Customers Rush to Larger Banks After Two High-Profile Bank Failures, Seeking Safety for Their Funds

In the wake of two high-profile bank failures, customers have rushed to the safety of larger banks, according to people familiar with the matter. Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) have all seen a significant increase in deposits since Silicon Valley Bank ran into trouble last week.

The Federal Deposit Insurance Corporation (FDIC) protects deposits up to $250,000 per account per bank, but any money over that limit is not protected. Last Thursday alone, customers pulled $42 billion from Silicon Valley Bank, draining the bank of its deposits. Small and regional banks have also seen deposit outflows, though a senior Treasury official told CNN earlier this week that those customer withdrawals have eased.

President Biden has reassured consumers that the banking system is safe, but the recent shakeup highlights the importance of diversifying your money. To protect your funds, experts recommend maintaining multiple accounts across several FDIC-insured banks, or at least multiple accounts at one FDIC-insured bank.

The exact amount of money that has been transferred to larger banks is unknown, but it is likely to be in the billions or tens of billions of dollars. The situation is still developing, and it is important for customers to stay informed and take the necessary steps to protect their funds.