JPMorgan CEO Jamie Dimon Warns the Banking Crisis Isn't Over. Is Your Money Safe?

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KEY POINTS

  • The recent failures of Silicon Valley Bank and Signature Bank have the potential to impact the industry for years, says Dimon.
  • While that might make you nervous about your savings, there's an easy way to protect your money.
  • If you have more than $250,000 in a bank account, split it up between multiple banks or add a joint depositor, such as a spouse.

It's a question on a lot of people's minds these days.

At this point, it would be more than fair to say that 2023 has been a tough year for the banking sector. So far, two major banks -- Silicon Valley Bank and Signature Bank -- have collapsed. And in late March, UBS agreed to buy its rival Credit Suisse so as to avert a full-fledged banking and financial crisis.

Consumers are largely being told not to worry about these recents events, and are being reassured that this is not, in fact, a repeat of 2008, when a massive financial crisis spurred a painful and prolonged recession. But in a recent letter to shareholders, JPMorgan CEO Jamie Dimon warned that the impact of these recent bank failures could impact the economy for years to come.

In fact, Dimon expressly said that these failures "were not good for banks of any size." And that's an unsettling thing to contemplate.

If the recent banking industry meltdown has left you worried about your money, the good news is that you may have more protection than expected. And there's an easy way to help ensure that you won't end up losing money if the banking crisis continues.

Our Picks for the Best High-Yield Savings Accounts of 2024

APY
4.25%
Rate info Circle with letter I in it. 4.25% annual percentage yield as of July 17, 2024
Min. to earn
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5.10%
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APY
4.50%
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Your money is most likely safe already

Most major banks these days are FDIC insured, and many smaller ones fall into this category, too. As long as you have money at an FDIC-insured bank, you can rest assured that your principal is protected as long as it doesn't exceed $250,000.

What this means is that if you have $250,000 in your savings account and your bank fails, you won't be out so much as a penny. And since most people aren't sitting on more than $250,000 in savings, the typical U.S. consumer at an FDIC-insured bank shouldn't have to worry.

What if you have a lot of money in savings?

It may be that you're in the process of trying to do something like buy a home that requires you to keep a lot of money in cash at the bank. If you have more than $250,000 in savings, there are a few steps you can take to protect it, since that's beyond the FDIC insurance limit.

For one thing, you can split your deposits between several banks. FDIC insurance will protect up to $250,000 in cash per bank, so if you have $400,000 in savings, you may want to put $200,000 in one bank and your remaining $200,000 in another.

A second option you can look at is adding a joint depositor on your account, like a spouse. If you do that, your FDIC insurance limit at a single bank will double, protecting up to $500,000 in cash deposits.

It's natural to worry about your money when you keep reading about bank failures. But FDIC insurance was created to protect consumers from situations like these. So there's really no need to lose sleep over the idea of the money you've worked so hard to save disappearing in a bank collapse.

These savings accounts are FDIC insured and could earn you 14x your bank

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Two of our top online savings account picks:

Rates as of Jul 18, 2024 Ratings Methodology
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American Express® High Yield Savings Citizens Access® Savings
Member FDIC. Member FDIC.
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor

APY: 4.25%

Rate info Circle with letter I in it. 4.25% annual percentage yield as of July 17, 2024

APY: 4.50%

Min. to earn APY: $1

Min. to earn APY: $0.01

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