With the recent failure of Washington Mutual, a lot of people are worried about their money. Should we be taking our money out of the bank so that it won’t disappear in a bank failure?
The answer is a very clear no. Thanks to the FDIC (created in 1933), insured accounts are safe in the bank up to $100,000 ($200,000 if a joint account with your spouse). Generally, if a bank fails, the accounts will quickly end up at another bank. Aside from the name of your bank changing (which happens frequently anyhow), you won’t notice the difference. A good example of this is J.P. Morgan Chase’s taking over Washington Mutual Accounts. In this case, even the local branches are staying open.
Even if a bank was to fail without a bank taking over the accounts, you will still get your money back (up to $100,000) from the U.S. Government. As long as your account has FDIC coverage, you are set! Keep a calm head through these turbulent waters, your money is safe in an FDIC insured bank.
For more information, you can read this article at MSNBC with a ton of detail on the FDIC.
Written by Matt on September 30, 2008
