account ownership
Here’s how certain bank deposits are backed by the government [Video]
Is your money safe in your bank account? That’s the question many Americans might be asking following the collapse of Silicon Valley Bank.
The simple answer, for most of us, is yes.
The Federal Deposit Insurance Corp.’s (FDIC) standard insurance covers up to $250,000 per depositor, per bank, for each account ownership category for deposit accounts like savings, checking, and certificates of deposit (CDs).
What spooked many customers of Silicon Valley Bank — until the the government ensured this weekend that all depositors would be paid back — is that their deposits far exceeded that insurance amount. Luckily, that’s largely not the case for everyday Americans.
“The vast majority of American households have bank deposits that are well below the $250,000 limit for FDIC insurance, which guarantees these households that their money is safe,” Mark Zandi, chief economist at Moody’s Analytics, told Yahoo Finance.
“These deposits are fully backed by the US government. This is very different from nearly all SVB depositors, who are mostly tech companies that had deposits of over $250,000 and were thus not insured by the FDIC. But even these depositors will not lose their deposits as the US government has stepped up and insured these deposits as well,” he added. “Households have no reason to be nervous about getting their money out of their bank when they want it.”
Here’s what to know about FDIC insurance.
What’s insured by the FDIC
To insure bank deposits, Congress established the FDIC, an independent federal agency under the Banking Act of 1933 to restore trust in the American banking system after more than a third of US banks failed after the Great