FDIC's How Money Smart Are You? (2024)

FAQs

What it means to be money smart? ›

You're planning ahead for your future

Those who are good with money are planning ahead rather than living for today. Whether you're saving to buy a home, pay for your children's education or ensure you have enough saved for retirement, setting clear financial goals is important.

FDIC Money Smart for Young People features four free age-appropriate curricula that promote financial understanding and are specifically designed for pre-kindergarten through 12th grade educators. Each curriculum includes: An educator guide, student handouts, and powerpoint slides.

The Facts:

The truth is that federal law requires the FDIC to pay deposit insurance "as soon as possible." For insured deposits — those within the deposit insurance limits — the FDIC almost always pays insured depositors within a few business days of a closing, usually the next business day.

Insiders, for example, a company's board members or executives, are viewed as smart money as such individuals generally have extra information regarding their respective organizations. As a result, when such persons buy equity shares of their companies, they have confidence in the business's prospects.

Those who are financially healthy are successfully managing all aspects of their financial life. They have good to excellent credit, a handle on debt, an emergency savings fund and are on the right track for retirement.

Certificate of deposit (CD)

Like a savings account, a certificate of deposit (CD) is often a safe place to keep your money. One big difference between a savings account and a CD is that a CD typically locks up your money for a set term. If you withdraw the cash early, you'll be charged a penalty.

The FDIC adds together the balances in all Single Accounts owned by the same person at the same bank and insures the total up to $250,000.

What is the FDIC? The FDIC—short for the Federal Deposit Insurance Corporation—is an independent agency of the United States government. The FDIC protects depositors of insured banks located in the United States against the loss of their deposits, if an insured bank fails.

In conclusion, banks cannot seize your money without your permission or a court order. However, there are scenarios where banks can freeze your account and hold your funds temporarily.

What happens if FDIC runs out of money? ›

Still, the FDIC itself doesn't have unlimited money. If enough banks flounder at once, it could deplete the fund that backstops deposits. However, experts say even in that event, bank patrons shouldn't worry about losing their FDIC-insured money.

Rule - The Six Month Grace Period

In effect, the deceased is still considered an account owner. After the six-month grace period ends, the FDIC will insure the deposits based on the actual ownership of the funds and will not consider the deceased as an account owner.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals. Let's take a closer look at each category.

For an interest-only retirement, you'll need to have a large nest egg. How big a nest egg depends on your target income and the interest rate. For example, an annual income of $48,000 would require a nest egg of $1.6 million, assuming a 3% interest rate. And that's not even accounting for inflation.

Americans say they'd need to earn about $94,000 a year on average to feel financially independent. That's about $20,000 more than the median household income of $74,580.

Characterized by economy, frugality, or good management of finances or resources. thrifty. miserly. frugal. sparing.

This effect refers to the influence that the investment decisions of experienced and knowledgeable investors (smart money) have on market trends and asset prices. Their actions are often considered a leading indicator of market movements, influencing other investors' decisions.