Three banks, Signature Bank, First Republic Bank, and Silicon Valley Bank have failed in the first 4 months of 2023. Because these banks have failed, you may be worried about the safety of your money in bank or credit union accounts. First, know that no customer at these banks lost money thanks to insurance that protects the money you deposit at your bank or credit union.
When a bank fails, customers (also called depositors) at other banks or credit unions often worry about their money. However, bank failures have been very uncommon over time. In fact, in the last ten years, far less than 1% of banks have failed (USA Today). Additionally, the money held in most accounts at a failed bank is insured through the Federal Deposit Insurance Corporation (FDIC). Money held in credit union accounts is insured through the National Credit Union Administration (NCUA). Many types of accounts are covered by insurance such as checking, savings, certificates of deposit, money market accounts, and others. Note that investments such as stocks, bonds, mutual funds, annuities, life insurance, crypto assets, and other investments are not insured by the FDIC or NCUA.
Most banks & credit unions are required to pay for insurance to protect the money you hold in their accounts. FDIC & NCUA insurance covers a maximum of $250,000 of your money per customer per ownership category. Because of how FDIC and NCUA insurance is structured, customers may be able to insure a larger amount than $250,000. To learn if your bank or credit union offers FDIC or NCUA insurance, look for these signs at your local branch:
Also, there are other ways to learn if insurance coverage is offered through your bank or credit union. You can:
- Use the FDIC’s BankFind Suite search tool– https://banks.data.fdic.gov/bankfind-suite/bankfind
- Use the NCUA’s Credit Union Locator tool– https://mapping.ncua.gov/
- Call your bank or the FDIC at 1-877-ASK-FDIC (275-3342)
- Call your credit union or the NCUA at 1-800-755-1030
You can also use online tools to explore your insurance coverage at your bank or credit union.
- The FDIC offers the Electronic Deposit Insurance Estimator (EDIE). EDIE allows you to input dollar amounts you have on deposit in an insured bank or use a hypothetical scenario to determine your coverage. EDIE can be found at https://edie.fdic.gov/calculator.html
- The NCUA offers the Share Insurance Estimator, which lets consumers, credit unions, and their members know how its share insurance rules apply to member share accounts—what’s insured and what portion (if any) exceeds coverage limits. This tool can be found at https://mycreditunion.gov/insurance-estimator
Talk about the safety of money you hold at banks or credit unions–and other financial topics–with your county’s financial educator. Visit https://counties.extension.wisc.edu/ for more information.