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Is Your Money Safe?

Banking in Today's Economy: Is Your Money Safe?

When someone told me she couldn't eat breakfast yesterday because of the history-making day on Wall Street, I knew that panic was officially in the air. The economy has certainly seen better days and it's very possible that we haven't seen the worst of it, and some of you have expressed concern about keeping your money in a particular bank and selecting the safest bank possible to service your accounts.

I cannot predict how far the crisis in the financial sector will go or the lasting effects on the global economy, but I can offer some reassuring information in terms of your personal banking situation. Learn more about banking in today's economy when you


The FDIC is still your friend, as it continues to insure deposits in affiliated banks like it has done since the Great Depression. FDIC insurance covers deposits up to $100,000 for individual and joint accounts at each bank, and IRAs can be insured up to $250,000. Joint accounts are insured up to $100,000 per account holder, so if neither owner has other accounts at the bank the joint account would be insured up to $200,000. If you're looking for a bank or wondering if you should be, first double check that your bank has FDIC insurance.

While the majority of the big trouble has been limited to investments and left the FDIC out of the picture, it's true that Washington Mutual could be on the brink of failure. If this occurs the FDIC's funds could be drained from covering WaMu's customer accounts, in which case the FDIC would probably ask the US Treasury for funds to continue protecting depositors. Reevaluate the safety of your bank, but there's no need to start keeping your money under your mattress.


Join The Conversation
baybug baybug 9 years
Washington Mutual worries me, but I also try to keep half of my money at a credit union.
Stella-Stylist Stella-Stylist 9 years
Thanks Savvy!
outofhere outofhere 9 years
Thanks Savvy for your answer, appreciate it and thanks for the FDIC link. I wanted to put some of my funds with my local credit union because that's where I have most of my accounts but the interest rate for their MM account is considerably lower than what I'm getting at my local bank.
Ineedclarity Ineedclarity 9 years
This worries me since I bank at Washington Mutual. I think I'm going to put more money in my credit union account to be on the safe side.
syako syako 9 years
Good to know. Not that I'm even close to being bugged with that problem, but I heard a commentator on the news mention opening accounts with tons of SSN so all her assets would be covered and I thought - WTF! :P
Smart-Living Smart-Living 9 years
No, that isn't correct. FDIC coverage is per depositor, per insured bank and is not based on SSN. If you have a ton of money, the best way to protect yourself is to not keep all of your assets under one roof. You can find all FDIC facts by vising their website,
outofhere outofhere 9 years
That is a good question syako - Savvy, is that correct?
syako syako 9 years
Isn't the FDIC guarantee based only on SSN? So even if you have 100,000 quantities spread out over 4 banks (sigh, that would be nice!) you wouldn't be insured for all that money? I heard something like that on the news... please correct me for I hope that is wrong. Thanks for the post Savvy. I'm leaning more and more toward the credit union route these days.
SugarKat SugarKat 9 years
Wow, thanks. As long as they're insured, I'm not worried. I don't have that much to lose anyway... Basically if we spread our money out then we're covered.
Smart-Living Smart-Living 9 years
This article is simply addressing banking, not investing. SIPC covers investments, FDIC covers deposits.
RosaDilia RosaDilia 9 years
I currently bank with Bank of America hopefully their negotiations and purchase of Merrill Lynch will be good for my money.
gemsera gemsera 9 years
Savvy, do you have any links or advice for those of us across the pond (UK)? Cheers :)
Shopaholichunny Shopaholichunny 9 years
Thanks Savvy! I have my money in a credit union and I was worried there for a while. :)
popgoestheworld popgoestheworld 9 years
ilanac - I got this from my Morgan Stanley financial advisor this AM. Account Protection Clients have protection of 100 percent of the net equity balances (securities and cash) held in your Account. Coverage is provided by Securities Investor Protection Corporation (“SIPC”) and Customer Asset Protection Company (“CAPCO”). SIPC is a nonprofit member organization of U.S. broker-dealers created in 1970 by the U.S. Congress. SIPC coverage protects customers of a U.S. registered broker-dealer in the event the broker-dealer becomes financially insolvent and cannot return the full value of a customer’s securities and cash in the broker-dealer’s possession or control. SIPC covers each customer’s account up to $500,000, of which up to $100,000 may be cash. We have purchased excess coverage from CAPCO, an insurance company registered in New York and founded and controlled by Morgan Stanley and 13 other of the largest brokerage firms in the United States. Excess coverage follows the terms of SIPC coverage but covers each Account up to its full net equity value, including all cash balances. CAPCO is rated A+ by Standard & Poor’s. SIPC and excess coverage apply to securities and cash in the exclusive possession or control of Morgan Stanley. For this purpose, mutual funds—including Money Funds, which may be redeemed only through Morgan Stanley—are covered by Morgan Stanley’s SIPC and excess coverage. Certain securities such as mutual funds, including Money Funds, annuities, life insurance and limited partnerships, which may be redeemed or liquidated by direct contact with the issuer, carrier, distributor, transfer agent or another third party (e.g., by letter, telephone, Internet or checkwriting), generally are not covered by SIPC or our excess coverage. It is also important to note that the asset protection offered by SIPC and CAPCO does not protect against losses of value due to market fluctuations.
Smart-Living Smart-Living 9 years
SugarKat- Credit unions are covered by a separate entity called the National Credit Union Administration (NCUA). Here is the link to its website:
itsme3683 itsme3683 9 years
Well part of the beauty of the FDIC is that it practically eliminates the need for itself. Like, just the fact that the FDIC exists means that a bank run is very unlikely to occur because people know that their accounts are insured and that they are guaranteed that money, so they don't have to worry about running to the bank to get it.
ilanac13 ilanac13 9 years
it's really scary to think about how this is possibly going to affect not only investment firms but personal accounts as well. i've always paid attention to FDIC firms and that's always been reassuring to know that i have security with my personal money but now i'm just worrying about my investments that are being managed by morgan stanley - one of the FEW remaining banks that are still standing. we'll have to see how this shakes out. it's good to know what the limitations are on insurance on my accounts -and i guess that it means that i'll have to be aware of what my balances are to insure that i don't lose my $$
SugarKat SugarKat 9 years
Aren't credit unions covered by the FDIC? Wouldn't the FDIC go bankrupt if there was a run on the bank? I can't imagine that they have that much sacked'd be like if every person's house burnt down in the country...every insurance company would go bankrupt...
Shopaholichunny Shopaholichunny 9 years
:jawdrop: scary..
SummerFlirts SummerFlirts 9 years
Wow, I work at a Credit Union and I'm glad we're not having these issues...
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