For the first time ever I sold all my stocks

[Dtail]

Depositaccounts.com gives the published ratings for all the banks they cover. You can compare them.

If one is within the FDIC limits and the bank goes under, how long would one have to wait to be made whole by the govt?

 

[Sunset]

But if I'm not?

If I had cash above the FDIC limit , I'd want to split my money into various accounts. My understanding is different titled accounts each have their own limit. (someone correct me if I'm wrong). After that, I'd go with another bank and do the same.

Ally Bank

• Mine
• DW
• Joint account of Me and DW

Bank #2

• Mine
• DW
• Joint account of Me and DW

This would tuck away $1.5 Million.

 

[njhowie]

If one is within the FDIC limits and the bank goes under, how long would one have to wait to be made whole by the govt?

I seem to remember reading articles about this when smaller local banks have failed - it was extremely quickly as I remember ... under 1 week.

Now, another part of this to keep in mind. Generally when the Feds step in, regulators are seizing the bank - they have already determined it is insolvent. When they do this, they already have a buyer lined up to take control. I remember a 60 Minutes story on this. Regulators send a team, are waiting at the door on Friday at close of business, they flash their credentials, move in for the weekend and reconcile everything, then on Monday it's business as usual under the new owner. In this case, there is nothing to worry about - your money is there Monday morning as it was Friday, simply with a new bank name.

 

[Dtail]

I seem to remember reading articles about this when smaller local banks have failed - it was extremely quickly as I remember ... under 1 week.

Now, another part of this to keep in mind. Generally when the Feds step in, regulators are seizing the bank - they have already determined it is insolvent. When they do this, they already have a buyer lined up to take control. I remember a 60 Minutes story on this. Regulators send a team, are waiting at the door on Friday at close of business, they flash their credentials, move in for the weekend and reconcile everything, then on Monday it's business as usual under the new owner. In this case, there is nothing to worry about - your money is there Monday morning as it was Friday, simply with a new bank name.

Not that I am concerned, but good to know.

 

[OldShooter]

Here is an authoritative piece on a bank getting shut down: https://www.americanbanker.com/opinion/will-fdic-keep-protecting-failed-banks-uninsured-deposits

Related subject: I have always been a little surprised at the concern around here about FDIC insurance. Sure, it's nice to have but it seems that the people who are concerned are also putting money in MMFs, equity, bond funds, etc -- none of which are insured. Seems like kind of a disconnect, no?

 

[kevdude]

I seem to remember reading articles about this when smaller local banks have failed - it was extremely quickly as I remember ... under 1 week.

Now, another part of this to keep in mind. Generally when the Feds step in, regulators are seizing the bank - they have already determined it is insolvent. When they do this, they already have a buyer lined up to take control. I remember a 60 Minutes story on this. Regulators send a team, are waiting at the door on Friday at close of business, they flash their credentials, move in for the weekend and reconcile everything, then on Monday it's business as usual under the new owner. In this case, there is nothing to worry about - your money is there Monday morning as it was Friday, simply with a new bank name.

This is exactly what happened to the many banks that went under during the GR in Washington state and I assume throughout the US.

 

[Vincenzo Corleone]

Here is an authoritative piece on a bank getting shut down: https://www.americanbanker.com/opinion/will-fdic-keep-protecting-failed-banks-uninsured-deposits

Related subject: I have always been a little surprised at the concern around here about FDIC insurance. Sure, it's nice to have but it seems that the people who are concerned are also putting money in MMFs, equity, bond funds, etc -- none of which are insured. Seems like kind of a disconnect, no?

SIPC?

 

[REWahoo]

If one is within the FDIC limits and the bank goes under, how long would one have to wait to be made whole by the govt?

I've seen many of these over the years and it always happened overnight/weekend as njhowie described.

The failed bank is declared insolvent at the close of business and all the insured accounts are transferred by the FDIC to the acquiring bank. The funds are available to the account holder when the bank opens the next business day.

 

[audreyh1]

If one is within the FDIC limits and the bank goes under, how long would one have to wait to be made whole by the govt?

In the past it was overnight.

 

[OldShooter]

SIPC?

I don't think that is quite the same. Yes, for failure of the institution and your getting your assets back some day. But it's no protection against the dollar value of your equity fund, bond fund, or even your MMF going into the toilet. FDIC protects the dollar value of the asset. So no risk of losing money. SIPC doesn't guarantee that.

 

[Sunset]

Here is an authoritative piece on a bank getting shut down: https://www.americanbanker.com/opinion/will-fdic-keep-protecting-failed-banks-uninsured-deposits

Related subject: I have always been a little surprised at the concern around here about FDIC insurance. Sure, it's nice to have but it seems that the people who are concerned are also putting money in MMFs, equity, bond funds, etc -- none of which are insured. Seems like kind of a disconnect, no?

Maybe it's simply a case of not having all your eggs in 1 basket, and the nice feature about FDIC sounds so good, people want to be sure it's really true.

