Last week, Silicon Valley Bank (SVB) collapsed. On March 10, the Federal Deposit Insurance Corporation (FDIC) issued a press release stating that SVB would be closing and the FDIC would take control of its assets. In a later March 13 press release, the FDIC said that all depositors would be protected and have full access to their funds that morning.
See: The 15 Biggest Bank Failures in US History
Find: Is Your 401(k) Retirement Money Protected From a Bank Collapse?
This recent financial event may have you wondering if your money is safe and insured. Many people keep their cash in bank accounts, thinking their money is safe — but is your money shielded in the bank?
Personal finance guru Dave Ramsey shared his thoughts in a TikTok video. He explained that most of SVB’s customers are hedge funds, venture capitalists and tech startups, with many of the bank’s customers having more than $250,000 in their accounts.
Ramsey said, “FDIC insurance for $250,000 covers you up to $250,000. The government covers your deposits in the event of a bank failure.” He continued, “Most customers are $250,000 and under.” You shouldn’t be concerned if you have less than $250,000 in your local bank account.
How To Protect Yourself
You can do the following three things to protect yourself and your money:
- Bank with an FDIC member bank: You’re protected if you have $250,000 or less in your account and use an FDIC member bank. While most banks are FDIC-insured, you can use the FDIC’s BankFind Suite page to confirm that your bank is a member.
- Keep your money in an account that qualifies for FDIC coverage: You should also ensure your account type qualifies for coverage. The FDIC covers certain accounts, including checking, savings, money market deposit accounts, and certificates of deposits (CDs).
- Don’t exceed the FDIC coverage limits: Stay within the coverage limits to remain protected. Up to $250,000 per depositor, per insured bank, for each account ownership category, is insured. But that limit may not apply to all. Forbes reported that the $250,000 insurance limit can be increased in cases where multiple named individuals are account owners across different account types at the same bank.
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This article originally appeared on GOBankingRates.com: Dave Ramsey Tells You What You Really Need To Know About Silicon Valley Bank Collapse
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