The collapse of Silicon Valley Bank has left many savers feeling uneasy about the safety of their money. While federal authorities have guaranteed all deposits, including those in excess of the $250,000 limit normally covered by the FDIC, financial advisors suggest that skittish savers take steps to protect their money from future bank failures.
Understanding FDIC Coverage and Protection
To make the most of FDIC protections, savers should first tally up the exact amount of money they have in their accounts. While most investment and retirement-account assets aren’t FDIC-insured, brokerage firm failures may be covered by the SIPC.
At any U.S. bank, accounts with balances up to $250,000 per person are protected. Coverage can be multiplied by having $250,000 for each type of account at each bank. Joint accounts are eligible for up to $500,000 protection, and married couples can have up to $1 million in coverage at a single bank.
It’s important to remember that while banks are now safer for consumers, there are still risks involved. Leaving money in a bank account in excess of the FDIC insurance limit is like driving without a seatbelt, inviting disaster.
Strategies to Consider for Protecting Your Money
If you have more than $250,000 in liquid assets, there are several strategies to consider.
Open Multiple Accounts: By opening joint and individual accounts, each owned by the same person, savers can boost FDIC coverage. Custodial accounts for children can also provide additional coverage.
Deposit Swapping: Deposit swapping networks, such as IntraFi Network LLC, can work with multiple banks to separate large deposits into amounts below the federal insurance limit. Customers can get the benefit of multiple banks while dealing with only one.
Bonds: U.S. Treasurys are a low-risk alternative to stashing money in a bank. They are backed by the full faith and credit of the federal government.
Protect Your Money Today
The collapse of Silicon Valley Bank has highlighted the need for savers to protect their money from future bank failures. While FDIC insurance can offer some protection, savers should consider additional strategies such as opening multiple accounts, using deposit swapping networks, and investing in U.S. Treasurys.
Don’t wait until it’s too late. Protect your money today and give yourself peace of mind for the future.
