"How To Money" With Joel Larsgaard

"How To Money" With Joel Larsgaard

Listen to "How To Money" With Joel Larsgaard on Sundays from 12 PM to 2 PM.Full Bio


How To Money

Silicon Valley Bank headquarters and branch

Photo: Getty Images

Joel covered a lot this week, so here's a quick outline of what you need to know to get yourself on your way to financial happiness:

The Silicon Valley Bank collapse has been on a lot of people's minds. Since the bank collapse, everyone has a lot of questions on whether or not they should be worried about their money in the banks. Joel answers some of the questions that you may have about your money:

Is my money safe? Yes! If you’re under the FDIC insurance limits. And granted, everyone at SVB, including those who had significantly more than that chilling in savings at SVB, got their $ back. Will that be the reaction to future bank busts? It’s anyone’s guess. I wouldn’t count on it. So it’s still best to make sure that your deposits don’t go above $250k in any one banking institution. No-one has ever lost money in an FDIC-insured account and this insurance has been around since 1933. 

What if I do have more than $250k liquid in savings? I mentioned Giannis last Sunday, a bball player w/ 50 different accounts so that he has insurance on all his assets. That works! But you can also get more coverage in a couple of different ways. Ex. if you’re married, you can have an account in each of your names + joint account. The investment firms like Fidelity & Schwab are great choices for banking too. Brokerages like Fidelity join with FDIC-insured banks to increase the coverage they offer to clients in CMAs or cash-management accounts. Ex. Fidelity cash-management accounts can offer more than $1 million in protection.

Should I switch banks? Maybe. But not for the reason you think. Billions of dollars are currently flowing into the biggest banks like Chase, WF, and BOA. Bank of America alone got $15 billion in just a couple of days from new deposits. You might be shocked to hear this, but I hate seeing that. People think that they are flying to the safety of these larger institutions. But they’re switching to worse rates on savings, inferior customer service, and often higher monthly fees. Again, FDIC insurance coverage rocks. If you’re somehow doing biz w/ a bank that doesn’t have it, move your $ to an institution that does offer that coverage. But definitely don’t move from a great online bank to a name brand bank bc you think it’s going to be safer. I still love Ally, Discover, Capital One, & CIT. They’re the best options for most folks.

Do I need to have cash on hand? Well, I don’t want you keeping most of your savings under your mattress. There are other risks there. Plus, you’re not earning anything on it while inflation is eating away at the value of those dollars. It’s always good to have a little cash on hand. We’ SO used to doing everything digitally. No need to go doomsday prepper, but it can’t hurt to have a few hundred bucks.

What about small businesses or individuals who need to have more cash on hand? I mentioned a few of those workarounds just a second ago. There’s also something called IntraFi. It’s a service that allows you to deposit bigger chunks (millions) and then disperses your funds in $250k increments to FDIC-insured institutions. It basically makes it simpler to manage really large sums of money.

Do credit unions have insurance coverage too? Yep, NCUA! It’s incredibly similar to FDIC coverage. No need to worry if you’re at a credit union insured by NCUA.

Should I be nervous about my retirement funds? Nope! Those are insured too. Not w/ FDIC coverage, but something called SIPC. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.

Will interest rates keep going up? That’s anyone’s guess. We’ll find out next week. Inflation is still a problem. So rates are likely to continue to go up, but the pace will likely slow. For some savings that you don’t need fully liquid, CD’s might be a better move than ever right now!'

Money Move of the Week: Add your children as an authorized user on your credit card! If you are good at paying off your credit card debt, adding your kids could help them start off early with a good credit score. Just be aware of the age requirements before you add your kids.

Recently, T-Mobile bought Mint Mobile. Although this is not the worst thing in the world, it's not great seeing less competition in the marketplace. If you're with one of the big cell phone providers, it might be worth it to check out some cheaper cell phone plans.

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