The short answer... Probably not.
A Little More Background
The two big banks that started this current strong scrutiny of banking were heavily involved with businesses, particularly businesses that carry more risk such as start ups and crypto currencies. Yes, it is possible they could have made better choices over the last few months, but they didn't.
As certain news was released bank customers started a "run on the bank" which is worried people taking all their money out of the bank. Banks don't keep all of their customer's money just sitting in their vault, so too many withdrawals, and banks "run out of money".
Are You Protected?
So, should you be unduly worried? Probably not. One of the keys to remember is to check that your bank is covered by the FDIC for up to $250,000 of deposits. What this means roughly is, if you have less than $250,000 in a bank, in the event the bank shuts down, you might have to wait a few days, but your money will be there for you. (Up to that $250,000 limit.)
But wait, if you have more than over $250,000, how can you protect more than $250,000 in the bank? You have the option to split it up into two or more FDIC insured banks.
But I Use a Credit Union, Not a Bank!
Take a breath! The government has a separate insurance program for Credit Unions called NCUA that works pretty much the same. $250,000 in insurance for your deposits in your credit union.
Is That Everything I Need To Know?
Well, one thing to remember if your bank (or credit union) "collapses", You may not be able to access your money immediately. The FDIC (and NCUA) work to get your money returned to you as soon as possible. Usually a day or two. (The FDIC's goal is to get you your money within two days.)
How can you easily mitigate this? Even if you don't have more than $250,000 in a bank or credit union, you can certainly pick a different bank/credit union and have a second account to have accessible money in the interim. In addition, you might want to consider having a little cash at home to tide you over.
You might want to consider these things anyway. What happens in the event of a major power outage? (Like we had... ) Or if you lose the debit card from your main bank?
Conclusion
You do have to do your own research. Make sure your bank or credit union is covered by the FDIC or NCUA (they probably are, but...). Think about how you want to manage your risk in the unlikely event your bank or credit union has a problem.
Also, put the bank crisis in perspective, is it possible your bank or credit union may become part of the banking crisis, of course. However it is actually unlikely but it is being covered extensively by the news outlets. If you are intentional with your money you can feel more confident in all areas of your financial life.
Don't wait until it rains to buy an umbrella.
Are you ready to be more intentional with your money? Set up a call. https://calendly.com/knapperfinancialcoaching
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