Is your money safe in AZ?Posted: Updated:
Most of us count on banks to handle our money.
But with the stock market in turmoil, and fears from Washington, people like Rick Trejo are choosing the piggy bank instead.
"I mean I don't know what to do - put it under the pillow or under the mattress but in the bank is one of the places I'm last thinking of doing it right now," Trejo says.
Because even though the FDIC insures each individual up to 100-thousand dollars and each individual's retirement account up to 250 thousand dollars, Trejo admits...
"I'm hoarding my money right now yes I am."
People aren't trusting the FDIC
"We're seeing an increase in the people who are taking cash out of banks" says Tanya Wheeless with the Arizona Banker's Association.
"Concern is warranted, irrational fear is not. No one has ever lost a dime of insured deposits through the FDIC. The FDIC fund is healthy."
Wheeless points to recent closures, such as 1st National Bank of Arizona, Silver State, Washington Mutual, and Citi Group's recent acquisition of Wachovia.
But Wheeless says no one lost insured money.
Still, Jason Meyers with Desert School Federal Credit Union says "We're seeing people come to us from banks asking about credit unions."
Credit unions are not backed by the FDIC. Arizona credit unions are insured by the NCUA or the National Credit Union Administration.
It works much like the FDIC, and while Meyers says members are asking questions, they're not seeing them withdraw money.
He insists it is because credit unions are safe.
"Are we seeing delinquencies? Of course. But not nearly as high as the other financial institutions in town. The reason being is because we never gave loans to people that didn't qualify for them and through the housing boom we remained very conservative when it comes to lending."
And Wheeless from the bank association insists when it comes to banking...
"if you have less than 100-thousand dollars in a bank you have nothing to worry about."
Still, residents like Trejo are worrying.
"It's not much money that I have in there but it's still money and it's my money."