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Are My Assets Safe After Bank Failure?

July 27, 2023

With recent news about bank failures, one cannot help but think about how safe their assets are. Your hard-earned money is safe – BUT – only to a certain amount.

Assets held by banks, credit unions and brokerage firms are insured in the event that the financial institution experiences hardships. But, are you aware that the insured amount is capped? Having all of your eggs in one basket might not be in your best interest.

What does FDIC Insured mean?

Most of us have heard the phrase “FDIC insured”. What does that mean? Well, the FDIC – Federal Deposit Insurance Corporation – provides insurance coverage with regard to deposits at banking institutions. The amount of “insurance” is $250,000 per depositor based on ownership of the accounts.

But, what about accounts held at credit unions?

Credit unions are covered by the National Credit Union Administration that offers similar coverage - $250,000 – as the FDIC.

And last, but not least, what about assets held in brokerage accounts?

The SIPC – Securities Investor Protection Corporation – covers deposits up to $500,000 per customer.

What can you do to protect your assets?

You may be thinking that you have more than the amounts stated above in a financial institution, and if so, what can you do to protect those assets. Bear in mind that the coverage is based upon ownership, and it might be beneficial for you to contact your financial institution to have a conversation about the limits and options available to protect your assets without moving them.

Some institutions may offer bank deposit sweep programs that would transfer funds into multiple accounts overnight, spreading the risk across multiple accounts to gain maximum FDIC coverage. Check with your financial institution to learn what options they have to retitle accounts to afford greater protection.

Don’t wait to address the protection of your assets. Talk to your financial institutions to make certain you are protected.

Questions? Contact us.

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