Should I worry about having over $250k in CDs at one bank?

I’ve got two CDs at my local bank totaling $425k and was thinking about adding a third for $100k. Then I remembered the FDIC insurance only covers up to $250k. Should I be concerned about this? The bank has been around for over 60 years and has multiple branches. I looked into bank failures, and it seems pretty rare. What do you all think?

If you’re married, you could use joint accounts to double the coverage to $500k. Or you might think about spreading some money to a different bank. Failures are rare, but the risk versus convenience is worth considering.

@Blair
No depositor has ever lost money with the FDIC, even when banks fail. When Silicon Valley Bank went under, people with way more than $250k got all their money back.

@Blair
You can also add beneficiaries to the account. That increases the coverage per person you add.

@Blair
Failures like Silicon Valley Bank are rare, but I wouldn’t take the chance myself.

Drew said:
@Blair
Failures like Silicon Valley Bank are rare, but I wouldn’t take the chance myself.

Nobody lost money when SVB went under. Sure, it caused delays, but everyone got their deposits back in the end. It’d take an extreme situation for people to lose money.

@Eden
FDIC only guarantees $250k. SVB depositors were bailed out as an exception. Yellen even said this wouldn’t apply to every bank. So it’s still a risk.

Drew said:
@Eden
FDIC only guarantees $250k. SVB depositors were bailed out as an exception. Yellen even said this wouldn’t apply to every bank. So it’s still a risk.

I get that. Losing deposits would cause chaos in the markets, but yeah, it’s always a risk to consider.

@Eden
Exactly. It’s why you shouldn’t count on exceptions. Stick with the FDIC limit if you want to be 100% sure.

Drew said:
@Eden
Exactly. It’s why you shouldn’t count on exceptions. Stick with the FDIC limit if you want to be 100% sure.

Agreed. Better safe than sorry when it comes to big sums like this.

Drew said:
@Blair
Failures like Silicon Valley Bank are rare, but I wouldn’t take the chance myself.

Silicon Valley sounds like it should be a TV show, not a bank issue!

I used to work at a bank. You can add beneficiaries to increase your coverage. For example, one account in your name, another with one beneficiary, and another with a different beneficiary gets you $750k in coverage.

A joint account doubles the protection. But honestly, you could buy CDs from different banks through Fidelity and keep things simple.

Wealthfront offers 4% on a high-yield savings account, insured up to $4 million. No fees, no lockups, and you can deposit or withdraw whenever you want. Not an ad, just a happy user.

Tully said:
Wealthfront offers 4% on a high-yield savings account, insured up to $4 million. No fees, no lockups, and you can deposit or withdraw whenever you want. Not an ad, just a happy user.

Could you DM me a referral code?

@Blane

Cade said:
@Blane

Referral links aren’t allowed here. Please don’t try posting them. Thanks!

Tully said:
Wealthfront offers 4% on a high-yield savings account, insured up to $4 million. No fees, no lockups, and you can deposit or withdraw whenever you want. Not an ad, just a happy user.

Yeah, but high-yield savings rates aren’t locked in like CDs. If rates drop, you’ll lose that 4%.

Why take unnecessary risks? Just follow the advice here and stick to the FDIC limits. It’s free insurance for your money.

There are better options than CDs for your money.