Is my money safe? What you need to know about bank failures

NEW YORK (AP) – The recent failures of Silicon Valley Bank and Signature Bankthat catered mostly to the tech industry, maybe you are worried about your money. They were the second and third largest bank failures in US history.

It all started last week when several depositors tried to withdraw their money from the Silicon Valley bank. in Santa Clara, California. This is known as a bank run.

The bank had to sell Treasury bonds and other securities at heavy losses and more people tried to withdraw money as the situation spread, causing the bank to fail., Regulators took control of New York-based Signature Bank Soon after, it was necessary to defend depositors, saying that too many people had withdrawn.

In response, regulators guaranteed all deposits. In the two banks and created a program to help protect other banks from a run on deposits.

Here’s what you need to know:

Is my money safe?

Yes, if your money is in a bank insured by the Federal Deposit Insurance Corp. And you have less than $250,000 in there. If the bank fails, you will get your money back.

Almost all banks are FDIC insured. You can see the FDIC logo on a bank teller window or at the entrance to your bank branch.

Credit unions are insured by the National Credit Union Administration.,

If you have more than $250,000 in a personal account, which most people don’t, any amount over $250,000 is considered uninsured and experts recommend that you move the rest of your money to a different financial institution. Go, said Caleb Silver, Editor-in-Chief of Investopedia, a financial media website. Joint accounts are insured up to $500,000.

Federal officials are taking steps to ensure that other banks are not affected.

“If your money is in a large bank, and even some regional banks and credit unions, you shouldn’t be worried about it,” Silver said.

Can I Tell If My Bank Will Fail?

If you’re worried about your bank closing in the near future, there are a few things to keep in mind, according to Silver:

— View your bank’s share price.

– Track your bank’s quarterly and annual reports.

– Start Google Alerts when there is news about your bank.

You want to make sure you pay close attention to the way your bank is behaving, Silver said.

“If they’re trying to raise money through a share offering or if they’re trying to sell more stock, they could be in trouble on their balance sheet,” Silver said.

Should I be looking for alternatives?

If you have more than $250,000 in the bank, there are a few things you can do:

Open joint account

You can protect up to $500,000 by opening a joint account with someone else, such as your spouse, said Greg McBride, chief financial analyst at Bankrate.a financial services company.

“A married couple could easily protect a million dollars by each having an individual account and a joint account at the same bank,” McBride said.

– move to another financial institution

McBride said that moving your money to other financial institutions and having up to $250,000 in each account will ensure that your money is insured by the FDIC.

– Do not withdraw cash

Despite the recent uncertainty, experts do not recommend withdrawing cash from your account. It is safer to keep your money in financial institutions rather than in your home, especially when the amount is insured.

“This is not the time to take your money out of the bank,” Silver said.

Even those who do not have uninsured deposits usually get almost all their money back.

“It takes time, but generally all depositors — both insured and uninsured — get their money back,” said Todd Phillips, an FDIC consultant and former attorney. “Uninsured depositors may have to wait a while, and there may be deductions where they lose 10 to 15% of their savings, but it’s never zero.”


Associated Press Writer Ken Sweet contributed to this report.


The Associated Press is supported by the Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The Independent Foundation is separate from Charles Schwab & Company Inc. AP is solely responsible for its journalism.

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