Annoying Problems

Should I Take My Money Out of the Bank?

Jul 27, 2008 Finance

We all heard about IndyMac Bank, one of the nation's largest lender, closing its doors and people lining up to draw their money out of the bank.  People are getting worried about their deposited money at the bank because of IndyMac's failure.

"In the FDIC’s 75-year history, no customer has ever lost a
single penny of insured deposits"

So should you be worried?

Well, many experts predict that more banks will fail in the next 12 months or so and I don't disagree with that.  But I wouldn't be worried about my money at all because I know my money is insured upto $100,000 by the FDIC.  If you have more than $100,000 deposited in one bank, you should consider spreading it out at different banks.  Don't make the mistake of putting money in different branches of the same bank though.

What's the worst case?

The worst case is not getting your money, not because the FDIC is not paying you, but because your bank is not insured by the FDIC.  There are banks that are NOT insured by the FDIC.  Even the ones that claim they are insured by the FDIC could be lying to you.  Use the FDIC's Bank Find tool to find out if your bank is insured or not.  If your bank is not listed there, take your money out and RUN!

How long does it take to get my money back from the FDIC?

There are people swearing that it take up to 99 years to get your money from the FDIC.  It is a hoax based on absolutely no evidence.  According to the FDIC, it usually take a few days of a bank's closure, either by check or by deposit at another bank.

What should I do from here?

First of all, stop worrying about your money at your bank.  Don't take out the money.  Leave it there!  Tell your friends about it using some of the terms used by the FDIC and they will look up to you.

This is a great time learn about the FDIC and how your funds are insured by the government.  I'm going to post some of the most important links from the FDIC's website.  Visit the links and learn as much as you can.  Remember, fear comes from lack of knowledge.

Deposit Insurance Coverage FAQ
Get your deposit insurance coverage questions answered.

When a Bank Fails
Learn about the FDIC's role when a bank fails.

Insured or Not Insured?
Learn which bank products are insured and not insured.

The FDIC Call Center
Get your questions answered.

EDIE - Electronic Deposit Insurance Estimator
Allows you to calculate the insurance coverage of your accounts at each FDIC-insured institution.

Tags: banking, money, personal finance