Protecting Your Finances in the Face of Bank Failures

by Retirement Advisor | Jan 5, 2024 | Bank Failures | 1 comment

In this video, Kelly Korshak addresses the concern of bank failures and their impact on everyday Americans. He responds to a viewer’s question about the safety of their money in smaller banks like Ally and Charles Schwab. Kelly explains that there is no need to worry as historical instances have shown that the government, specifically the Federal Reserve (FED) and FDIC, steps in to bail out failing banks and protect customers’ funds, even for those with larger amounts of money. The video reassures viewers that as long as their deposits are under $250,000, they are protected by the FDIC. Kelly highlights the importance of understanding that while bank failures are not desirable in a good economy, human decision-making and risk management can still play a significant role in these occurrences.

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Money Matters: Safeguarding Your Finances Amid Bank Failures

Bank failures can be a scary and unsettling experience for anyone who has their hard-earned money in a financial institution. While bank failures are rare, they can still happen, and it’s important to be prepared and safeguard your finances in case the worst occurs. Here are some tips for protecting your money in the event of a bank failure.

1. Stay Informed: Keep an eye on the news and stay informed about the financial health of your bank. Look for any signs of trouble, such as a declining stock price or news of management issues. If you have any concerns, it may be a good idea to consider moving your money to a more stable institution.

2. FDIC Insurance: In the United States, the Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor, per insured bank for each account ownership category. Make sure that your bank is FDIC insured and your deposits are within the coverage limits. If your bank fails, the FDIC will step in and guarantee the safety of your deposits.

3. Diversify Your Accounts: Instead of keeping all of your money in one bank, consider spreading your funds across multiple institutions. This can help mitigate your risk and protect your finances from a single bank failure.

4. Research Alternative Options: If you’re concerned about the stability of your bank, consider researching alternative options such as credit unions or online banks. These institutions can offer competitive interest rates and may be a safer place to keep your money.

5. Monitor Your Accounts: Keep a close eye on your bank accounts and monitor your transactions regularly. If you notice any unusual activity, report it to your bank immediately. This can help protect you from potential fraud and financial loss.

6. Keep Records: Keep detailed records of your bank statements, account balances, and account terms and conditions. This can be helpful in the event of a bank failure, allowing you to prove the amount of your deposits and other important information.

7. Seek Professional Advice: If you’re unsure about the stability of your bank or the safety of your deposits, consider seeking professional advice from a financial advisor or a banking expert. They can help you assess the situation and provide guidance on how to protect your finances.

In conclusion, while bank failures are rare, it’s important to be prepared and safeguard your finances in case the worst occurs. By staying informed, taking advantage of FDIC insurance, diversifying your accounts, and monitoring your accounts, you can protect yourself from potential financial loss. Remember to stay proactive and seek professional advice if you have any concerns about the stability of your bank.