When someone told me she couldn't eat breakfast yesterday because of the history-making day on Wall Street, I knew that panic was officially in the air. The economy has certainly seen better days and it's very possible that we haven't seen the worst of it, and some of you have expressed concern about keeping your money in a particular bank and selecting the safest bank possible to service your accounts.
I cannot predict how far the crisis in the financial sector will go or the lasting effects on the global economy, but I can offer some reassuring information in terms of your personal banking situation. Learn more about banking in today's economy when you read more.
The FDIC is still your friend, as it continues to insure deposits in affiliated banks like it has done since the Great Depression. FDIC insurance covers deposits up to $100,000 for individual and joint accounts at each bank, and IRAs can be insured up to $250,000. Joint accounts are insured up to $100,000 per account holder, so if neither owner has other accounts at the bank the joint account would be insured up to $200,000. If you're looking for a bank or wondering if you should be, first double check that your bank has FDIC insurance.
While the majority of the big trouble has been limited to investments and left the FDIC out of the picture, it's true that Washington Mutual could be on the brink of failure. If this occurs the FDIC's funds could be drained from covering WaMu's customer accounts, in which case the FDIC would probably ask the US Treasury for funds to continue protecting depositors. Reevaluate the safety of your bank, but there's no need to start keeping your money under your mattress.