Financial crisis: What you should know

Crisis sparks confusion, questions about personal finance
By Allison Linn

Here’s what you should know about how the crisis might affect your personal finances.

Checking and savings accounts

News that major banks including Washington Mutual and Wachovia have been pulled down by the crisis has sparked fears about whether Americans should trust their banking institutions to stay solvent.

Most banks are expected to continue functioning normally. Still, it pays to take a few simple steps to protect your assets in the event of a bank failure.

First, make sure that your bank is backed by the Federal Deposit Insurance Corp., better known as the FDIC. If your bank is a member of FDIC, then your individual accounts will be insured for up to $100,000, and your joint accounts should be insured for up to $200,000.

If you bank with a credit union, make sure that it is insured under the National Credit Union Insurance Fund, which provides similar protections for credit union account holders.

Retirement investments

The FDIC also provides coverage of up to $250,000 for certain retirement accounts, such as IRAs that are held in FDIC-insured financial institutions. If you have more than $100,000, it pays to check out the FDIC's online deposit insurance estimator.

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