Twitter   RSS   Email  

Curtis Ophoven's eBooks

 Why America May Never Recover From the Recession


 Save Money Homeschooling


How to Protect Your Money If Banks Being To Fail

By: Curtis Ophoven

8/20/2008 - 5 Comments

If major US banks begin to fail, as reported in the LA Times today, what is your strategy to preserve your money?

The LA Times article Fears bloom on rumors of pending bombshell in financials, says;

“All the talk in the credit markets this week is that another big bomb is about to go off in the financial system. .. Fears of a mega-failure were amplified Tuesday after Kenneth Rogoff, former chief economist at the International Monetary Fund, predicted in a speech in Singapore that a huge U.S. bank was certain to collapse in the near future -- although, of course, he wasn't naming names.”

Here is my strategy;

I plan to keep the money that I need for monthly cash-flow in my local Credit Union that has very little investment in real-estate.  This is my primary bank account.  Then, I have several other bank accounts including another Credit Union and a Business account (which may be safer because because banks cater to business accounts). All are local small banks that have little or no money invested in real-estate. I think the larger national banks are in the most trouble, even if they have better options like free checking or free banking online, I think my money will be safer in the smaller local banks that have a little investment in real-estate. 

Credit Unions make their investment portfolio public, so you can see how they are investing your money. Opening several accounts at different banks gives you some protection if one goes under because at least you will not have lost all of your money. All types of saving and checking accounts are FDIC insured by up to $100,000 but who knows how long it will take to get your money after a bank goes under - while you still need to pay your bills. The other advantage of having several bank accounts is to quickly move money between them, as CD and saving rates change or as you begin to suspect their financial weakness.

Also, most investment products are not FDIC insured, so keep that in mind. If the bank that has your 401k investment goes under, you may not be able to get it back. For more information as to what is insured, here in an article from the FDIC. Insured or Not Insured?

Copyright © 2010 PennyJobs.com. All rights reserved.

<< FREE >> Weekly Newsletter...

Signup today and start receiving our free weekly newsletter!

Reader Comments

Comment 1
maggie Says: on Tuesday, August 26, 2008 10:52:34 AM

good advice--I believe you are right on and
we have done the same with our savings--
Local Credit Unions and small town banks--
thanks for the confirmation--!!!


Comment 2
bob Says: on Wednesday, August 27, 2008 1:06:52 PM

Local Credit Unions and small town banks invest in local business and local real estate. As long as your local economy is not struggling, you should be fine.

Comment 3
bob Says: on Tuesday, September 30, 2008 11:25:04 AM

Looks like Kenneth Rogoff was correct.

He predicted that a huge U.S. bank was certain to collapse in the near future.


Comment 4
Bluma Says: on Wednesday, October 22, 2008 6:48:13 AM

Good post.

Write a Comment

Please keep comments civil and on-topic. Abusive or inappropriate comments will be removed without warning.

 Name (required)   
 Email Address (required)   
 Website URL 
Comment  
 

Related Articles

  • How Bad Could Inflation Get?
  • The Labor Department reported Tuesday that wholesale prices rose by 1.1 percent last month, the second largest increase in the past 33 years. Read More...
  • Five Valuable Business Lessons – From Trump’s hit TV Show ‘The Apprentice’
  • The reality TV show ‘The Apprentice’ has been a big hit for five seasons now. Read More...
  • How to Minimize Your Automobile Total Cost of Ownership
  • Calculating how to minimize your automobile total cost of ownership can be complicated as each situation will have different elements in the equation. Read More...
  • Surprise, Surprise: Inflation Doubles Expectations to 5.6%
  • The U.S. Labor Department reported Thursday that consumer prices rose by 0.8% last month, twice the 0.4% gain that economists had been expecting. Read More...
  • Avoiding the Most Common Financial Mistakes
  • Today, I’m going to look at the three most common financial mistakes. Read More...
Living Rich by Spending Smart

Mr. Karp provides quick, easy to read, practical tips for smart spending choices. This isn't a book about saving for investing; it’s about making purchase decisions wisely and with purpose. What's more important than taking control of spending habits? Practical advice, easy to adopt changes for sound money management. Easy read with great tips, this book pays for itself in ONE day!

The Hyperinflation Survival Guide: Strategies for American Businesses

The Hyperinflation Survival Guide offers strategies for business managers to keep their enterprise afloat in the midst of runaway inflation. Within this succinct little book are a plethora of sensible business strategies for American businesses. If businesses are to survive they must effectively counter and minimize the ill effects of rampant inflation and/or hyperinflation. The utmost prudence is required in managing accounts receivable, inventory, and production at such a time. A sudden inflationary economic downturn may very well bring a business to its knees leading to insolvency.

What You Should Know About Inflation

This book presents the Austrian theory of money in the clearest possible terms, and contrasts it with the fallacies of government management. Hazlitt takes on not only the Keynesians but also the monetarists, as well as anyone who believes that government debt accumulation and manipulation of interest rates are harmless. Hazlitt touches on a wide variety of macroeconomic topics, including budget and trade issues, as well as the economic history of inflation.

Crash Proof

Peter Schiff has predicted the economic hardship more accurately then any other economist in the world in this book. Everything from the housing crash to the credit crunch to the stock market. Peter has a plan to help you servive the crash. Peter explains why the Wall Street investment firms are still trying to sell you stocks, and was the house prices are likely to continue to decline for years to come.