Over the past few days, we've been inundated by clients and website visitors with the same question:
In a single word: No.
National news outlets have done a superb job scaring the pants off of main street by reporting on the financial woes of Wall Street. Here's a recap of the players if you're scoring at home:
Understand Your Federal Protections
As for bank deposits such as checking accounts, savings accounts, and CDs, your assets are protected (up to $100,000 per bank) by the Federal Deposit Insurance Corporation, often referred to as the FDIC. This means, if your bank goes under, the FDIC will step in and replace every dime you held in deposits at that bank within a matter of days, up to the $100k limit.
Rest assured in knowing that no consumer in U.S. history has ever lost money that was on deposit in an FDIC insured institution. But how do you know if your bank has FDIC insurance coverage? Surf over to the FDIC's nifty online tool and find out asap. If your bank is not listed, then move your cash into an institution that is!
Will a Market Meltdown Liquify My Portfolio?
When discussing the stock market, there are two distinct concerns here:
On the other hand, if your accounts are all held at MEGA Brokerage (fictional) and MEGA Brokerage itself declares bankruptcy, then yes your assets are protected against total loss by the federal government and its Securities Investment Protection Corporation, or SIPC. Note that the SIPC also has limits: $500,000 in stocks, bonds, and mutual funds, and $100,000 for brokerage cash.
No Time to Relax
Please read the above four words carefully. They do not say "panic"...far from it in fact, these are the times for a heightened sense of awareness, to pay closer attention to bank account statements, and stay tuned in to your favorite news outlets. We're embarking on a prolonged period of national economic turmoil, and as a financial professional, I advise everyone to remain prudent and patient.
"If my financial institution goes bankrupt, will I lose the assets in my checking, savings, certificate of deposit (CD), brokerage, 401k, or Individual Retirement Account (IRA)?"
In a single word: No.
National news outlets have done a superb job scaring the pants off of main street by reporting on the financial woes of Wall Street. Here's a recap of the players if you're scoring at home:
- Washington Mutual
- Merrill Lynch
- Bear Stearns
- Morgan Stanley
- Freddie Mac
- Fannie Mae
- American International Group
- IndyMac
- Lehman Brothers
- ...and more to come
Understand Your Federal Protections
As for bank deposits such as checking accounts, savings accounts, and CDs, your assets are protected (up to $100,000 per bank) by the Federal Deposit Insurance Corporation, often referred to as the FDIC. This means, if your bank goes under, the FDIC will step in and replace every dime you held in deposits at that bank within a matter of days, up to the $100k limit.
Rest assured in knowing that no consumer in U.S. history has ever lost money that was on deposit in an FDIC insured institution. But how do you know if your bank has FDIC insurance coverage? Surf over to the FDIC's nifty online tool and find out asap. If your bank is not listed, then move your cash into an institution that is!
Will a Market Meltdown Liquify My Portfolio?
When discussing the stock market, there are two distinct concerns here:
- The market value of the stocks, bonds, and mutual funds in your portfolio
- The solvency of the custodial institution at which your portfolio is held
On the other hand, if your accounts are all held at MEGA Brokerage (fictional) and MEGA Brokerage itself declares bankruptcy, then yes your assets are protected against total loss by the federal government and its Securities Investment Protection Corporation, or SIPC. Note that the SIPC also has limits: $500,000 in stocks, bonds, and mutual funds, and $100,000 for brokerage cash.
No Time to Relax
Please read the above four words carefully. They do not say "panic"...far from it in fact, these are the times for a heightened sense of awareness, to pay closer attention to bank account statements, and stay tuned in to your favorite news outlets. We're embarking on a prolonged period of national economic turmoil, and as a financial professional, I advise everyone to remain prudent and patient.
Labels: Keys_to_Shine
