NEW YORK (AP) — The recent failures of Silicon Valley Bank and Signature Bank, which catered mostly to the tech industry, may have you worried about your money. They were the second- and third-biggest bank failures in U.S. history.
It all started last week when too many depositors tried to withdraw their money from Silicon Valley Bank in Santa Clara, California. That’s known as a bank run.
The bank had to sell treasury bonds and other securities at a steep loss and more people kept trying to withdraw money as word of the situation spread, causing the bank to fail. Regulators took control of New York-based Signature Bank soon after, saying it was necessary to protect depositors after too many people withdrew money.
In response, regulators guaranteed all deposits at the two banks and created a program to help shield other banks to shield them from a run on deposits.
Here’s what you need to know:
IS MY MONEY SAFE?
Yes, if your money is in a bank insured by the Federal Deposit Insurance Corp. and you have less than $250,000 there. If the bank fails, you’ll get your money back.
Nearly all banks are FDIC insured. You can look for the FDIC logo at bank teller windows or on the entrance to your bank branch.
Credit unions are insured by the National Credit Union Administration.
If you have over $250,000 in an individual account, which most people don’t, the amount over $250,000 is considered uninsured and experts recommend that you move the remainder of your money to a different financial institution, said Caleb Silver, editor in chief of Investopedia, a financial media website. Joint accounts are insured up to $500,000.
Federal officials have been taking steps to make sure other banks aren’t impacted.
“You shouldn’t be too concerned about your money if it’s in one of the bigger banks, and even in some of the regional banks and the credit unions,” Silver said.
CAN I TELL IF MY BANK WILL FAIL?
If you are worried about your bank closing in the near future, there are some things you can watch out for, according to Silver:
— Watch the stock price of your bank.
