In today’s world, it’s important to know that your money is safe and secure in the bank you choose. The recent collapse of Silicon Valley Bank highlights the importance of having financial protection for your deposits. Here’s a quick recap of what happened to the bank if you don’t know.
@xoxoreni Let’s talk about Silicon Valley Bank and how it impacts you. Go and check if your financial institution has CDIC or FSRA coverage if you’re in Canada, and FDIC if you’re in the US. Was this helpful? #fintok #svb #siliconvalleybank #fdic #cdic #fsra #bankingtips ♬ original sound – Reni, The Resource
Although the customers of Silicon Valley Bank were bailed out this time, there were still two important lessons to be learned about where to keep your money.
1. No Insurance? No Money.
When it comes to opening a bank account, it’s essential to consider the safety of your money. That’s where organizations such as CDIC, FDIC, and FSRA come in. These organizations provide insurance protection for your deposits, so if your bank were to fail, you wouldn’t lose your hard-earned cash.
🇨🇦 In Canada, you should look for banks that are members of the Canada Deposit Insurance Corporation (CDIC) and credit unions that are members of the Financial Services Regulatory Authority of Ontario (FSRA). CDIC insures eligible deposits at member institutions up to $100,000 per depositor, per insured category and FSRA up to $250,000. Eligible deposits include savings accounts, chequing accounts, term deposits such as Guaranteed Investment Certificates (GICs), and certain types of debentures issued by member institutions. You can learn more on the CDIC website.
🇺🇸 In the US, look for banks that are members of the Federal Deposit Insurance Corporation (FDIC). The Federal Deposit Insurance Corporation (FDIC) was created in 1933 in response to the Great Depression, with the purpose of protecting depositors in the event of a bank failure. The FDIC is an independent government agency that provides insurance coverage to depositors in the event of a bank failure, up to $250,000 per account. Learn more here.
🇳🇬 In Nigeria, look for banks that are members of Nigeria Deposit Insurance Corporation. Learn more here.
Why is this important? Not all financial institutions have insurance and if they don’t, if they go down, your money is gone too. Don’t get caught in their mess.
2. Once You’re Over The Threshold, Get Out!
Never keep your eggs in one basket. There are many insured financial institutions out there, so don’t limit yourself to one. Once you’re over the threshold of insurable funds, it’s time to search for a new institution to give your money.
For example, if you have a savings account at an FDIC-insured bank, and the total balance of your account is $300,000, in this scenario, you would only get $250,000 of that money back is they went belly up. Imagine $50,000 just disappearing like that. I’m sick to my stomach just thinking about it.
Instead, if I had $300,000, at least $50,000 would be in another FDIC-insured bank.
Last last, wherever you choose to bank, it’s essential to make sure that the bank you choose has this type of coverage. This is especially important for newcomers to the country who may not be familiar with the banking system. So, it’s always a good idea to do some research before opening a bank account and to make sure that your bank has this type of insurance protection. It’s also crucial to monitor the financial health of the banks you have deposits with and make informed decisions about where to deposit your money.
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Here is an article outlining some of my favourite Canadian banks, check it out. All CDIC member institutions, dw.
Thank you for this Reni
Thanks for reading, Victoria! Appreciate you.