Over the last week, many of our clients have called and asked if they should be concerned about banks and deposits. While we don’t offer opinions on the stability or solvency of any particular financial institution, we wanted to provide information about these events and FDIC insurance limits.

On March 10, Silicon Valley Bank (“SVB”) became the largest bank to collapse since the 2008 global financial crisis. SVB’s collapse prompted Signature Bank customers to withdraw more than $10 billion in deposits, leading regulators to take control of Signature Bank.

Both of these banks were insured by the FDIC.  However, due to the composition of their client base, a larger-than-average percentage of deposits at these two banks exceeded the FDIC $250,000 limit.  Under the systematic risk exception, the US government assured depositors of these two banks that all deposits will be covered by FDIC, even deposits exceeding the $250,000 FDIC limit.

As a general rule, bank deposits at FDIC-covered institutions are insured for up to $250,000 per depositor.  This includes deposit accounts such as checking, savings, money market accounts, and certificates of deposit.  This doesn’t include other types of investments or investment funds, even if those investments are held by an FDIC institution.

The $250,000 limit is per depositor and per financial institution.  If you have accounts at multiple banks, you generally have a $250,000 limit at each bank.  If you have multiple accounts at the same bank, there is a single $250,000 limit.

Here are a few resources that explain FDIC limits:

• Bankrate – 7 Best Ways to Insure Excess Assets
  • https://www.bankrate.com/banking/savings/ways-to-insure-excess-deposits/
• FDIC Deposit Insurance
  • https://www.fdic.gov/resources/deposit-insurance/
• CNBC – What to Know about FDIC Coverage
  • https://www.cnbc.com/2023/03/13/what-to-know-about-fdic-coverage-after-svb-signature-bank-failures.html

As always, contact your Dent Moses advisor with questions.