YOUNGSTOWN, Ohio (WKBN) – You may have heard in the news lately about Silicon Valley Bank and wondering how to make sure your money is safe.
Regulators had to rush to close Silicon Valley, a financial institution with more than $200 billion in assets, on Friday when it experienced a traditional run on the bank where depositors rushed to withdraw their funds all at once. It is the second-largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual.
Silicon Valley Bank began its slide into insolvency when its customers, largely technology companies that needed cash as they struggled to get financing, started withdrawing their deposits. The bank had to sell bonds at a loss to cover the withdrawals, leading to the largest failure of a U.S. financial institution since the height of the financial crisis.
Most banks are insured by the Federal Insurance Deposit Corporation. It’s an independent agency of the United States government. You usually will see the logo FDIC in your bank.
An FDIC-insured bank covers depositors’ accounts dollar for dollar, including principal and accrued interest up to the insurance limit. The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
If you spread your money around to different banks, each account is insured for up to $250,000. But money deposited in separate branches of the same insured bank is not separately insured.
You should know, though, that federal law limits the amount of insurance the FDIC can pay to depositors when an insured bank fails.
To check whether the FDIC insures a specific bank or savings association:
- Call the FDIC toll-free: 1-877-275-3342
- Use FDIC’s “Bank Find” at: BankFind
- Look for the FDIC sign where deposits are received