Latest news with #FederalDepositInsuranceCorporation
Miami Herald
10-07-2025
- Business
- Miami Herald
Big online investing firm collapses, files Chapter 11 bankruptcy
The entire American economy has been built around being able to trust the banking system. You put your money and deposit your paycheck at your local bank (or maybe a national one), trusting that the money will be there when you need it. That's something that was perfectly explained in the classic film "It's a Wonderful Life," where Jimmy Stewart's George Bailey convinces his small town to support his bank even though it can't offer them cash as people fear the bank has become insolvent. Related: Amazon gives employees rude awakening with harsh policy change "No, but thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house...(to one of the men)...right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others," he shared. Basically, he argued that if everyone believed in the bank, it would be there. "Why, you're lending them the money to build, and then, they're going to pay it back to you as best they can. Now what are you going to do? Foreclose on them?" he asked. Don't miss the move: Subscribe to TheStreet's free daily newsletter In the film, Bailey's personality stopped the run on the bank. Few, if any, banks have the cash on hand if a lot of customers want their money back at the same time, but we do have some more formal protection these days. Even when a specific banks fails, the Federal Deposit Insurance Corporation (FDIC) steps in. That agency insures deposits up to $250,000 per depositor, per insured bank account. People want to disrupt the traditional banking and investing model, but that has proven hard to do. One holy grail in that area has been allowing regular folks into investing in companies before they go public. Previously, only rich people could do that. Linqto makes big promises on its website. First, it describes itself as "an intuitive platform offering early access to private tech companies, before IPO or liquidity." It also sells itself well. "Most U.S. companies with revenue greater than $100 million are privately held – leaving an untapped opportunity to capture potential growth in innovative and emerging fields. Investing in this broader set of private companies can act as a powerful portfolio diversifier that has been shown to enhance risk-adjusted returns," it added. The problem is that there's a reason only rich people had access to investments like these. Your money isn't in something like your neighbor's house; it's in a startup with a theoretical value. More bankruptcy: Iconic auto repair chain franchise files Chapter 11 bankruptcyPopular beer brand closes down and files Chapter 7 bankruptcyPopular vodka and gin brand files for Chapter 11 bankruptcy Those values can become zero as soon as investors stop believing. Until a company makes money, its value comes from the number an investor is willing to accept as the value. That makes it a lot closer to buying Beanie Babies – which at least had scarcity for some models – than investing it in a business. There's a reason we have the current system of banks, private investing, and stock exchanges. It may not be perfect, but it's regulated. Most people understand that a bank account is safer than buying shares of even the bluest of blue chips, but even acquiring those shares is still much safer than investing in your buddy's new startup. Linqto has learned a hard lesson on the road to disruption: Every system flaw (like everyone not having access to pre-market investments) is a design feature, not a bug. Linqto, Inc., along with Linqto Texas LLC, Linqto Liquidshares LLC, and Linqto Liquidshares Manager LLC (collectively, "Linqto") has filed for voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas. Linqto took this step to protect and maximize stakeholder value through a court-supervised restructuring and expects to continue operating throughout the restructuring process. "Despite reducing expenses, the only way forward is to seek court-supervised protection that will let us restructure the business into a profitable, law-abiding organization while resolving the ongoing regulatory investigations faster," said CEO Dan Siciliano. Had the company not filed for Chapter 11 bankruptcy protection, it would have had to close down. Related: Iconic furniture, mattress retailer files Chapter 11 bankruptcy "The company faces potentially insurmountable operating challenges as a result of serious alleged securities law violations and related ongoing investigations by the Division of Enforcement of the U.S. Securities and Exchange Commission as well as other regulatory agencies. In addition, Linqto recently discovered several serious defects in the corporate formation, structure, and operation of the business that raise questions about what customers actually own and which management believes can only be fairly and effectively addressed through restructuring," it added. Linqto has received a commitment for debtor-in-possession financing of up to $60 million from Sandton Capital Partners, LP. Upon court approval, the additional liquidity from the DIP financing, combined with cash on hand, is expected to support critical business needs during these proceedings. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Business Upturn
26-06-2025
- Business
- Business Upturn
Grow Your Money with Interest Earnings: Why Savings Accounts are the New Heroes?
