Worried About Your Bank?


According to a recent survey, nearly half of Americans are concerned about the safety of the money they have in the bank, which is the highest level of anxiety since the 2008 financial crisis.

According to a Gallup survey of 1,013 adults conducted April 3–25, 2023, after the failures of Silicon Valley Bank and Signature Bank but before the takeover of First Republic Bank, 48% of American adults said they are worried about their finances, including 19% who are “very” and 29% who are “moderately” worried.

That is a significant increase from the 45% of Americans who said they were very or moderately concerned about their money kept in banks or other financial institutions in September 2008, the previous time Gallup assessed this issue.

The most recent bank failure before Silicon Valley Bank occurred in October 2020. There have been 564 bank failures since 2001, with the majority happening during the crisis from 2007 to 2009. As of December 2022, there were about 4,700 FDIC-insured banks.

In truth, the majority of Americans have nothing to worry about because their savings are kept in bank accounts that are FDIC-protected, where they are safe. Nevertheless, the outcomes represent alarming evidence of waning trust in the US banking sector.

According to Megan Brenan, a senior editor at Gallup, “It is also unclear whether Americans’ increased concern about their own deposits reflects a lack of knowledge of the protections for small accounts provided by federal deposit insurance or their fear of a snowball effect that could bring down federal insurance as well.”

Republicans, lower-income adults, and people without college degrees are more concerned than their peers, she continued. These groups may have greater anxiety because they are unaware of FDIC insurance or because they are unhappy with the current presidential administration and the state of the US economy.

The standard insurance provided by the Federal Deposit Insurance Corp. (FDIC) for deposit accounts such as savings, checking, and certificates of deposit (CDs) is up to $250,000 per depositor, per bank, for every account ownership type.

In order to restore confidence in the American banking system after more than a third of U.S. banks failed during the Great Crash of 1929, Congress established the FDIC as an independent federal agency under the Banking Act of 1933 to guarantee bank deposits.

Banks and savings associations pay premiums to the FDIC for deposit insurance coverage. There are no Congressional appropriations made for it.

Checking, savings, money market deposit accounts (MMDAs), certificates of deposit (CDs), negotiable order of withdrawal (NOW) accounts, and cashier’s checks, money orders, or other formal documents issued by an insured bank are among the deposit accounts that the FDIC protects.

Use this FDIC tool, the Electronic Deposit Insurance Estimator, to determine how much of your money, if any, exceeds coverage limits on a per-bank basis if you are unsure whether your money is federally protected.

Deposits do not include investments, such as mutual funds, equities, bonds, annuities, and digital currency. Regardless of the amount invested, banks are required to declare that non-deposit products, such as mutual funds and annuities, are not insured because they are not deposit accounts.

The contents of a safe deposit box, life insurance policies, and municipal securities are other non-covered assets kept with a bank.

Although they are backed by the full faith and credit of the federal government, U.S. Treasury bills, bonds, and notes are not insured by the FDIC either.

According to FDIC regulations, any deposits held at the same bank by a corporation, partnership, or unincorporated body (including a for-profit or a not-for-profit organization) are totaled up and insured up to $250,000, independent from the owners’ or members’ personal accounts. There are options for small business owners to guarantee that their deposits are insured for a higher amount. The simplest method is to create a second account at a different bank that is also an FDIC member bank. This will provide you with an additional $250,000 in coverage. To boost the insured amount, you might also think about opening an account with a joint owner.

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