The biggest bank failure happened since the great financial crash from 2007-2009.
On March 10, 2023, Silicon Valley Bank collapsed and was taken over by financial regulators.
Things may get a lot worse, BUT YOU CAN PROTECT YOURSELF!
Here's how:
On March 10, 2023, Silicon Valley Bank collapsed and was taken over by financial regulators.
Things may get a lot worse, BUT YOU CAN PROTECT YOURSELF!
Here's how:
I explained what happened with the Silicon Valley Bank here:
1) Diversify your deposits
In the US, Federal Deposit Insurance Corporation (FDIC) insures deposits at banks.
There is a limit to this: The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
In the US, Federal Deposit Insurance Corporation (FDIC) insures deposits at banks.
There is a limit to this: The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
In Canada, your deposits are protected by Canadian Deposit Insurance Corporation (CDIC).
CDIC insures eligible deposits held in the name of one depositor separately from other categories up to $100,000.
CDIC insures eligible deposits held in the name of one depositor separately from other categories up to $100,000.
Even if you have less than $250,000 in cash, open multiple bank accounts with different banks.
Keeping it all in one account will leave you temporarily stranded with no money in case your bank goes down.
Keeping it all in one account will leave you temporarily stranded with no money in case your bank goes down.
2) Don't trust ANY BANK
It doesn't matter how safe it seems.
Every bank can be put in the same situation if there's a bank run (lots of people trying to withdraw money at the same time).
It doesn't matter how safe it seems.
Every bank can be put in the same situation if there's a bank run (lots of people trying to withdraw money at the same time).
Banks don't keep your deposits safe. Your money is invested.
You know how you get $0.03 on your $10,000 deposit every month?
Banks take that $10,000 and invest it. No matter how "risk free" your bank thinks its strategy is, a bank run will end up leaving it insolvent.
You know how you get $0.03 on your $10,000 deposit every month?
Banks take that $10,000 and invest it. No matter how "risk free" your bank thinks its strategy is, a bank run will end up leaving it insolvent.
3) Keep some cash on hand
Depositors at SVB (even the ones that had insured deposits) won't see their money until March 13th.
Now keep in mind, in some cases this timeline could be longer. 4 days doesn't seem like much, but what about 1-2 weeks?
Depositors at SVB (even the ones that had insured deposits) won't see their money until March 13th.
Now keep in mind, in some cases this timeline could be longer. 4 days doesn't seem like much, but what about 1-2 weeks?
Keeping some cash on hand can help in case you lose access to your money.
Even a few hundred dollars as a small emergency fund can take you through the next few days if you need it urgently.
Even a few hundred dollars as a small emergency fund can take you through the next few days if you need it urgently.
4) LEARN ABOUT BITCOIN
Bitcoin is a way to opt out of fractional reserve banking. It was created for this exact situation.
The banking system uses your money to take risks and make profits.
Bitcoin is a way to opt out of fractional reserve banking. It was created for this exact situation.
The banking system uses your money to take risks and make profits.
With bitcoin, you don't face uncertainty at all times if you hold your own keys.
I explained bitcoin in depth here:
I explained bitcoin in depth here:
Now keep in mind that most average people won't face losses because they don't have $250,000 in a bank account.
But you may be impacted if you don't have an emergency fund set aside.
But you may be impacted if you don't have an emergency fund set aside.
If your employer keeps cash at SVB YOU MIGHT NOT GET PAID.
Since most customers of SVB were tech start ups, they had huge cash balances with SVB.
There is NO date for when they will get access to their cash!
Since most customers of SVB were tech start ups, they had huge cash balances with SVB.
There is NO date for when they will get access to their cash!
Set some cash aside now (if you have it) to protect yourself over the next few weeks or months, and split it between MULTIPLE bank accounts.
I'm passionate about helping more people become financially literate, but these threads take a long time to write.
If you found value in this post, make sure you like and retweet the first tweet, and subscribe to my FREE newsletter.
Rajatsonifinance.substack.com
Thanks for reading!
If you found value in this post, make sure you like and retweet the first tweet, and subscribe to my FREE newsletter.
Rajatsonifinance.substack.com
Thanks for reading!
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