The news of the past couple of weeks has been unsettling for many people, with Lehman Brothers filing for bankruptcy, Merrill Lynch being sold, and AIG getting a government bailout. Even if you don’t have money in these institutions it can make you wonder how safe your money is. In the midst of all the turmoil, understanding the many safeguards that are in place can go a long way toward easing your concerns.
One of the most important indicators that your bank account money is safe is that the Federal Deposit Insurance Corporation (FDIC) insures it. Look for the FDIC symbol on your bank’s web site or search for your bank on the FDIC’s web site. As noted on its site, the FDIC insures up to $100,000 per depositor per insured bank, which includes the total of money you have in checking, savings, and money market accounts, and certificates of deposit. In the case of joint accounts, each co-owner has $100,000 of coverage. Money held in one or more Individual Retirement Accounts at a bank is insured for a total of up to $250,000. If you have significant sums in a bank and want to see how much of it is insured, use the FDIC’s Electronic Deposit Insurance Estimator.
If you have money in a credit union, make sure it is insured by the National Credit Union Share Insurance Fund (NCUSIF) or by American Share Insurance (ASI). The NCUSIF covers up to $100,000 held by an individual across checking, savings, or money market accounts or CDs (a two-person joint account is insured at $100,000 per person), or $250,000 in IRAs. ASI covers up to $250,000 for each account held by an ASI-insured credit union member.
If you have money at a brokerage house, look to see if the Securities Investor Protection Corporation (SIPC) protects it. The SIPC does not protect against investment losses, but it does protect up to $500,000 in brokerage accounts per investor in cases of fraud or the failure of a brokerage house. If you don’t see SIPC on your firm’s web site, search the SIPC’s member database.
For more details on the various protections in place at banks, credit unions, brokerage houses, and mortgage lenders, see this article from Kiplinger.com.
Comments are closed.