We have all been made aware of the recent news regarding SVB and the possibility of individuals losing their deposits that exceed the FDIC insured limit. Given that this limit is not particularly high, there are concerns regarding whether individuals will lose all of their funds that exceed the insured limit.

What options are available to individuals who hold funds exceeding the FDIC insured limit for a single account? Apart from maintaining accounts across multiple banks, are there any other viable alternatives? TIA.

In: 1

FDIC is insurance that pays out of a bank fails up to 250k per account.

So that’s all that the bank is insured for.

However when the bank goes it doesn’t automatically mean there is no money. it’s like a normal bankruptcy.

So all bank assets will be sold (assuming no bail out or corporate buy out etc)

This likely means most people will get some of their money back. But we won’t know exactly how much because it will depend on how much money can be reclaimed.

Technically though because these accounts are only insured up to 250k everyone who has more than 250k in the bank can lose the difference.

If you have enough money for the FDIC limit to matter, you probably want to keep most of it in investments, not a bank account. If keeping that much money in a bank account *is* what you want to do, then yes, you have to split it across multiple institutions or accept the risk of losing it.

>Given that this limit is not particularly high

Why do you say this?

According to the data [here]( (for 2019) the median amount Americans have in savings accounts is $5,300. Even for people earning $90-100k (the highest group shown) median savings are $70k, and average $230k.

So only a tiny proportion of people will have enough for the FDIC limit to matter. Those who do, and want to keep it as bank savings, should probably just set up another account with a different bank. It’s not like that’s particularly hard.

(Note that most of people’s wealth, especially in older groups, is in pensions and property, so there’s a big difference between bank savings and total financial wealth.)

The US limit is actually higher than the UK (£85k) or the EU minimum (€100k)