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Personal bank assets include any financial instrument a person, couple, or corporation has invested in through a banking institution. Making sure these are protected is imperative for personal economic stability. Checking on all assets to make certain protections are in place requires a multi-step process. Some assets will be much easier to protect than others.
Step 1 - Determine Types of Personal Bank Assets
The best place to start when checking on the protection of personal bank assets from failures and crashes is by listing out all account types. Banking institutions often offer these types of investment tools:
- standard checking accounts
- standard savings accounts
- trust accounts
- retirement accounts
- corporation, partnership or association accounts
- mutual funds
- annuities
- stocks and/or bonds
Perhaps the easiest form of protection for personal bank assets is found through the Federal Deposit Insurance Corporation (FDIC). This nationalized program provides deposit protection of up to $250,000 per coverage account type. The caveat, however, is that assets must be deposited in an institution that is backed by the FDIC. Most major banking institutions are protected by the FDIC, but not all. With this in mind, it is wise to check a personal banking institution's standing with this agency.
Step 3 - Find out What is Protected
While FDIC deposit insurance does protect many personal bank assets, it does not protect them all. Exceptions to its blanket and automatic coverage include such things as insurance policies, annuities, stocks, bonds and municipal securities. If these items are included in personal assets, make sure to weigh the potential returns versus the risks involved.
Step 4 - Keep the Sunset In Mind
FDIC protection of personal bank assets that are covered is presently set at $250,000. This amount of coverage, however, is planned to sunset on Jan. 1, 2010. This means deposits in approved accounts will only be protected up to $100,000.
Step 5 - Develop Contingency Plans
While FDIC insurance does provide a certain level of peace of mind, it is not necessarily enough to protect personal assets fully. With this in mind, it is best to have plans in place to protect assets. To do this it is often advised that all assets be reviewed and scrutinized for potential risks versus potential gains. A diversification of assets of varying risk levels and types is often the best for protecting overall personal wealth.
Protecting personal bank assets requires careful attention. While it might not be possible to protect every dime from loss, there are ways to mitigate exposure.
