Is your money safe in the bank?
Some banks or credit unions might not be federally insured.
KNOXVILLE, Tenn. (WVLT) - For more than 80 years, the Federal Depository Insurance Corporation has been protecting your money whether you knew it or not.
You may have noticed signs around your bank that said “FDIC Insured,” reminding customers that up to $250,000 of their deposits is insured in the unlikely event of the bank closing.
However, some banks or credit unions may not be FDIC-insured.
On June 30, the FDIC Deposit Insurance Fund (DIF) balance was $124.5 billion, according to its official website.
However, with the U.S. banks’ total deposits surpassing more than $19 trillion for the second quarter of 2022, many people are now wondering if the FDIC can still protect their money during a systemic failure of financial institutions in the U.S.
Dr. Bill Fox, a former University of Tennessee economics professor, explained why he trusts the federal government.
“I think what I would say is diversification is a good idea. Not because I am afraid the FDIC can’t cover the $250,000, that’s not my worry. My concern would be over time, am I getting a reasonable return to my assets,” Fox said.
The number of banks on the ‘Problem Bank List’ is unchanged from the previous quarter at 40 banks, according to a FDIC statement. In 2013, Mountain National Bank in Sevierville was on the failed bank list, which was acquired by First Tennessee Bank National Association.
Even if your investments are purchased at an insured bank, the FDIC does not insure money invested in stocks, bonds, life insurance policies and annuities. On the other hand, checking, savings and money market accounts are insured, according to their website.
When comparing the amount in the fund compared to the U.S. banks’ total deposits, FDIC officials explained why people should not be concerned.
“Since the FDIC was created in 1933, no one has lost a penny of their insured deposits,” FDIC officials said in a statement.
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