When workers are stressed about money their health and productivity suffer. So, we put together a Q&A for employers to share with workers that answers questions we’ve been getting from clients about the recent turmoil in the banking industry.
When workers are stressed their health and productivity suffer.
Our TrustPlus Personal Financial Coaches have been getting a lot of questions over the past few weeks about the upheaval in the banking industry which began this month with the failures of Silicon Valley Bank and Signature Bank.
So, we put together a Q&A for employers to share with workers to reassure them that their money is (probably) safe and to offer a few expert tips to navigate the current financial environment.
Financial concerns were already top of mind for workers nationally before the bank failures upped the ante:
Covering monthly expenses went from the ninth rated concern of employees in 2021 to the top concern in 2022 according to the consulting firm Mercer. Ongoing inflation and the recent turmoil in the banking industry isn’t helping.
The collapse of Silicon Valley Bank and Signature Bank this month, the second and third-largest bank failures in U.S. history, plus declining stock prices set the financial world aflutter.
They also caused many of our TrustPlus clients to wonder if and how they’ll be impacted.
Fortunately, federal regulators stepped up to guarantee that Silicon Valley Bank and Signature Bank clients have full access to all of their deposits. They also created “bridge banks” to ensure that Silicon Valley Bank and Signature Bank clients receive uninterrupted customer service and access to their funds via ATM, debit cards, and writing checks.
Lines of credit and loans from these two financial institutions have also been transferred to the newly created “bridge banks” and clients can continue to make payments as usual.
Should I be concerned about losing my money?
The most important thing for the vast majority of people to understand is that your money is safe, up to $250,000, if it’s in a U.S. bank insured by the Federal Deposit Insurance Corporation.
Almost all banks are FDIC insured. Visit your bank’s website or call them if you’re not sure.
If your bank isn’t FDIC insured, then consider moving your money to one that is.
Similarly, Credit unions are insured by the National Credit Union Administration which protects your money up to $250,000, so these deposits also continue to be protected.
For those looking to open new bank accounts, make sure that they are FDIC or NCUA insured accounts.
You can use the BankFind Suite tool to find FDIC-insured banks and the NCUA’s Credit Union Locator tool to find NCUA-insured credit unions.
What’s the difference between a credit union and a bank?
Credit unions and banks both offer savings and checking accounts, among other products.
But credit unions are member-owned, not-for-profit, institutions with a mission to support the financial health of their members, which can translate into lower fees and better terms than their for-profit siblings.
What should I do now?
Confirm that your money is with an FDIC or NCUA insured institution, and, if so, relax. Bask in the knowledge that your money is safe. If not, then move it to one that is insured.
If you’re a fortunate soul with over $250,000 in individual accounts at one bank, then consider moving funds over the insured $250,000 to a different financial institution, so that it’s also protected in the event of financial catastrophe.
Although, as Adriana Morga reports for the Associated Press, even people with uninsured deposits usually get nearly all of their money back:
“It takes time, but generally all depositors — both insured and uninsured — get their money back,” said Todd Phillips, a consultant and former attorney at the FDIC. “Uninsured depositors may have to wait some time, and may have to take haircut where they lose 10 to 15% of their savings, but it’s never zero.”
What if I have other investments with my bank besides cash?
Check out the FDIC’s Electronic Deposit Insurance Estimator to see how much of your money is insured per financial institution.
FDIC deposit insurance covers:
- Checking accounts
- Negotiable Order of Withdrawal (NOW) accounts
- Savings accounts
- Money Market Deposit Accounts (MMDAs)
- Certificates of Deposit (CDs)
- Cashier’s checks
- Money orders
FDIC deposit insurance doesn’t cover:
- Stock investments
- Bond investments
- Mutual funds
- Life insurance policies
- Municipal securities
- Safe deposit boxes or their contents
- U.S. Treasury bills, bonds, or notes
- Crypto assets
What happens if my bank does fail?
As long as your money is in an FDIC- or NCUA-insured account/institution, then you’re protected up to $250,000. From the FDIC:
“The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank. For example, if a person has a certificate of deposit at Bank A and has a certificate of deposit at Bank B, the amounts would each be insured separately up to $250,000. Funds deposited in separate branches of the same insured bank are not separately insured. The FDIC provides separate insurance coverage for funds depositors may have in different categories of legal ownership. The FDIC refers to these different categories as “ownership categories.” This means that a bank customer who has multiple accounts may qualify for more than $250,000 in insurance coverage if the customer’s funds are deposited in different ownership categories and the requirements for each ownership category are met.”
Historically, the FDIC says it has returned insured deposits within a few days of a bank closing. The FDIC will either provide that amount in a new account at another insured bank or issue a check.
Schedule a time to speak with a TrustPlus financial health and productivity expert about how TrustPlus can help your business or organization capture the benefits of a financially healthy workforce.