What if your bank turns IndyMac on you?

vagabond · 07-15-2008, 06:40 AM

I hope your bank is safe and financially sound. Sometimes, mob mentality panic makes a bad situation worse, so resist the temptation to withdraw money from your bank just because those people at IndyMac are lining up to withdraw theirs. And now is a good time to check on the $100,000 FDIC insurance.

Quote:

From Associated Press:
CHARLOTTE, N.C. - The government's seizure of IndyMac Bank raises concerns for many consumers about whether their banks might be next.

While it is unlikely the nation will see thousands of banks fail as they did during the savings and loan industry collapse in the late 1980s and early '90s, analysts predict there will be more battered financial institutions that are unable to survive in today's marketplace.

"IndyMac's failure is certainly a broader issue," said Eva Weber, an analyst at Aite Group, a financial services research firm. "Those who are trenched in more risky business, who are feeling more heavy losses, may be at more risk."

What if your bank fails? - Personal finance - MSNBC.com

jban642 · 07-15-2008, 07:07 AM

Just remember that each account is insured up too 100,000. Diversify the accounts. Don't put too much money in one back spread it around.

rickair7777 · 07-15-2008, 07:57 AM

Quote:

Originally Posted by jban642

Just remember that each account is insured up too 100,000. Diversify the accounts. Don't put too much money in one back spread it around.

Exactly.

1) Make sure the bank is FDIC insured (not all are).
2) Find out what the insurance limit is for your type of account.
3) If you have more than the limit on deposit, move some money to another (or several other) banks so that it's all covered.

There different limits for several account types, and some investments are not covered at all. Make sure you know what applies to your situation.

EngineOut · 07-15-2008, 09:40 AM

Quote:

Originally Posted by vagabond

I hope your bank is safe and financially sound. Sometimes, mob mentality panic makes a bad situation worse, so resist the temptation to withdraw money from your bank just because those people at IndyMac are lining up to withdraw theirs. And now is a good time to check on the $100,000 FDIC insurance.

Unfortunately, I don't have more than $100k in my bank to worry about

Phuz · 07-16-2008, 08:49 AM

How long do FDIC Payouts take if your bank goes under? I heard it can be several years, not sure if thats true.

vagabond · 07-16-2008, 11:01 AM

Three points:

1) In addition to checking the soundness of your bank, please be sure to inquire about your credit union. Also check about coverage for each account and your ownership rights in each account. For example, share accounts have different coverage than an IRA/Keogh account, so you could potentially have more than $100,000 in the same credit union and still be fully covered.

2) I don't know about the FDIC and how long it takes to make the payouts, but credit unions are insured by the FDIC-equivalent called the National Credit Union Share Insurance Fund (NCUSIF) and historically, funds are available to members within just a few days after the closure of an insured credit union.

3) Federal insurance comes into play when a bank or credit union finds itself in trouble. It could happen to any institution, but many are quite sound and safe.

Caveat: this is NOT legal advice and should not be so construed.

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