 

[gwraigty]

I seem to remember reading articles about this when smaller local banks have failed - it was extremely quickly as I remember ... under 1 week.

Now, another part of this to keep in mind. Generally when the Feds step in, regulators are seizing the bank - they have already determined it is insolvent. When they do this, they already have a buyer lined up to take control. I remember a 60 Minutes story on this. Regulators send a team, are waiting at the door on Friday at close of business, they flash their credentials, move in for the weekend and reconcile everything, then on Monday it's business as usual under the new owner. In this case, there is nothing to worry about - your money is there Monday morning as it was Friday, simply with a new bank name.

During the financial crisis, we had some brokered CDs paid immediately before their maturity date when the issuing banks went under. It was that fast. Before we were made aware of a bank problem, we already had our money.

Here is an authoritative piece on a bank getting shut down: https://www.americanbanker.com/opinion/will-fdic-keep-protecting-failed-banks-uninsured-deposits

Related subject: I have always been a little surprised at the concern around here about FDIC insurance. Sure, it's nice to have but it seems that the people who are concerned are also putting money in MMFs, equity, bond funds, etc -- none of which are insured. Seems like kind of a disconnect, no?

+1

 

[Dtail]

Here is an authoritative piece on a bank getting shut down: https://www.americanbanker.com/opinion/will-fdic-keep-protecting-failed-banks-uninsured-deposits

Related subject: I have always been a little surprised at the concern around here about FDIC insurance. Sure, it's nice to have but it seems that the people who are concerned are also putting money in MMFs, equity, bond funds, etc -- none of which are insured. Seems like kind of a disconnect, no?

Interesting thought.
For example we locked in 3.30/3.05% 5 year CD's with GTE.
As some folks remember, these CD's have an unlimited add on money feature.
Still, I am reluctant to go past the NCUA limits.

 

[OldShooter]

... Still, I am reluctant to go past the NCUA limits.

Well, we are loss-averse little mammals. The behavioral finance and behavioral economics folks tell us that. So it is probably a matter of perceived relative safety between insured and not-noninsured. Non-insured looks more risky than insured, never mind that both have very low absolute risk and very low risk relative to the alternatives that we confidently invest in.

That's why Thaler called his book "Misbehaving."

 

[Dtail]

9for ballast)

Well, we are loss-averse little mammals. The behavioral finance and behavioral economics folks tell us that. So it is probably a matter of perceived relative safety between insured and not-noninsured. Non-insured looks more risky than insured, never mind that both have very low absolute risk and very low risk relative to the alternatives that we confidently invest in.

That's why Thaler called his book "Misbehaving."

Yes but as you can see even with bonds (for ballast) compared to stocks, folks on this site appear to be more upset when the bonds go down vs. when the stocks go down.
Now extrapolate that further down the chain to "safer" CD's and the what if......

 

[24601NoMore]

If I had cash above the FDIC limit , I'd want to split my money into various accounts. My understanding is different titled accounts each have their own limit. (someone correct me if I'm wrong). After that, I'd go with another bank and do the same.

Ally Bank

• Mine
• DW
• Joint account of Me and DW

Bank #2

• Mine
• DW
• Joint account of Me and DW

This would tuck away $1.5 Million.

Pretty sure that would give you $2M FDIC insurance, as the max is $250K PER DEPOSITOR, per account "type".

Your first account type is Individual, and you have four Individual accounts - 2 each at Bank 1 and 2. So, that's $1M insured.

Your second account type is Joint, and that's insured for $250K per depositor. You have two of those with two depositors, so that's two * $250K * 2. So, that'd be $1M total insurance for your joint accounts also - 2 accounts @ $500K insurance each.

You can also add Beneficiaries to increase the max on a Tentative Trust (usually established via POD / TOD) account to $250K per Beneficiary. So, if you have 2 Beneficiaries on a Joint account, both you and DW each have $500K insurance on that joint account for a total of $1M on the joint account.

Here's the calculator for confirming max coverage at a CU. You can probably find a similar one for FDIC..

https://www.mycreditunion.gov/insurance-estimator

NCUA to the best of my knowledge is identical to FDIC in how max insurance is calculated. Same rules on account types and limits per depositor.

All that said, I'm wondering how well the FDIC (and more importantly for me, the NCUA) is going to fare if we go into Great Depression 2.0 from COVID, which IMHO is not out of the realm of possibility. But that's a topic for another post..

Hope that helps..

 

[rkser]

Interesting thread. I admit I haven't read all the replies. We balanced our portfolio to about 60/40 stocks vs bonds/cash at the end of 2016. I had been planning to invest more back into stocks when they took a dive. However, on March 23rd, I just couldn't do it! And it happened so fast! I've been having a bit of inner turmoil about it since that date. Then I remembered financial planners recommend an allocation of 110-120 minus your age for your stock percentage. It used to be 100 minus your age, but with rising life expectancies they suggest 110-120 minus your age. Anywho, I did a calculation yesterday, and we are sitting at 55% stocks to bonds/cash which equals 120 minus our age. I have decided that following a set allocation like this and rebalancing from time to time is probably the least anxiety-inducing for me.

