By now you have likely heard about the closure of Silicon Valley Bank and Signature Bank. These are the #2 and #3 biggest bank failures in American history, and the biggest since the financial crisis of 2008.
Despite that grim comparison, the cause of these bank failures is fundamentally different from the banks of 2008. For a good analysis of how this happened, see here.
The good news today is that the US Treasury, Federal Reserve, and FDIC have stepped in to fully support depositors at these failed institutions. That means no money from bank clients will be lost, which should go a long way towards bolstering confidence in the banking system.
Given the speed that this occurred, one can’t help but wonder if their own money is safe.
How To Protect Your Cash
The FDIC insures the cash of an individual bank customer up to $250,000. This means that if you have $250,000 or less in a bank account and the bank fails, the FDIC will reimburse you.
With a joint bank account (two co-owners) the insurance increases to $500,000.
If you have more cash than the FDIC insures at a single bank, we suggest you:
- Open accounts at multiple banks.
- Open an account at a bank that is part of IntraFi Network Deposits, or check if one of your current banks is already a member, and enroll. They provide FDIC insurance well above the traditional limits through a network of banks, without you having to open multiple accounts.
If you have any questions or concerns please reach out.
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The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Think Different Financial Planning cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Think Different Financial Planning does not provide tax or legal advice, and nothing contained in these materials should be taken as such. As always please remember investing involves risk and possible loss of principal capital. Advisory services are only offered to clients or prospective clients where Think Different Financial Planning and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Think Different Financial Planning unless a client service agreement is in place.Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.