With all the financial turmoil and the collapse of 13 banks this year, many people are wondering whether it’s safe to leave their money in the bank. Stories have abounded of fearful people rushing to withdraw their money from savings accounts, causing runs on some banks. But before you withdraw your money and hide it under a mattress, here’s what you need to know about how your deposits are insured.
Recently, the Federal Deposit Insurance Corporation (FDIC) temporarily raised the limit on deposit insurance to $250,000 from $100,000. That measure was taken to discourage people from grabbing their money and to help support the government’s bailout package. But as the economy has continued to struggle, government officials have discussed whether the limits should be entirely removed, in effect insuring all bank deposits.
Bloomberg.com reported today that Federal Reserve Chairman Ben Bernanke hinted that the Federal Reserve is ready to lower interest rates at their next meeting before the end of this month. Some analysts are predicting a cut will come before then.
The article goes on to quote Bernank as saying, “Even households with good credit histories are now facing difficulties obtaining mortgage loans or home equity lines of credit.” He continued with, “Banks are also reducing credit card limits, and denial rates on automobile loan applications reportedly are rising.”
It has become increasingly difficult for consumers to borrow money. If you are currently exploring debt consolidation, you may need to get creative.
Chris Rocks is the Regional Director of the National Credit Federation (NCF). NCF is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
He can be contacted by visiting his personal site, GoodCreditLiving.com.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to rein in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
Karen Lawson is a freelance writer with more than 15 years of experience working in mortgage banking and loan servicing. She holds BA and MA degrees in English from the University of Nevada, Reno. She enjoys writing informative articles about debt management and personal finance.