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The Financial Crisis and You
Eve Applebaum and Scott Dominick wonder whether they should buy that perfect condo in Brooklyn.
(Courtesty Of Eve Applebaum)
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But DiPiero warned against moving her money into a CD because even the highest-yielding CDs are not keeping up with inflation, which is above 5 percent. "You're going to go poor safely," he said.
Are You Sure It's Safe?
When it comes to picking financial institutions to take care of her money, Jocelyn Reed, 37, has had a string of bad luck.
She once had a CD at California-based IndyMac. That bank went under earlier this year.
She has a life insurance policy with American International Group. The company was recently taken over by the federal government.
She now has checking and savings accounts with Washington Mutual. The government seized that bank just last week and sold it to J.P. Morgan Chase.
"I'm hearing a lot of discussion about safe banks, and I'm not even sure what that means," said Reed, an Oakland, Calif., school psychologist who used to live in the D.C. area.
"It is overwhelming," she said. Her father, whom she relies on for financial advice, keeps telling her not to worry. "I am still concerned and want to stay on top of it because I need to take care of myself."
She wonders: How safe is her money at any bank?
Crimmins agrees with Reed's father. "Jocelyn should rest assured that her bank accounts and life insurance policy are protected," he said.
First of all, traditional bank accounts such as checking and savings accounts, as well as CDs, are insured by the FDIC for up to $100,000 per account holder per bank. Her IndyMac CD should have been fine because she did have less than $100,000 in it. As for her Washington Mutual account, she has nothing to worry about. All deposit accounts were transferred to J.P. Morgan. As long as her two accounts had less than $100,000, which they did, she was, and is, covered.
"In the 75-year history of the FDIC, no customer has ever lost money on an insured deposit," Crimmins said.
There are protections in place for her AIG life insurance policy, as well.
