BOSTON — Billy Gangemi was rattled when Silicone Valley Bank and Signature Bank collapsed earlier this year. Like the rest of us, he didn’t want to see a repeat of the 2008 financial disaster. But he trusts his bank and the FDIC guarantee his money is protected.
“Oh yeah, definitely worried. I’m hoping it’s not my bank next,” Gangemi said. “I don’t have much money in there but it should be insured for the little bit I have.”
Most experts say the SVB and Signature Bank failures will not result in a widespread financial meltdown, but Peabody Wealth Advisors financial planner Mike Murray said now is the time to make sure your assets are protected.
We hear that word all the time, but “diversify” doesn’t mean you need to spread your money around into different banks or investments.
If you like your bank, Murray said you may be able to diversify at that bank by using different account registrations.
“If you have a good banking relationship, you may be able to keep all your stuff in one place through different account registrations,” Murray said. “You can have an individual account that’s insured, you can have a joint account that’s insured, you can have a trust account that’s insured.”
MAXIMIZE WHAT YOU’RE SAVING
If you like to invest in low-yield certificates of deposit—or CDs—Murray said a financial planner can help you find the best bang for your buck.
“If a client is very conservative with CDs, we can offer them CDs from different banks,” Murray said. “Let’s look at a bank in Kansas, in Nebraska or Georgia and spread their risk out.”
Treasure Bills—or T-Bills—are widely regarded as low-risk and secure.
“Treasury Bills are very stable,” Murray said. “I think that market has had a little bit of disruption in the short term, but with the Federal Reserve coming out and backstopping these institutions and increasing liquidity, I think they’ve added a great deal of confidence to the capital markets.”
WHEN DO YOU NEED THE MONEY?
When protecting your assets, Murray said ask yourself when you’ll need to draw on your savings.
“If you’re a younger investor, there may be opportunities out there because of this disruption, much like in other financial disruptions. But if you need the money in a year or six months, you want to be as safe as possible,” Murray said.
FDIC ONLINE CALCULATOR
The Federal Deposit Insurance Corporation protects up to $250,000 per depositor, per bank, for each account ownership category. The FDIC has an online tool that will show you exactly what’s protected and what’s not. Just enter your banking information and the “Electronic Depositor Insurance Estimator” tells you what’s insured and what exceeds coverage.
“Protection is the number one concern of anyone who has a large sum of money in the bank,” Murray said. “I think this is a time for people to make sure they have all their ducks in a row.”
This is a developing story. Check back for updates as more information becomes available.
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