By Ron Samuels
As uncertainty fuels turmoil in the stock market, I have been asked by clients, friends and business associates about the safety and security of banks and their deposits. These questions and concerns are certainly understandable, but let me reassure you that the banking industry and deposits held in FDIC insured accounts are safe.
Two important things to know, as the economic crisis swirls around us:
- Deposits in FDIC insured accounts are protected. The FDIC is financially secure and has the resources it needs to protect customer deposits. It has sufficient cash on hand today to meet its needs for the foreseeable future, and is funded by banks, not the government.
- The banking industry is committed to ensuring the FDIC’s continued strength. Banks fully fund the FDIC through premiums. In addition, the banking industry -- with its $1.53 trillion in capital -- stands fully behind the FDIC to assure it remains strong.
What can you do in these uncertain economic times?
- Check with your banker to ensure that your bank deposits are structured to maximize the availability of FDIC insurance for your accounts. (Non-interest bearing deposits are fully insured, regardless of the amount.)
- Keep informed of events impacting our economy, but don’t let your personal financial decisions be ruled by fear and emotion.
- Having a trusted financial advisor is key in times such as these; if you don’t have that kind of relationship now with your banker or investment advisor, ask friends or family for recommendations to find the right financial partner for your family and your business.