Is it better to panic when you hear about bank failures or to plan for them? Ultimately, it’s your choice.

Many banks are on the FDIC’s watch list… probably around 100 of them, but failure doesn’t mean that you will be a victim.

During the Great Depression of the 1930’s, the Federal Deposit Insurance Corporation was formed to protect depositor accounts. Today, that protection reaches up to $100,000 on normal accounts, and up to $250,000 on IRA’s.

Now, if you have more than these sums, you have options. First, is to take the sums over these limits and move them to different accounts in different banks. Spread the risk and avoid having more than $100K in any single account or even the same bank. Unbeknownst to you, a bank may “tie” your accounts together which might deem multiple accounts to be only one (like a combination of checking, money-market and savings). It is best to have diversity. Deposit insurance coverage is not based on the type of deposit such as checking or savings accounts. Insurance coverage is based on the type of ownership category that the funds are titled under. All types of deposits—certificates of deposit (CDs), checking, savings, money market deposit accounts, and NOW accounts—held in the same name(s) in the same ownership category are added together to calculate deposit insurance. The most common account ownership categories are: Single accounts, joint accounts, revocable trust accounts and certain retirement accounts.

Second, ask your banker about your insurance coverage. They may urge you to split up accounts or take some of your money to other banks, thus ensuring that you are fully insured.

We very strongly urge depositors to be smart about your own money management and patient when failures do occur. Even if forty or seventy banks did fail, which is highly unlikely, if you’ve met the requirements for your accounts, your money is quite safe. But don’t wait until it’s too late and cry about it later. Crying won’t help. Action today to protect your funds will.

Be smart, be careful and be alert. These three things should keep you fully protected.

Visit www.fdic.gov for more information.