Is Your Money Safe?
By Pamela Redwine
For those of you who may have money in banks, checking, savings etc., and have been asking “Is my Money Safe?” Listed below are some answers that might help you have a sigh of relief. This article was put together by my guest writer this week, Grenell Rogers, Area Extension Agent in Family Resource Management.
IS YOUR MONEY SAFE?
The turmoil surrounding the financial markets in the past weeks has been unsettling to say the least. Bank failures, Fannie/Freddie, Lehman bankruptcy, AIG … the list of problems is a pretty long one. The surfacing question for most is – ‘Is My Money Safe?’ …
Should I worry about the safety of my bank accounts?
In most instances, your money is FDIC insured (up to a limit of $100,000 at each bank – twice that amount for joint accounts). Insured accounts include checking, savings, and certificates of deposit (CDs).
Is coverage provided on my retirement-savings accounts?
Yes, certain types of retirement accounts are covered by FDIC insurance (Traditional, Roth, and SEP IRAs and Keogh Plans); deposits in these accounts are added together and insured up to $250,000 per person. This does not insure against the loss of value in your account by taking investment risk …
What if I bank at a credit union?
The National Credit Union Share Insurance Fund was established by Congress to insure individual accounts up to $100,000 — similar to FDIC insurance. Credit Union retirement accounts are also insured at comparable levels to “regular” bank retirement savings accounts.
If my bank gets taken over (like IndyMac), how long will it take for me to have access to my money?
IndyMac customers had continuous access to their deposits through ATM and debit cards. After the bank was seized on a Friday by federal regulators, some customers did not have online or phone access for the weekend, but everyone had full access to all their insured money by Monday morning.
How can I check to see if all my money is insured?
Both the FDIC and NCUA websites have calculators that will allow you to plug in your account info and deposit amounts to find out whether any of your money is uninsured. Go to — http://www.fdic.gov/edie and http://webapps.ncua.gov/ins <http://webapps.ncua.gov/ins/> .
What if the firm where I have a brokerage account goes bankrupt (i.e., Lehman)?
Firms must follow strict rules about segregating customers’ investments from the firm’s money – so your account should remain intact even if the brokerages goes under and another firm takes over its business. For example, stocks, bonds, and mutual funds are physically held by an independent depository, not the brokerage firm.
What if my mortgage lender or servicer goes belly up?
The problem is the lenders, not yours. Continue paying your mortgage; during the bankruptcy process your loan file will be transferred to a new owner or servicer and you will be notified by both parties. Your loan terms will remain unchanged even if the institution fails.
(SOURCE – Kiplinger’s Personal Finance – 10/2008.)