I can't believe I'm having to post this: If you have money in a bank, how safe is it?

[DeepModem Mom]

We knew in December, '01, it would be bad, but did we have any idea Bush/Cheney/Rove would steer us into such disaster, on so many fronts?

WP: What to Know About Your Accounts
Wednesday, July 16, 2008; A10

Consumers have lots of questions about their bank accounts in light of the troubles at IndyMac and other institutions. Staff writer Nancy Trejos sought some answers.

Q If you have money in a bank, how safe is it?

AIf you have $100,000 or less in your name in any one bank, you have nothing to worry about. The Federal Deposit Insurance Corp., an independent agency of the federal government, will insure up to $100,000 per depositor per insured bank or savings association. That said, there are ways to protect more than $100,000 even if it's all stashed in one bank, depending on the account's ownership category. The most common categories are single accounts, joint accounts, certain retirement accounts and revocable trust accounts. If, for example, you have a single account under your name and a joint account with different names on it, you might be able get insured for more than $100,000. "There's a variety of scenarios that you can come up with to the maximum insurance for that person," said LaJuan Williams-Dickerson, a spokeswoman for the FDIC.

And if you have certain types of retirement accounts, you could get even more insurance. Individual retirement accounts, or IRAs, for instance, are insured up to $250,000 per depositor per insured bank.

Williams-Dickerson said each person's situation is different. She advises any consumer who wants to calculate his or her insurance coverage beyond $100,000 to go to http://www.fdic.gov and click on the Electronic Deposit Insurance Estimator, also known as EDIE. You can also call 1-877-ASK-FDIC.

If that's not reassuring enough, talk to the branch manager at your bank, said Bert Ely, a banking consultant in Alexandria. "Explain the situation and say, 'Here are my accounts, the type of structure they're in. Do I have any exposure?'"

What exactly does the FDIC insure? What does it not insure?...

What if you have uninsured funds? What happens when a bank fails? Do you have any hope of recovering that money?...

What happens immediately after a bank fails? Even if your money is insured, can you access it if the bank has closed? Will the ATMs work?...

Are there any warning signs that a bank is about to go under?...

What, if anything, can you do now to protect your money?...

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/15/AR2008071502669_pf.html

[BrklynLiberal]

1. Gee. I wish I had over $100,000 to worry about.

[realisticphish]

3. haha no kidding

my retirement account is $101.65 at the momemnt

[realisticphish]

2. i have national city

(though i'm leaving them shortly, because they're a bunch of bastards) and my mother called me in a panic, telling me to get my money out because of the stock plunge they had. I had to explain the FDIC to her; she knew what it was of course, but i guess she didn't think about it

[Donnachaidh]

4. People should ALSO be asking -- will the FDIC be able to cover EVERYONE?

I'd like to know exactly WHAT the FDIC has in place in order to have to cover thousands of people who could potentially be losing their savings with this bank situation.

Seriously -- does the FDIC have gold or some other form of currency yo actually back up the promises? Or Has ANYONE in the MSM looked into this?

[SoCalDem]

18. IMD's default will tap 25% of the FDIC "reserves"..

and supposedly there are over 90 banks on the endangered list :scared:

[sendero]

21. Treasury will print money..

... if it has to. FDIC will pay.

[Vincardog]

5. The real question is how much money will it cost to live? FDIC insurance will not mean much when it

costs $100,000 for a loaf of bread

[izquierdista]

6. What is interesting

Is that the $100,000 limit for insured funds has not changed since the 60's. It could be earlier, but I remember as a small child going to the bank with my mother and being reassured that my savings account would be insured up to $100,000. That was going to be a lot of deposit bottles at 3 cents and big bottles at 5 cents.

One would think that the figure would be adjusted for inflation. Back in the 60's, you could buy several houses for $100,000 and now it is just a down payment.

[Frustratedlady]

8. Are you sure it wasn't $10,000?

That's what sticks in my mind, but I may be all wet. At that time, it seemed like a lot of money to me.

