Jul 15, 2008 8:01 pm US/Eastern
How To Keep Your Money Safe Amid Bailouts
NEW YORK (CBS) ―
With bailouts and bank runs, how do we keep our money safe?
Conventional wisdom points to our neighborhood bank or savings and loan. But are jittery investors now considering stashing cash under the mattress?
On day 2 of the Indy Mac meltdown, police controlled crowds as customers lined up after midnight to try and get their money out of the bank, this after the bank was re-opened Monday under the control of the Federal Deposit Insurance Corporation.
Although it is mostly people in California who are heading to the banks to withdraw their savings, it makes New Yorkers worry about the safety of their own banks.
"It is a bit nerve-wracking and I don't think it will change anytime soon and more will happen," said Paulette Samuels of Queens.
"The financial system clearly is wounded and cautious about where your money is...it's certainly the order of the day," said Gred David.
David, editor at Crain's NY Business says every investor needs to monitor their bank's health, but there are many ways to protect your assets.
Federal Deposit Insurance protects any account up to $100,000, or $250,000 if it's a retirement account.
Anything over $100,000 should simply be put in different banks, with no more than $100,000 in any one bank. And federal regulators say banks being taken over are still a rare occurrence.
"There are 8,500 banks out there and this is one. Yes, there will be more failures, but it will still be low, certainly by and in comparison to what happened during the S&L days.
401k accounts are considered safe, since you own whatever asset it is invested in. Government pensions are considered to be well protected, as are most company pensions, within their limits.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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