Deposit

What is global financial crisis ? What harm can be to the personal small term deposits in the bank ?

They said if a bank declares "bank-rupt" all those personal small Term Deposits of hard earnings of poor people will be vanished. Please answer if it is really so. If so what is the use of bank-system.

Public Comments

1. Don't sweat, the bill passed Congress so all the banks are getting bailed out, or "rescued." If this economic poo continues, then you may find that you cannot get any money out of the ATM, but that is years (months at worst) away, and hopefully not going to happen at all. Small term deposits, less than a hundred thousand dollars, are in no risk at moment; but keep your eyes and ears open.
2. actually many countries guarantee peoples saving up to some amount, depending on the country - so even if bank disappears the government will pay people their money. financial crisis is more likely to affect you in some other way than you losing your money, for example half the people in my company had to be laid-off directly because of recent economic recession and those of us who didn't lose their jobs had their bonuses cancelled and in many cases weiges cut. even with the little risk of losing money on your bank account still many people are pulling their savings to hide them in sock drawer or something witch actually makes the situation worse and banks more likey to end up in bankrupcy
3. If the people lose faith in the system and try to get their money out then that is called a run on the bank what happens is the first the federal reserve in team with the government declare a bank holiday so people can not take their money all the same two day's and bankrupt the system. so prudent to take out a little bit but if everybody take it all we have to get in line at the ensd of the printing press . save the world leave 90% in.
4. Financial crisis is the uncontrol situation where almost all funding institution in a country or world involved. In a simple explanation (I try to) Economic of a country is link to others by bank system in this world to make payment or receive from its commodities trade. USD is the most currency used. Right now USA as a huge country has a financial crisis caused by the unstability of petrol and gas prices. Then, one of their biggest financial intitution was bankrupt. Eventhough their government try to secure some financial institution, such as AIG Insurance by take over some of their stocks as an effort to stabilize and reduce the possibility rush (condition when all customers take out all the money. In some country, goverment are protected the money that save in a bank, means, if a bank bankrupt, the government will take over bank obligations to make payment for customers that willing to take out all of money. The value protected in a country is not similar, it is depends on its financial regulation. So, in this situation make sure the financial regulations in your state or country, especially the limit that protected by government. The worst will be happend is rush situation explode, means no trust for financial institution including bank and government, somehow the economic situation will fall deeper. So do not be affraid, if your saving is not over the the protected limit.Go to the bank to have your saving book printed out regularly, so if something happened your update date are ready and easy to get the money out when you need it. I hope you could understand this...
5. A lot of foreign banks do not have insured deposits like here in the USA. If you are here in the USA your accounts are insured up to 100,000. However I think they raised it to 200,000 for one year. Many foreign banks do not have insured deposits so they go your funds go to.