LOCAL BANKS
REMAIN THE SAFEST PLACE FOR YOUR DEPOSITS - HERE'S WHY
Recent bank failures like Silicon Valley and Signature are hot topics, dominating news headlines and social media threads. As a business owner, you probably have a lot of questions surrounding your own business accounts.
This brief guide has answers to some of the most common questions we’ve received from business owners in the wake of these failures and – perhaps more importantly – solutions to help make sure your business’s deposit dollars always remain safe and secure.
Two solutions, in fact.
But before we dive into these, it's important to understand a bit of the history of banking and some of the hard lessons that have been learned, starting with the significance of the FDIC.
To gain a better understanding of what’s happening now, a quick recap regarding the history of bank failures may help. After all, they’re the reason the Federal Deposit Insurance Corporation exists at all.
In the wake of the Great Depression, President Franklin Roosevelt signed the Banking Act of 1933. Part of this act established the FDIC in response to thousands of banks that went under during the 1920s and 1930s.
At the time of its inception, the FDIC decided to insure all bank deposits up to $2,500 to help prevent the bank runs that took down so many financial institutions. They quickly realized that wasn’t enough and upped the limit to $5,000 just six months later. It’s been raised six more times since then, most recently in 2008 when it went from $100,000 up to $250,000 per depositor, per insured bank.
Since the program’s inception nearly 100 years ago, no person or business has ever lost a single penny of insured money in the event of a bank failure. That’s important to remember, so keep it in the back of your mind for now.
The FDIC also examines banks to ensure compliance with rules and regulations to protect consumers and communities served. To protect depositors, the FDIC responds immediately when an insured financial institution fails.
The FDIC offers this tool to help you determine if you have sufficient insurance coverage on your deposit dollars.
