A line of clients outside the entrance to Silicon Valley Bank's headquarters in Santa Clara, Calif., March 13, 2023.
The news here is mostly good, since entities like the Federal Deposit Insurance Corp. and the Securities Investor Protection Corp. offer hundreds of thousands of dollars of guarantees.Here are some answers to questions you may have about checking accounts and about money at investment firms. We’ll also suggest a few steps you might take even if the tumult subsides. Shoring up defenses — and having a few backup plans — is just good financial hygiene.
If you don’t have enough insurance to cover your balances, you may still get some or most of that uncovered amount back. But it could take years for the FDIC to sort it out as it winds down a failed bank’s operations and sells its assets.According to the FDIC, if another financial institution acquires the failed bank right away, the deposits should land in your new account without incident. Bridge banks should have the same abilities.
But if you had two individual brokerage accounts at the same firm, for instance, you would receive only up to $500,000 in protection for both. A married couple with a joint brokerage account — as well as two individual brokerage accounts at the same firm — would receive an additional $500,000 in coverage for the joint account.SIPC says on its website that it is important to understand that its coverage “is not the securities world equivalent of the Federal Deposit Insurance Corporation.
SIPC does not cover unregistered investment contracts, unregistered limited partnerships, fixed annuity contracts, currency, and interest in gold, silver or other commodity futures contracts or commodity options, according to SIPC.Shares of Charles Schwab, the giant retail brokerage, plunged on fears that it, too, could be swept up in the crisis. The stock fell as much as 23% on Monday before closing down more than 11%.