Gil Woolley wrote:
My downloads folder is 360 MB and includes vital banking information. Is it safe to move that to iCloud? Which types of files should I move to the cloud?
Do you have some sort of backup for this computer? Apple provides free backup software with macOS called Time Machine, but there are also third party options as well.
Back up your Mac with Time Machine - Apple Support
If you don't have a backup, then before you do anything else, you should make sure to have a good backup on some local storage media. As others have mentioned iCloud and other file syncing cloud services are not a backup. Why? If you make a catastrophic file edit or deletion, then every copy of that file is affected on every other device which is using that cloud file syncing service. Not really a backup is it?
FYI, there are a lot more new ways to permanently losing access to the data stored on the internal SSD of the recent Macs due to all of the hardware, software, and security changes. Without good backups (frequent & regular, with at least two backup copies) sooner or later you will end up losing some or all of your important files.
People should always have frequent and regular backups of their computer and all external media (including the cloud) which contains important & unique data.