Today's interest rates, while lower than 2023 and 2024, are still high compared to 2009-2022. What would you do with your savings when interest rates are relatively high? For many, it's a matter of placing their money at a reliable financial institution, earning some returns, without taking too much risk. For these people, savings accounts could be a smart choice, offering stability and peace of mind. Let's break down why savings accounts shine when interest rates are relatively high—and how banks like SBI (California) can help you make the most of this financial opportunity. The Benefits of Savings Accounts in a Rising Rate Environment When the Federal Reserve raises interest rates, the effects ripple through the financial system. This is where the advantages of savings accounts stand out. Higher Interest Rates for Savers Savings accounts become more appealing when interest rates are high because they offer better returns on deposits. Banks like SBI (California) often work to provide the competitive interest rate for a savings account, allowing customers to earn more while keeping their money stable. This makes savings accounts one of the most straightforward ways to benefit from higher rates without too much hassle. Low Risk, High Reward Potential Savings accounts are usually lower risk compared to other options. They are usually insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000, per depositor, per insured bank, per ownership category. Meaning if your bank is FDIC-insured, your deposits are insured up to the legal limits regardless of market conditions. For individuals who are cautious about market volatility, savings accounts offer a steady and predictable way to grow funds. With high interest rates, this reliable growth becomes even more appealing, especially for those looking for fixed returns. Increased Competition Among Banks In the current rate environment, banks often compete to offer competitive savings interest rates to attract new customers. This competition can lead to promotional offers, such as higher APYs or reduced maintenance fees, giving customers more value for their savings. SBI California prioritizes offering competitive rates and personalized services, making it a standout choice for individuals seeking financial growth and trusted guidance. Key Factors Impacting Savings Account Performance While savings accounts & checking accounts have clear advantages, understanding the factors that affect their performance can help you make informed decisions. Fees and Minimum Balances Some savings accounts come with monthly maintenance fees or require a minimum balance to earn interest. These costs can eat into your earnings if not managed carefully. Always review the Schedule of Fees and Charges and Terms and Conditions of Your A ccount to weigh the fees and benefits. Account to weigh the fees and benefits. Account Features Look for features like online banking, mobile apps, and easy access to funds. SBI California offers a suite of digital tools that make managing your savings and other banking transactions easy. Bundled Products Consider pairing your savings account with other financial tools for added value. For example, you can apply for a debit card to streamline your daily transactions or to build credit alongside your savings goals. to build credit alongside your savings goals. With higher interest rates, you may consider capitalizing on savings accounts that offer competitive savings account rates. Remember, higher interest rates don't have to mean higher costs—they can mean higher savings if you research and act strategically. Start exploring your options with SBI California and watch your savings grow! Ahmedabad Plane Crash
Yahoo
07-06-2025
- Business
- Yahoo
Is your money safe in a bank during a recession?
As scary as they can be, recessions are normal — and temporary. But that doesn't make them any less painful. With the possibility of a recession dominating headlines in recent months, it's no surprise if you're concerned about the security of your money. You may even wonder if your money is safe in a bank during a recession. Two pieces of good news may help calm your fears: First, according to JPMorgan Research, the likelihood of a recession has dropped from 60% to 40% in recent weeks. Second, even if a recession does happen, your money is safe in a bank. Continue reading to learn how banks protect your cash, what happens when they fail, and how you can keep your money safe during a recession. Banks are generally safe at any time, including during a recession. In 1933, following the Great Depression, the Federal Deposit Insurance Corporation (FDIC) was created to promote consumer trust in banks. The FDIC protects insured bank deposits of up to $250,000 per customer, per insured bank, per ownership category, in case of bank failure. FDIC insurance doesn't apply to all account types; it only covers certain deposit accounts, such as savings accounts, checking accounts, money market accounts, and certificates of deposit (CDs). Money invested in stocks, bonds, mutual funds, and other investments isn't covered. Bank failures are unlikely, but they do happen on occasion, and especially during a recession. While there has only been one bank failure in 2025, there were 157 in a single year following the Great Recession. But even when banks fail, FDIC insurance protects bank customers in one of two ways: The FDIC may open a new account for you at an insured bank with a balance equal to your insured balance at the failed bank. The FDIC may send you a check in the amount of your insured balance at the failed bank. According to the FDIC's website, it has historically paid customers within a few days of failed bank closures. And since the creation of the FDIC, no depositor has ever lost insured funds. Credit unions and banks are both safe during a recession, provided they're both federally insured. Like banks, credit unions offer insurance on deposits of up to $250,000. Though FDIC insurance doesn't apply to credit union deposits, credit unions are insured by the National Credit Union Administration (NCUA), which provides similar coverage. While banks and credit unions provide the same amount of financial protection during a recession, credit unions have characteristics that may make them feel safer. For example: Credit unions are member-owned. Unlike banks, credit unions are nonprofit organizations and don't have to cater to shareholders. This generally means they put members' needs first and offer highly personalized customer service, which can provide some peace of mind during financially unstable times. Credit unions tend to have fewer fees, more affordable loans, and higher savings rates. Because credit unions are nonprofit entities, they can pass profits on to members in the form of lower fees and higher savings rates. These extra savings can go a long way during a recession, when members may be looking to cut costs wherever they can. Credit unions take less risk compared to banks. Because banks operate for a profit, they're generally willing to take on more risk in the pursuit of bigger returns. For example, the majority of subprime mortgages in 2006 were issued by banks, not credit unions. Credit unions, meanwhile, are more risk-averse, which can provide a sense of stability for their members. You can keep your money safe during a recession by keeping it in the right place. Here are some tips to make sure your cash is secure if and when a recession hits: Make sure you bank with insured institutions. FDIC or NCUA insurance protects your deposits as long as your bank or credit union is backed by one of these organizations. To confirm your bank is FDIC-insured, use the FDIC's BankFind Suite tool. To check a credit union's NCUA status, use the NCUA's Credit Union Locator tool. Get extra FDIC coverage. If you have a lot of money saved, $250,000 worth of insurance may not be enough. Luckily, some banks allow you to insure deposits beyond the standard $250,000 by using something called reciprocal deposits. This system spreads your money between multiple partner banks, each of which can insure up to the standard limit. Alternatively, you can insure funds beyond the $250,000 maximum simply by opening accounts at multiple banks. Build an emergency fund. An emergency fund is always important, but it's particularly crucial during a recession. Having cash on hand in a safe, high-interest account like a high-yield savings account gives you extra comfort and protection if an emergency does happen. Read more: Recession-proof your money: How to protect your savings, investments, mortgage, and more Yes, keeping your money in the bank during a recession is generally a good idea. You can also keep your money in a credit union. As long as your bank or credit union is insured by the FDIC or NCUA, your deposits will be safe up to federal limits. Both banks and credit unions are safe places to keep your money during a recession. Banks are insured by the FDIC, and credit unions are insured by the NCUA. Both types of financial institutions insure up to $250,000 per depositor, per account category. Both banks and credit unions are safer than keeping physical cash, which can get lost, stolen, or damaged. Generally, the government can't take money from your bank account in a crisis. However, it may be able to garnish wages and seize your tax refund if you owe outstanding debt, such as federal student loans.
