In light of recent financial shocks in the banking sector of a magnitude not seen since the Financial Crisis, experts are talking about $250,000 as the key number for bank deposits.
Those who have more than $250,000 deposited at Silicon Valley Bank and Signature Bank are now exempt from the rule, according to the government.(Photo: Rappler)
Government recently made an exception for people with deposits of more than $250,000.
That is the amount that bank depositors should be aware of when determining whether or not their money is insured by the Federal Deposit Insurance Corporation, or FDIC. Coverage limits apply to each depositor, ownership category, and bank.
Deposits under that amount are protected, whereas funds above that amount may not be protected if an unforeseen event occurs at a financial institution.
However, the government recently made an exception for people with deposits of more than $250,000 at Silicon Valley Bank and Signature Bank.
The FDIC might once more guarantee deposits greater than $250,000.
President Joe Biden stated on Friday that if further instability occurs, the FDIC may once again guarantee deposits in excess of $250,000.
Congress established the $250,000 threshold in 2010. According to some experts, this is insufficient and should be increased.
The limit can be temporarily suspended by Congress. Treasury Secretary Janet Yellen, on the other hand, has stated that uninsured deposits should only be covered if “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences.”
Most consumers do not have to be concerned about their deposits.
“If you have less than $250,000 in a bank account, you are fully insured,” said Jill Castilla, president and CEO of Citizens Bank of Edmond, a community bank in Edmond, Oklahoma.
“It’s just that when you start to see those limits, you may have some exposure,” Castilla added.
Even if you exceed the $250,000 limit, experts say there are still ways to obtain FDIC coverage.
Look for institutions that guarantee higher deposits.
The FDIC insures deposits up to $250,000 per depositor, per FDIC-insured bank, and per ownership category. However, certain financial institutions may be able to get around these restrictions by collaborating with other financial institutions to guarantee higher deposit levels.
Citizens Bank of Edmond provides additional coverage through the IntraFi Network, with a depositor limit of $150 million.
“If you can use IntraFi, you don’t have to go to another bank to get another $250,000,” Castilla explained.
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