Recent fiasco of Washington Mutual, its seizure and sell out that has been all the media, as well as other reports of failing banks and financial services companies that go bankrupt have probably made you wonder, are my assets safe? What will happen to my Washington Mutual Checking and Savings Account? How will the Washington Mutual takeover affect my CD rate? How will that affect my Washington Mutual credit card? What will happen to savings rates on my Washington Mutual account? Is it safe to deposit money in Washington Mutual? Is the money I have in my Washington Mutual account safe? Should I withdraw money from my Washington Mutual checking account? What will happen to my Washington Mutual home loan and do I have to pay my mortgage on its due date? What will happen to my Washington Mutual home equity loan? Will my rates change?
Understandably, you have many concerns about what this could mean for you and your assets held at Washington Mutual. Most importantly, you want to know if your money is safe at your Washington Mutual account. The information below explains to you how FDIC and other entities work to protect your assets held in banks, including Washington Mutual.
FDIC
The FDIC, an abbreviation for Federal Deposit Insurance Corporation, insures deposits placed in banks and in other financial institutions that are members of FDIC. Washington Mutual is or was a member of FDIC and if you look at your bank account statement it shows a little icon that stands for member of FDIC.
The FDIC is backed by the U.S. Government. In the event a bank fails, which we just witnessed a few days ago in the case with Washington Mutual, the FDIC will insure the deposited funds up to the established limits.
The basic amount of the FDIC insurance is $100,000 per account holder per each insured bank. In this case, if you hold up to $100,000 in one insured bank, your money is backed in full by FDIC. If you have substantial funds to hold, a good option would be to spread that money between different insured banks, so that at each bank you can have up to $100,000. However, certain retirement accounts, for instance Individual Retirement Accounts, are insured up to $250,000 per account holder per bank.
The FDIC insures all deposits at insured banks, including checking and savings accounts, high yield accounts, such as money market accounts and certificates of deposit (CDs), up to $100,000. It is important to understand that FDIC insures an account owner for up to $100,000, and not the individual account. For instance, if you have had more than one account at Washington Mutual, or any other bank or a financial institution, you may have had more than one account on your name. Many people prefer to have a checking and a savings account at the same bank and transfer money from their savings account to their checking account as needed for purchases and other expenditures. You may, in addition to your savings and a checking account, also have a money market account at the same bank. Your entire portfolio at that bank, provided that the bank is a member of FDIC is ensured for up to $100,000, and not each single account.
If you have more than $100,000 in cash that you want to hold at the same bank, you may want to spread that money between the members of your family, or form a legal entity such as a corporation to be a separate account holder.
The money you invest in stocks, bonds, mutual funds, money market mutual funds, life insurance policies, annuities, municipal securities, are speculative investments and are not insured by the FDIC. Even if you obtained your money market mutual funds at a bank branch, your money is not insured by FDIC.
For more detailed information, look up FDIC
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