The financial collapse of Silicon Valley Bank (SVB) has left people with many questions and concerns about their finances. Everyone is worried that this crisis will spread to other banks and repeat the situation we experienced in 2008 and beyond. But the question that keeps coming up is a very specific one: is my money safe?
The financial institution SVB, known for its commitment to financing technology companies in Silicon Valley, has filed for bankruptcy due to losses incurred from its participation in venture projects. At the moment, we do not know if this is a specific situation or one that can be extrapolated further. But we can answer what will happen to their clients’ money by considering SVB’s affiliates.
Not all accounts are safe
When asked whether clients will get their money back, the answer is yes. At least for the most part. The U.S. government has a deposit insurance system called FDIC (Federal Deposit Insurance Corporation) that protects customers in case the bank fails.
According to the FDIC, deposits are insured up to a total of $250,000 per account. This means that the vast majority of customers will get their money back in full. However, if someone had more than that amount in their account at the time of the bank collapse, they may not receive the “extra” portion they had in their account.
In addition, it is important to note that there are certain exceptions for insured deposits. For example, deposits held in investment accounts, such as stock accounts, are not covered by the FDIC. Neither are deposits made in currencies foreign to the U.S. dollar.
It is important to mention that the process of liquidating a bank can be long and complex. In the case of SVB, the authorities are working to find a buyer to take over the bank’s assets and liabilities. However, it is something that may take a long time until customers get all their money back.
For the time being, SVB customers can continue to access their accounts and perform transactions, but should be aware of any changes to the liquidation process.