Half of Americans Fear for Their Bank Holdings

Experts say there's no reason to fret thanks to FDIC insurance
By Arden Dier,  Newser Staff
Posted May 7, 2023 3:25 PM CDT
Half of Americans Fear for Their Bank Holdings
The Federal Deposit Insurance Corporation (FDIC) seal is shown outside its headquarters, March 14, 2023, in Washington.   (AP Photo/Manuel Balce Ceneta, File)

Americans appear as worried about their money in banks now as they were during the 2008 financial crisis. Some 48% of US adults are "very" or "moderately" concerned about money held in bank accounts, according to a Gallup poll that was conducted after two banks failed, but before the failure of a third. That's on par with September 2008, following the Lehman Brothers bankruptcy, when 45% of US adults said they were "very" or "moderately" worried about the safety of their bank-held money. By December 2008, after government bailouts sought to rescue banks, the figure dropped to 41%.

Polled from April 3-25, 19% of respondents said they were "very worried," 29% said they were "moderately worried," 30% said they were "not too worried," and 20% said they weren't worried. However, there were major differences across political affiliations and income and education levels. "Consistent with other polling that shows economic concerns deepen if your party is not in the White House," 55% of Republicans and 51% of independents said they were very or moderately worried about their money, compared to 36% of Democrats, per Axios.

The rate was 36% among college-educated Americans but 54% among those without a college degree. According to Gallup, less-educated Americans may not know about FDIC insurance, which automatically protects depositors at Federal Deposit Insurance Corporation-insured banks from loss up to at least $250,000. Amid the recent bank failures, "no depositor has lost money—including those with funds over the quarter-million dollar limit for FDIC insurance," as Axios points out.

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"The vast majority of banks are fine and this is something our system can handle," former FDIC chair Sheila Bair told CNN this week. "The US banking system is sound and resilient," added Federal Reserve Chair Jerome Powell. Still, significant levels of worry among lower-income Americans (around 50% for those with incomes below $100,000, compared to 40% for those with higher incomes) may reflect "less trust in a system they feel often leaves them on the outs," per Axios. They may see bank failures as "bad for them" overall, Brookings senior fellow Aaron Klein tells the outlet, pointing to the rise of certain bank fees following the 2008 financial crisis. (More banks stories.)

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