6:32 pm ET, March 13, 2023
No, don’t withdraw your money from your bank. Here are the answers to other important questions
From CNN’s Ramisha Maroof
After The Shocking Collapse of Silicon Valley Bank In what turned out to be the second largest bank failure in U.S. history, many customers are wondering if their money is safe.
Here are answers to some frequently asked questions:
Should I worry about the money saved in my bank?
In short, if you have less than $250,000 in your account, you definitely have nothing to worry about. This is because the US government insures the first $250,000 of eligible accounts.
Many SVB customers have deposited more than $250,000 and are now unable to withdraw, with some companies struggling to get paid.
Should I withdraw my money from my bank?
No, it doesn’t make sense to take your money out of the bank, said Jay Hatfield, CEO of Infrastructure Capital Advisors and portfolio manager of the InfraCap Equity Income ETF. But make sure your bank is insured by the FDIC.
“I don’t think people should panic, but it’s prudent to have insured deposits versus uninsured deposits,” Hatfield said.
Your money will most likely go nowhere. Overall, everyday consumers are unlikely to be affected. But the slump is a good reminder to know where your money is and not keep it all in one place.
“The first bank failure since 2020 is a wake-up call for people to always make sure their money is in an FDIC-insured bank, within FDIC limits, and following the FDIC’s rules,” said Bankrate analyst Matthew Goldberg.
How does it compare to 2008?
Due to the regulatory reforms implemented after the 2008 crisis, in theory, the banking sector should be more stable.
The government’s moves this weekend to try to prevent the next SVB from happening further stabilize the sector after a chaotic week. Rising interest rates eroded the value of cheap Treasury bonds SVB and other banks invested in years ago — last week’s bank run helped customers withdraw their deposits after SVB sold those bonds at steep losses. Bank.
The central bank also said it would offer bank loans of up to one year to replace devalued US Treasuries and mortgage-backed securities. The central bank will honor the principal value of the loan to the borrowing banks.