?"
You don't have to trust the bank, as long as the bank is a FDIC member and you're not depositing personal business amounts of money you only need to trust the government to keep your deposit safe.
