FOX 2 (WJBK) - There is growing concern regarding the country's banking system after two large banks suddenly collapsed.
"Look, the bottom line is this: Americans can rest assured that our banking system is safe. your deposits are safe," said President Joe Biden.
It was not the affirmation anyone outside the financial world expected on Monday.
President Biden tried to calm any fears after two banks collapsed Friday: California-based Silicon Valley Bank and Signature Bank out of New York. Both created a ripple of uncertainty not seen since the financial crisis of 2008.
Timothy Wyman is a managing partner for the Center for Financial Planning.
"There’s been some concerning news the last several days," he said. "The biggest is probably on Friday, we have Silicon Valley Bank taken over by the FDIC (Federal Deposit Insurance Corporation). That doesn’t happen every day."
"So, quite frankly, most of us don’t have $250,000 sitting in a bank - so the direct impact is probably little to none," he said.
Indirectly, Wyman says there are questions about whether the impact leads to additional bank failures, a potential recession, and additional rate hikes from the Federal Reserve.
Some lawmakers believe the collapse is due to the rapid — and increased — rate hikes to temper inflation.
In response, the US government has assured customers they’ll regain in full any financial losses.
Silicon Valley and Signature Banks are niche banks, which serve companies that help startups and privately owned businesses. Although that doesn’t cover most of the general public, one lesson here is, make sure you have a rainy day fund.
"We want to make sure that if we do have that next ice storm in the Detroit area, that we’ve got a few hundred or a few thousand dollars to carry us through that time period," he said.
One more bit of advice — Wyman says don’t put all your cash or capital into one bank, make sure to diversify.