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Given the sixth rise in interest rates by the United States Federal Reserve, some see more possibilities for an economic recession to occur in the coming months.
Now that the Federal Reserve has raised interest rates for the sixth time so far in 2022, the fear of an economic recession is more latent for some experts and economists. This situation can make some people nervous, who do not know what to do with the money they have saved. Should it be kept in the bank or not? Are banks protected? Who protects them? In Takecareofmoney we explain it to you.
There is a financial phenomenon called a bank run. This implies that many people go to their banks to withdraw money in a short period of time, which will inevitably affect nosy institutions. This is the case of what would happen if people get nervous about the possible arrival of an economic recession in the country.
According to experts, what you should do is carry out your banking operations with a financial organization that is insured by the Federal Deposit Insurance Corporation (FDIC) , which will reduce the chances that you will lose your money if there is a run banking.
“In fact, your money is safer in the bank during a recession than as cash stored at home, where it’s vulnerable to theft, fire, and other dangers,” the experts at Moneycrashers explain.
How to know if your bank is insured
It’s very easy to find out, just look for the phrase “Member FDIC” on your bank’s website or in its advertising. And if you have doubts, you can call and they should give you the information directly.
Being insured with the FDIC means that you have the protection of the United States government. However, the insured products have certain limits. The covered products are:
- Savings accounts
- Money market accounts
- Certificates of deposit, known as CDs
- Compliant prepaid cards
Coverage limits are also established: for the FDIC standard, it is $250,000 dollars per institution, per property category, which refer to the manner or form in which you are keeping your funds.
Some categories of property can be:
- Unique or individual property. Refers to when you are the sole owner
- Joint ownership, when there is an agreement between married people
- Business accounts
- Trust accounts
- Individual retirement savings accounts called IRAs
- Employee benefit accounts
What are the products that are not insured?
According to MoneyCrashers, these are:
- Stocks and exchange-traded funds (ETFs)
- Investment funds
- Corporate and government bonds
- Life insurance policies and annuities
- Safe deposit boxes for precious metals, jewelry, paper stock or bond certificates and other valuables
Which banks are insured
Some of the United States banks that are insured with the FDIC are:
- Bank of America
- Wells Fargo
- JP Morgan Chase & Co
- Citigroup-Goldman Sachs Bank USA
- Morgan Stanley
- Bank -First Republic Bank
- Preferred Bank
- Summit State Bank
- US Century Bank
- Northeast Bank
- Harford Bank
- Hingham Institution For Savings
- Cadence Bank
- Systemic Savings Bank
- First Bank
- The Bank of Princeton
- Signature Bank
- Medallion Bank