07 May Traditional Banks vs Your Mattress
Is your money still safe in a traditional bank?
With the world flipped upside down, you may be worried about your finances and whether or not they are safe at a traditional bank. The truth is, the safest place for your money is still in a federally insured bank. In fact, banks are safer than keeping a large amount of cash in your wallet or under your mattress. That’s because banks have security systems and technologies to protect your money against theft and fraud.
- Protection from fire, flood or theft. Cash can be stolen, damaged or destroyed. If you keep cash in your home or car, your homeowners or renters insurance, if you have any, may not cover the full amount due to those types of losses. Money deposited in a bank account isn’t subject to those risks.
Banks are also insured by the Federal Deposit Insurance Corporation, or the FDIC.
- FDIC insurance. Most deposits in banks are insured dollar-for-dollar by the Federal Deposit Insurance Corp. This insurance covers your principal and any interest you’re owed through the date of your bank’s default up to $250,000 in combined total balances.
You don’t have to apply for FDIC insurance. This protection is provided automatically when you open an account. The types of accounts that are covered include checking, savings, money market deposit and certificates of deposit.
The standard FDIC insurance amount is $250,000 per depositor, per FDIC-insured bank, per account ownership category. Examples of ownership categories include a single account, joint account, trust account, or corporate account.
You can have more than $250,000 of insured deposits at one bank if your accounts have different ownership categories.
No matter what is going on outside, you can always trust your financial institutions to keep your money safe. If you have more questions or concerns, feel free to contact your local bank or the FDIC’s main website.