Yahoo
03-06-2025
- Business
- Yahoo
4 Money Management Benefits of Keeping Your Bank Accounts Organized
A record 96% of households in the United States have a bank account, according to the Federal Deposit Insurance Corporation. Bank accounts are a useful tool for managing money effectively, and there are many different ways people can use bank accounts to get organized, track their expenses and improve their financial lives. Simon Blanchard, an associate professor at Georgetown's McDonough School of Business, conducted a survey on financial mindfulness, which found that practicing financial mindfulness can lead to better financial outcomes. Read Next: Check Out: Keeping an organized system is one way to effectively manage money and achieve financial mindfulness. Here are some key benefits of keeping your bank accounts organized. Also see how many bank accounts you should have. The unknown is incredibly stressful for people. Knowing what's in your bank account, when you get paid and when your bills are due can reduce financial stress. Even if you don't have a significant amount in your accounts, being aware and mindful of where you stand is a positive first step in money management. Explore More: When your bank accounts are organized, it's much easier to track your expenses. You can look to see that your bills have been paid and that your paycheck arrived on time. Tracking your expenses takes only a few minutes a day and can help you feel on top of your finances. When you're organized with your finances, it's much easier to catch fraud. You can see if someone used your bank information without your authorization. You can also see if there are unknown charges on your accounts and report them to your bank immediately. Organizing your accounts and managing them in a specific way can help you prioritize and reach your financial goals. For example, one common money management system is to keep a savings account for each financial goal you have, whether that's buying a new car or taking your family on a vacation. Here are a few examples of money management systems you can try using bank accounts. Sahirenys Pierce, a financial planner and the creator of Poised Finance & Lifestyle, created a money management method called the High 5 Banking Method. With this method, Pierce advised people to create five bank accounts: two checking accounts and three savings accounts. Use one checking account only for bills and the other for lifestyle purchases, like entertainment. Your savings accounts should include an emergency fund, a short-term goals savings account and a long-term goals savings account. Many banks now offer goal-based savings accounts. This is where you can edit your bank account's name to reflect your savings goals. This works especially well for savings goals that you want to reach in five years or less. For goals that are beyond five years, it may be wise to consider investing. Many experts share their money management systems, but they often center around checking accounts and savings accounts. It's also important to incorporate investing accounts into your money management strategy. In addition to your employer-sponsored retirement accounts, you can open your own investment accounts in order to reach other goals you want to achieve before retirement age. More From GOBankingRates 25 Places To Buy a Home If You Want It To Gain Value Clever Ways To Save Money That Actually Work in 2025 This article originally appeared on 4 Money Management Benefits of Keeping Your Bank Accounts Organized Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
28-05-2025
- Business
- Reuters
U.S. banks see profits climb in first quarter: FDIC
WASHINGTON, May 28 (Reuters) - The U.S. banking industry reported $70.6 billion in profits in the first quarter of 2025, a jump of 5.8% from the previous quarter, the Federal Deposit Insurance Corporation reported Wednesday. The regulator said profit growth was primarily due to climbing noninterest income at banks, which was up 7% on the quarter. "With strong capital and liquidity levels to support lending and protect against potential losses, the banking industry continued to support the country's needs for financial services while navigating the challenges presented by economic uncertainty, elevated inflation and interest rates, tighter credit, and elevated unrealized losses," said FDIC Acting Chairman Travis Hill in a statement. However, banks also reported slight growth in provision expenses against potential loan losses. Those expenses were up 0.3% quarterly to $22.5 billion, and now stand 9.1% higher than a year ago. While bank asset quality remained generally favorable, with past-due loans relatively flat, the FDIC noted that banks are still grappling with struggles in commercial real estate, where overdue loans hit 1.49%, its highest level since 2014. Loan growth was also reported to be relatively slow, with balances climbing just 0.5% from the previous quarter. In terms of annual growth, banks are currently seeing just 3% growth, which is below the pre-pandemic average of 4.9%, the FDIC said.
