The recent fall of Silicon Valley Bank may have caused some concerns, but it is important to note that the panic has largely subsided, and most banks are still stable.
To help you avoid similar scenarios in the future, here are six tips:
✅Keep cash on hand to $250,000 or less – This is the maximum amount insured by the FDIC per account per person. If you have more money than that in your bank accounts, it is recommended to split the cash between banks to ensure that no single account holds more than $250,000.
✅Have a plan in place – If a bank fails, it may take a day or two for the FDIC to restore the funds. This could leave you in a tricky situation if you need access to money immediately or your paychecks are delayed.
✅Create a plan for how you could get by for a few days if needed- Get a backup credit card. Having two cards from two different banks can provide some safety. If one bank fails, a credit card or ATM card may not work for a few days.
✅Watch investment and retirement accounts – Similar to the FDIC, the SIPC covers up to $500,000 of securities and cash per customer. If your IRA or brokerage accounts have higher balances than that, consider splitting them so that a single firm does not hold all their investments.
✅Be aware of uninsured investments – The SIPC does not cover everything, so make sure you are informed about the risks when deciding whether to invest.
✅Support small banks – Supporting smaller and newer banks can spread some of the power and risk, keeping any one institution from becoming too powerful.
By following these tips, you can better protect your assets and investments, and reduce the risk by any future banking failures.
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