FDIC Insured Amounts
To help with that confidence, the FDIC has generally stated that the first $250,000 per depositor, per insured bank for each account ownership category is insured. This means that even if banks fail, the government guarantees depositors will get the $250,000 back. Thus, if you were a Silicon Valley Bank customer that had FDIC insurance coverage, you were not in danger of losing your cash. Here is a summary of the type of coverage by account ownership.
|FDIC Deposit Insurance Coverage Limits by Account Ownership Category|
|Single Accounts (Owned by One Person)||$250,000 per owner|
|Joint Accounts (Owned by Two or More Persons)||$250,000 per co-owner|
|Certain Retirement Accounts (Includes IRAs)||$250,000 per owner|
|Revocable Trust Accounts||$250,000 per owner per unique beneficiary|
In order for banks to receive protection, they must disclose to consumers they are FDIC-insured. If consumers are unsure whether their money is federally insured, the FDIC has a tool to help, The Electronic Deposit Insurance Estimator. It can help figure out on a per bank basis by account type how much is insured.
Silicon Valley Issue
The rapid loss of confidence in Silicon Valley Bank could be attributable to many deposits being above the $250,000 limit. A recent report filed with FDIC showed that only 5.69% of the Silicon Valley Bank deposits held in the US were insured.
Effect on Investment Portfolios
For now, it’s important to review two things:
- Current account ownership and
- Current bank balances
Assuming the account balances are within the appropriate limits based on account ownership, you should feel comfortable that the current situation is under control. We continue to advise individuals to worry about the things that are within their control. Ensuring that your applicable bank deposits are appropriately insured falls into that bucket. Please let us know if you have any additional questions about this situation.