@xenon3030 wrote:
Do the major banks like Chase, BOA, Citi, Discover, USB, etc. have FDIC insurance on their checking/saving accounts? Does the accunt type matter e.g. Money market saving or just saving?
The concern is in case of possible economic recession, which accounts are getting impacted (CC, checking/saving, stock, etc.)? How should the risks get mitigated for personal matters? Is there any recommendation?
I am fairly confident that banks of that size have FDIC Insurance. FDIC Insurance isn't a requirement for a bank to do business, but it's more about staying competitive amongst other banks. For the most part, all deposit accounts have FDIC coverage. This includes checkings, savings, money market DEPOSIT accounts (not money market MUTUAL FUNDS), certificates of deposit, etc. What is NOT covered can include mutual funds, stocks, bonds, and most other investment vehicles.
A general rule of thumb is that each person per account type per bank is covered up to $250k. For example, I have a single-party savings account at my Financial Institution that has a balance of $250,000. I also have a joint checking account with my wife that has a balance of $500,000. Because those are two different account types and ownership styles, out maximum collective FDIC Coverage is $750,000. We are fully covered at this financial institution. Even a penny more would be uninsured by FDIC.
But what if I have more money than $750,000, but I also want to keep it insured? I go open up another account at another financial institution. Let's say I open up the exact same accounts, I now have $1.5m worth of coverage. So on and so forth. There are other types of accounts you can open, to allow for more FDIC coverage. For that, you can play with EDIE. It's a tool provided by FDIC that allows you to calculate your coverage. https://edie.fdic.gov/calculator.html
FDIC typically will take place upon bank failure. This is when the bank's liabilities are greater than bank assets. Most people will never have to worry about FDIC insurance. A lot of times, people have it and don't realize it, but if you ever come in to large amounts of money, it's definitely worth shifting it all around to maximize your coverage.
Fico8: EX~EQ~TU~810 (12 month goal~840).
