How to make sure your money is protected amid recent bank failures, according to the experts.
he San Francisco-based First Republic Bank recently became the third U.S. bank to close its doors in just two months, after the Federal Deposit Insurance Corporation announced that most of the bank’s assets would be acquired by JPMorgan following a weekend sale. All locations opened as JPMorgan Chase branches on Monday.
In the case of First Republic and other FDIC-insured banks, customers have not had much to mourn save the personal relationship they might have had with a smaller bank, Pearl says. “People at First Republic Bank are not even going to be out of their money for an hour,” he says. “So it didn’t really affect them at all.”There are a few ways to keep track of how your bank is doing.
But for those unlikely to find themselves digging through financial reports, the key thing is to check if your bank is covered by FDIC insurance, which will ensure that any deposit under $250,000 is recovered in the event of a failure. If your bank is covered by the FDIC, your money is protected without any action on your part.
“Keep your money in an FDIC-insured bank if you have $250,000 or less. If you have more than that I would go with one of the big banks,” he says. “The government is not going to let them fail,” he says.For individuals or businesses with more than $250,000 in deposits, Pearl says it’s possible to divide funds between banks. One way to do this is through an Insured Cash Sweep, which distributes funds across banks to keep funds below the FDIC insurance limit.
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