This article is reprinted by permission from NerdWallet. Silicon Valley Bank — a California-based bank that largely catered to technology, venture capital and startup-focused customers — made news as it swiftly collapsed, creating great concern over the billions of dollars it held in deposits.
The bank was insured by the Federal Deposit Insurance Corp., and on Monday, the FDIC took over SVB’s operations so customers wouldn’t lose their funds, even those above the insurable limit. These customers, some of which were businesses that needed to be able to pay their employees, have likely been spared from financial catastrophe. The FDIC is working to resolve things for SVB’s customers, but you may still be wondering what you should do if your bank fails in the future. Another bank, New York-based Signature Bank, also recently collapsed and was bailed out by the FDIC, so banks failing in the future could be a reality, though generally unlikely. Here are some common questions that have come out of SVB’s collapse. Read: Signature Bank Chicago wants you to know it’s not the crypto-friendly bank that failed over the weekendHow does FDIC insurance work? FDIC insurance protects your funds in case your FDIC-insured bank fails. It typically covers up to $250,000 per depositor per institution for each ownership category — such as single accounts, joint accounts and trust accounts — so if your bank balance is $250,000 or less, your money will be returned to you no matter what happens to the bank. If your balance is over $250,000, however, there are other ways to guarantee your money is fully protected.How do I ensure all of my funds are insured? At the bottom of your bank’s website, it will say “member FDIC” or show the FDIC logo if your bank is federally insured. You can also check the FDIC ban …