what experts say about the safety of your money

SVB, Signature Error: Here's what you need to know about FDIC coverage

Despite the financial crisis of 2008, bank failures are extremely rare.

However, the unexpected closures of Silicon Valley Bank and Signature Bank have many consumers worried about their deposits, their bank and the US banking system.

“Every American should have confidence that their deposits will be there if and when they need them,” President Joe Biden said Monday in an address aimed at calming fears about the Federal Deposit Insurance fund’s move corp and the US Treasury to disperse quickly to prevent broader contagion.

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Still, recent events raise old questions about how safe your cash is at the bank. Here, experts answer what a bank run is, how FDIC insurance works, and whether your deposits are still safe.

What is a bank run?

As banks take customers’ deposits and invest those funds, this cash is not readily available.

“If everyone wants to withdraw money at the same time, the bank doesn’t have the reserves to do it and they basically go upside down,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and former acting chair of the White House Advisory Council.

In a moment of panic, customers would literally run to the bank, Philipson explained. This is now done electronically. And because electronic transactions are processed at high speeds, bank runs are faster than ever – in the case of SVB, it was A dizzying 48 hours.

While SVB also had an unusually high percentage of uninsured deposits, there are other mid-sized banks that could be at risk of large withdrawals.

Can this also happen with other banks?

andresr | E+ | Getty Images

What about the cash at my bank?

It doesn’t look like a financial crisis yet.

Jew Boudreaux

Senior Financial Planner at The Planning Center

How is this different from 2008?

https://www.cnbc.com/2023/03/14/us-banking-concerns-what-experts-are-saying-about-your-moneys-safety.html what experts say about the safety of your money


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