You keep you money in the Banks. Most of the people have their life savings in a bank, in one form or the other.
What will happen to all the money if the banks get trouble and have to shut shop? Maybe they would hold paying you off for some months on the minimum while the banks undergo federal mandated change of ownership and the new owners take charge.
They might even put a clause saying only a certain amount of money may be withdrawn in a given period of time or something similar.
Maybe your money is not threatened at all, but you would like your money to sit in a bank which is managed well.
Quite a few analyts are forecasting that IndyMac bank woes are just the starting and many more banks might go down the same path.
According to CNN,
Stocks that were hit the hardest Monday included First Horizon National Corp., which operates in the Southern United States; Zions Bancorp, located in Utah and Idaho; and Washington Mutual Inc., the nation’s largest savings and loan. Stocks of bigger banks such as Wachovia Corp., Citigroup Inc., Bank of America Corp., and Wells Fargo & Co., also tumbled.
America’s largest bank, Citigroup, whose CEO was newly appointed Indian – Vikram Pandit, is also expected to show a loss.
These are bad times for the banking industry.
For the consumers though, the real worry is find good loans.
When it comes to the day-to-day business of operating checking and savings accounts, be careful that you don’t deposit more than $100,000 in a single account at one institution as amount upto that is ensured by the government but not above that. Or $250,000 for some retirement accounts.
Beyond that, the government decides whether to pay back the customer on a case-by-case basis.