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Would love to understand if this is actually good financial advice here. My bank plays broker for all the assets I own and tbills are part of that. FDIC wrote:
by timdaub 4y ago
Would love to understand if this is actually good financial advice here. My bank plays broker for all the assets I own and tbills are part of that.
FDIC wrote:
> As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
So to me that sounds like those „risk-free“ assets will get liquidated too.
I‘d love to hear an actual professional confirm/deny this. Because if it‘s true, then the real risk-free assets are gold, in your teeth, real-estate and BTC.
- kgwgk 4y agoThe bank's assets will be liquidated. If you have a securities account at a bank those are your assets, not the bank's.
- timdaub 4y agoso if I own $1M in Treasury bills I'll get them back while if I own $1M in cash then I'll get back $250k?
- kgwgk 4y agoYes. (I mean, you may even get more. But the important point is that in the first case you do not have a deposit and the bank doesn't owe you anything.)
- perfecthjrjth 4y agowith some caveats: if you keep $250k in your personal checking, another $250k in your personal savings, another $250K in a joint checking account, another $250K in a joint savings account, all accounts being with SVB, you will get $1M back. FDIC states "The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category"
- chernevik 4y agoBut accessing the securities in that account might be delayed if the bank were in receivership -- the FDIC might freeze everything while it sorted out what's what. I don't know how that works. If the securities are in an account at another institution that certainly wouldn't be a problem.