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- Gallup survey shows that almost half of Americans are worried about the safety of their bank deposits amidst industry instability.
- Of those surveyed, 48% expressed concern about their funds in banks or other financial institutions.
Worries About Bank Deposits Safety
A Gallup survey has revealed that nearly half of Americans are anxious about the safety of their bank deposits as the financial industry is facing instability. The survey results show that 48% of those surveyed are worried about the funds they keep in banks or other financial institutions. Of those concerned, 19% reported being
“very worried”
while 29% said they were
“moderately worried.”
However, the other half of the participants did not express the same level of concern, with 30% stating they are
“not too worried”
and 20% saying they are
“not worried at all.”
Survey Conducted After Bank Failures
The poll was conducted between April 3rd and 25th, after the collapses of Silicon Valley Bank and Signature Bank. The downfall of First Republic, the next major US bank to fail, happened after the poll was completed, according to the survey. The results of the survey were found to be similar to a poll conducted during the 2008 banking crisis.
Possible Reasons for Worries
The survey notes that it’s unclear whether Americans are worried about their personal accounts because they are unaware that up to $250,000 of their funds are insured by the Federal Deposit Insurance Corporation (FDIC) or if bank failures signal a weakness within the industry that could lead to the downfall of the FDIC itself. When banks fail, it is also unclear whether Americans’ heightened concern about their own deposits reflects a lack of awareness of the protections for small accounts provided by the FDIC or their fear of a snowball effect that could bring down federal insurance as well.
FDIC Insurance Coverage
The FDIC provides deposit insurance coverage for up to $250,000 per depositor, per insured bank. However, the insurance coverage limit is only for each depositor’s total deposits in a particular bank, not for each account. So, if a depositor has accounts in different branches of the same bank, the $250,000 limit applies to the total deposits in all accounts combined.
If the depositor has accounts in different banks, each bank is separately insured up to $250,000. The FDIC was created in 1933 to provide insurance coverage for depositors in case banks failed. Since then, no depositor has lost a penny of insured deposits as a result of a bank failure.