I am 64 & was happy at 50/50, am now at 60/40.

I got carried away by the down days on the Market in recent months & over bought the VTSAX on sale, my error was not be mindful of my AA of 50/50 happy medium & landed at 60/40. All the transactions are in taxable accounts as tax deferred accounts have all the Bond Funds.

I am waiting for some up days on the market so that I can re balance towards 50/50, the sweet spot. I understand, 60/40 vs 50/50 may not make a big difference in the long run, but having sort of won the game I do not want to risk any more than I need to.

My forecast (only fools forecast the Market ) was this Corona may be a slight dip (it might still be a small dip in a longer span of time) & the Markets may return back, but now it looks much more complicated & we may be in this un certainty for a while.

My Greed got the better of me on the down days just as Fear did in 2008. Fear & Greed precede the human mortals downfall.

 

[VanWinkle]

I read this current article concerning the reasoning behind the market's move upward and why the bear may not show it's head again:

https://medium.com/@dan_60967/devils-advocate-the-bull-case-338718cf177c

"Investors as a whole remain extremely bearish, to the extent that even entertaining a bullish view induces fairly violent responses. But these people are already out of the market. Their views do not impact price unless they are forced to capitulate, in which case they drive the market up"

 

[maestro]

Boy, you sure do know everything.

+1 yeah, no kidding. CO says 'wish you the best' then keeps hammering the OP for his decisions, albeit, calling it 'emotional' (right, after 40 years)? But OP says he sleeps better at night?!? Peace, Harli, you made a GREAT decision. Man....

 

[COcheesehead]

+1 yeah, no kidding. CO says 'wish you the best' then keeps hammering the OP for his decisions, albeit, calling it 'emotional' (right, after 40 years)? But OP says he sleeps better at night?!? Peace, Harli, you made a GREAT decision. Man....

Easy now, I am still here and I still stick with my original opinion. Big moves in turbulent times usually are emotional. Says the survivor of by last count, 4 bear markets.

The OP is also a woman if you read the thread.

 

[harllee]

Easy now, I am still here and I still stick with my original opinion. Big moves in turbulent times usually are emotional. Says the survivor of by last count, 4 bear markets.

The OP is also a woman if you read the thread.

Yes the OP is a woman and I am still here and I am sticking with my opinion regarding what is best for me. Maybe my decision was emotional but I am still sleeping better. And I still have all my cash! Everyone should be able to make the investment decision best for him or her during this terrible time. In my 69 years I have lived through many bear markets too (not sure of the number) but I have never seen anything like what we are going through now.

 

[COcheesehead]

Yes the OP is a woman and I am still here and I am sticking with my opinion regarding what is best for me. Maybe my decision was emotional but I am still sleeping better. And I still have all my cash! Everyone should be able to make the investment decision best for him or her during this terrible time. In my 69 years I have lived through many bear markets too (not sure of the number) but I have never seen anything like what we are going through now.

And I still wish you the best.

 

[maestro]

Easy now, I am still here and I still stick with my original opinion. Big moves in turbulent times usually are emotional. Says the survivor of by last count, 4 bear markets.

The OP is also a woman if you read the thread.

Oh, I am VERY easy here, and don't mean any offense, how about you being 'easy'? When someone says, 'Best of luck', usually means they're 'done' with their opinions on the issue. Also, I don't look at gender when I read a post, nor do I care you're a survivor of 4 bears. Guess you have bigger flags flying, as someone else says, you 'know it all'. Thought this board was for advice, not whether determining someone is being 'emotional' or not, which as it turns out, you are. How do you know someone is being emotional? Really?!? SMH. Done with this thread.

 

[COcheesehead]

Oh, I am VERY easy here, and don't mean any offense, how about you being 'easy'? When someone says, 'Best of luck', usually means they're 'done' with their opinions on the issue. Also, I don't look at gender when I read a post, nor do I care you're a survivor of 4 bears. Guess you have bigger flags flying, as someone else says, you 'know it all'. Thought this board was for advice, not whether determining someone is being 'emotional' or not, which as it turns out, you are. How do you know someone is being emotional? Really?!? SMH. Done with this thread.

 

[Shredder]

Yes the OP is a woman and I am still here and I am sticking with my opinion regarding what is best for me. Maybe my decision was emotional but I am still sleeping better. And I still have all my cash! Everyone should be able to make the investment decision best for him or her during this terrible time. In my 69 years I have lived through many bear markets too (not sure of the number) but I have never seen anything like what we are going through now.

+2

I couldn't have said it better. Other than here, on this site, I'm barely paying attention to the market. Before I sold our equities it was a different story. Its like a weight was lifted. And isn't retirement supposed to be stress free?