[izquierdista]

13. You are right

I guess my memory was not so good. Still it was a lot of deposit bottles! The following are from the Cleveland Federal Reserve Bank:

Year Limit
1934 5,000
1950 10,000
1966 15,000
1969 20,000
1974 40,000
1980 100,000

Still, 28 years without an adjustment is a bit long, considering the change in the value of the dollar.

[Tab]

7. The problem isn't 'will it ultimately be safe'?

Because that's what the FDIC is supposed to alleviate. The run on IndyMac likely wasn't people with $90k in the bank, it was more likely people with $2000 or whatever or less (maybe just a hundred or a few hundred) that need that money NOW to live on, pay the rent, buy food - whatever. Especially if they don't have a credit card (or room on one) they can't afford to sit around waiting for the FDIC to restore their money - and if they're unemployed and really tight on cash, it's even worse. If my money supply was suddenly choked off, I'd be pretty anxious too. Whether buying gas for my car to get to work, or buying even $10 worth of groceries for dinner, to have that all frozen would create immense problems.

Chances are that if I had $100k in the bank, which I don't, I'd have other resources as well, scattered about, that I could draw upon.

[PassingFair]

9. An excellent point.

So far, their funds have been frozen for 2 days.

I heard a TV announcer on one of the videos claim
that he had been able to use his ATM card to withdraw
$200, but that he couldn't access information about
his balance.
Then, he said that he could not access his accounts
on line....his accounts were with IndyMac.

Another poster here on DU wrote about her Savings & Loan
closing in the late 80's. She said that the feds went in,
escorted the bank officers OUT, and spent Friday, Saturday
and Sunday clearing out the accounts, and sending checks
out to the depositors.

I'm with National City, who is on the "watch list" along
with other MidWestern banks. I'm going to withdraw about
a thousand to have on hand...just in case.

:)

[Tab]

10. That sounds prudent - and ominous

Ominous in how it speaks to our current confidence in our banking system.

I'm trying REAL HARD to believe this isn't happening, but I don't like the way the planets are lining up on this one. If we had a different administration, I might not mind, but for some reason I'm thinking they view this as an opportunity (for them, personally) and not a disaster. I hope to god I'm wrong.

[DeepModem Mom]

11. I had the same feeling, as I indicated, as I posted the OP -- like I'm entering a world...

I haven't seen in my lifetime. That said, I'm close to businesspeople, and while they exhibit very real and varying degrees of concern, and are responding, I don't see them anywhere near panicked, or considering any drastic measures.

[Raven]

12. Keep your accounts (if you are fortunate enough) in any one

bank under $100,000. Keep enough cash on hand to support yourself for essential things for at least 1 month. Keep your credit card balances down if you can. Keep your job. Keep the faith. We'll ride this out if we stick together and don't panic and get every warm body to the polls in November for the Democrats...and then...keep their Goddamned feet to the fire after that.

[DeepModem Mom]

14. Thank you, Raven, for wise advice to all. nt

[aint_no_life_nowhere]

15. How long does it take on average for the FDIC to pay out an account in full?

Are we talking about a few days, weeks, or months in the average case?

[Tab]

16. Someone else posted about the s&l scandal

which might have been managed by a different agency, but they said everyone had checks by the next business day or something like that. However, if that was your only bank, now you have to go out and open an account somewhere else to cash the damn thing... it's going to account for a few days delay no matter what.

[kath]

17. Ah, there's the rub -- from what I understand, it can take quite a while to get access to your money

[trof]

19. And how about money market accounts?

I don't think mine is insured at all.
Hmmmm

[readmoreoften]

20. One more question. For online bankers who don't get paper statements. How do you prove your loss

when--oopsies--the servers of all the failed banks go down due to "angry hackers" (or some other made up excuse)

[DeepModem Mom]

22. Kicking to see if someone has answers to some unanswered questions in the thread. nt