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By MarketWatch on November 13, 2009:

http://articles.moneycentral.msn.com/Banking/BetterBanking/if-your-bank-fails-will-you-be-ready.aspx

"...If your bank fails, will you be ready?

More than 100 banks have gone belly up in 2009 alone. Your bank could be next, so figure out now how much of your money is protected -- and how much isn't. If you've heard about all the bank failures -- 122 this year -- you've got to be wondering about the safety of your money.

Five banks failed Nov. 6. The largest was San Francisco's United Commercial Bank, the main operating subsidiary of UCBH Holdings, which received $299 million in government help through the Troubled Asset Relief Program last year. Looks like taxpayers won't be getting that money repaid.

It really does make you wonder about protecting your money. Here's what you should know:

Know what's protected: Money parked in bank accounts is usually protected by the Federal Deposit Insurance Corp., but that doesn't mean all your money is safe. The FDIC insures checking accounts, savings accounts, certificates of deposit and retirement accounts placed in deposits at insured institutions. You can ask your bank whether it's FDIC-insured. By the way, money that is placed in a money market deposit account as part of your checking is protected, but don't confuse that with a money market mutual fund, which is not.

Know what's not protected: Not every dollar sent to your bank is protected, including holdings in mutual funds (stock, bond or money market mutual funds), annuities, stocks, bonds, Treasury securities and other investment products. And what about that prized ring passed down by Grandma or other contents in a safe-deposit box at your bank? Those aren't protected either...."

Regarding the "protection" of the contents of a safe-deposit box, here's another important issue that I learned from personal experience: The contents of a safe deposit box may not be as private or confidential as most folks just automatically assume. In fact, I know of one small-town bank manager (for one of the largest U.S. banks) that kept a list of safe-deposit box contents of some of the bank's elderly customers in order to help "protect" them.

Talk about the fox guarding the henhouse!

- Ed Smith, Publisher
The EHS Letter Manual