This is not a notice or warning coming from your local police department or neighborhood watch group. Some of you may surmise that since the community in which you live is gated or filled with educated professionals that this notice is simply not applicable to you. But this kind of bank robbery only requires you to posses a bank account or a credit union account. With 40 million and counting individuals unemployed, stimulus checks being handed out of $1,200.00 or more, and the United States Treasury pouring trillions of dollars into the economy, how do you know your money is safe? Here’s the skinny! Or as some would say, here are some facts!
Financial Institution Coverage
The Federal Deposit Insurance Corporation (FDIC) insures most consumer funds deposited into the bank, while the National Credit Union Share Insurance Fund (NCUSIF) insures most funds deposited into a credit union. In general your deposits are covered up to two hundred and fifty-thousand dollars ($250,000.00). What you should know is that not all banks are FDIC insured or covered dollar for dollar on your account.
Some banks may have FDIC insurance coverage for only a percentage of your money deposited. For example, a bank may have FDIC insurance coverage of only fifty cents on each dollar. Which means that if you have $100,000.00 dollars in your account you will only be insured or covered for up to $50,000.00 dollars of your total balance. Can you afford to lose fifty percent or any amount of your hard earned funds during a pandemic? Or, can you afford to lose fifty percent of your earnings when most Americans have less than three months of emergency savings in their deposit accounts? Bank robbery! Check to see if your bank is FDIC insured dollar for dollar.
Which Accounts are Covered
FDIC insurance covers all types of deposits received at an insured bank, including checking accounts, negotiable order of withdrawal (NOW) accounts, savings accounts, money market deposit accounts (MMDAs), certificates of deposit (CD) and other time deposits, and official items issued by a bank (such as cashier’s checks or money orders). Keep your deposits within these type of accounts.
Which Accounts are Not Covered
FDIC does not insure non deposit investment products, even if they were purchased from an insured bank, including annuities, mutual funds, stocks, bonds, government securities, municipal securities and US Treasury securities. Here is an interesting point: the contents of a safety deposit box are not insured by the FDIC. (Make sure you read the contract you signed with the bank when you rented the safety deposit box in the event that some other type of insurance is provided. Some banks may make a very limited payment if the box or contents are damaged or destroyed, depending on the circumstances.) Go in and speak with your banker immediately!
Check Your Coverage
FDIC and NCUSIF insure accounts under different categories at each financial institution. For example, one category is single ownership of deposit accounts while another is joint ownership deposit accounts. For accounts which are only in your name the sum of all your deposits at a single institution are insured up to $250,000.00. If you and your spouse have a joint checking and savings account at a bank your total coverage for the joint account is $500,000.00. This would also be in addition to the coverage you each have for any single owned accounts at the bank. Check on all your bank accounts to avoid being a victim of the next bank robbery.
Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC . Give2Get Rich, LLC 2020. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.
This article is part of our 2021 January / February Issue