Wednesday, July 16, 2008

Bank Failures

If a bank fails ,what happens to a persons brokerage acct. ,if they have that with the bank also?

Posted by Mike at 7/16/2008 01:24:00 PM

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2 comments:

Ed Black said...

A difficult question to answer!

The Bank FDIC covers up to $ 100,000.00 per account with $ 250,000.00 for IRA accounts.

Brokerages carry SPIC Insurance which typically covers $ 500,000.00, although some Companies carry more insurance that that.

CD’s that you obtain through your broker, at one time, permitted FDIC coverage, in some instances, however, especially higher yielding certificates were in some cases exempted from FDIC coverage and this should have been discussed prior to your investing any money. Ask for clarification if the SPIC covers such CDs.

MAKE certain, look at your statement and if the question persists, CALL the company, request the mail data on what coverage they provide.

Now is the time to reevaluate and make certain you are protected. Typically any amount over the $ 100,000.00 will provide for a recovery of only $ .50 per dollar over that stated limit.

Please take care.

Ed

Jul 17, 2008, 1:26:00 PM
Mike said...

Thanks Ed,

Jul 17, 2008, 6:34:00 PM

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