What the collapsing of banks right now means for the future

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Avatar for Jack216
1 year ago

What the collapsing of banks right now means for the future

In today's article, we are going to go over exactly what the failures in banking right now mean for the future. We are going to cover what it means from an investor standpoint all the way to the regular person using a bank to save money in a saving account. So be sure to thoroughly read the article because it has something for everyone. If you want to read more about specifically what the collapse of silicon valley bank means for the financial markets then you can start reading by using the link provided. So without furthermore let's get into today's important article.   

What the collapses mean for the average person

Let's first start off with what this all means for the common person. Now If you are someone with less than $250,000 in your bank account then you shouldn't worry too much. FDIC insurance covers banks with bank accounts that amount to or less than $250,000. Most Major and even some small banks in the United States are covered by FDIC insurance. So what you can take away from this is that your money is safe in your bank account in the case that your bank collapses or fails. However like I stated before some banks are not covered by FDIC insurance so it would still be wise to check to see if your bank is covered by the FDIC.    

What the collapse means for retail investors

Now let's take a look at what this all means for retail investors. Now if you have an investment account opened through a bank that may or may not be protected by FDIC insurance. Most are not covered however some are covered under FDIC. However, if you have a retirement account such as a 401k or IRA through a bank you may be in luck because most are covered under FDIC insurance. However, it's best to check for yourself to see where your account stands with FDIC insurance. This is because it varies between most banks.      

What the collapse means for established investors

If you an established investor then I have some bad news for you. The United States has made it clear that It doesn't intend to protect any established investors connected to the failure of banks. So if you have any money invested into the banks or any unprotected securities through them it might be safe to try to figure out a way to safely move your money. Now I'm not saying more bank collapses are to come because to be all honest I can't predict if that's going to happen. Only the bankers would know but what I can say is that macroeconomic conditions are not improving and only seem to be getting worse for the time being. So It would be wise right now to play it safe with your money and to either move directly into just holding cash or fewer risker assets such as precious metals, bonds, Etc.

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Avatar for Jack216
1 year ago