Is my money safe? Can I trust my bank? Are my deposits insured? These are all questions on the minds of Americans after the collapse of yet another major American bank this week.

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On May 1, regulators seized San Francisco-based First Republic Bank, a large regional bank with assets over $200 billion that catered mainly to wealthy clientele and companies — and promptly sold all of its deposits and most of its assets to JPMorgan Chase.

It is the second-largest bank failure in U.S. history — but it comes as no surprise given the turmoil in the U.S. banking system after the collapses of Silicon Valley Bank (SVB) and Signature Bank, which both imploded in March after experiencing massive bank runs.

While depositors at all three banks maintain access to their money — either through a Federal Deposit Insurance Corporation (FDIC) fund in the case of SVB and Signature, or via JPMorgan in the case of First Republic — the failures have dealt a major blow to people’s confidence and trust in the U.S. banking system.

But if you’re now questioning the health of your own bank, try not to panic. There are many ways you can protect your money and ensure that your finances will be made whole again should your institution fall down.

Banks with the most uninsured deposits

A list of the top U.S. banks by proportion of uninsured deposits has been published by S&P Global, using data about banks that had at least $50 billion in assets by year-end 2022.

Unsurprisingly, SVB was the bank with the most uninsured domestic deposits at 93.8% or $151.6 billion. Meanwhile, Signature Bank ranked fourth with 89.3% or $79.5 billion of its total deposits being uninsured. In between the two fallen entities were the Bank of New York Mellon with 92% of deposits uninsured and State Street Bank and Trust Co. with 91.2%.

The newly fallen First Republic sat tenth on the list with 67.4% or $119.5 billion of its total deposits being uninsured.

Seeing so many banks with a percentage of uninsured domestic deposits way above those held by large U.S. banks could be cause for panic. But as David Hayes, author of the S&P report, rightly points out: “Not all uninsured deposits are equal.”

It can be hard to tell if a bank is at risk if you’re only looking at its proportion of uninsured deposits, according to Joseph Maugeri, CFP, Managing Director of Corporate Relations at CFP Board.

“It gives you a clue,” Maugeri told Moneywise. “But there are often other factors at play with uninsured deposits. They may actually be covered by other banks and there may be collateral for certain assets.”

Read more: Here's how much money the average middle-class American household makes — how do you stack up?

Why you shouldn’t panic

While any fragility in the U.S. banking system is concerning, Maugeri emphasized: “A run on a bank is very, very rare, and customers rarely lose money. It's the investors or bondholders that are normally hurt the most in these kinds of situations.”

Panic can cause people to make poor decisions, he said. Maugeri pointed to the recent SVB collapse as an example.

The value of the bank’s investments plummeted as interest rates rose, leading to the sale of its $21-billion bond portfolio at a loss of $1.8 billion in order to cover customer withdrawals.

That loss triggered a panic-driven bank run and SVB was unable to meet its financial obligations. The bank was shut down on March 10 and was placed into receivership by the FDIC.

“Many customers making quick decisions are what caused the bank run at SVB,” he said. “It was the panic that caused the crisis. Without the run on the bank, it would probably still be solvent at this point.”

As panic built in the days after SVB’s collapse, customers of New York-based Signature Bank started withdrawing deposits at an alarming rate, and the bank ultimately suffered the same fate.

“Keep in mind that, in most cases, your money is probably safe,” said Maugeri. “Check to see if your bank account or certificates of deposit exceed the FDIC insurance limits on a per account basis. That's pretty important.

“You should pause and ask yourself: ‘Am I really exposed?’”

If you’re concerned about the health of your bank, Maugeri suggests seeking the help of a financial advisor who can drown out the noise and explain your unique situation along with the options you have available to you.

The widespread panic about the possibility of further bank failures has subsided, and Maugeri believes “there’s a lot more rationality at play.”

The Treasury has asserted the “resilience of the banking system” — a statement supported by the fact that 11 of the nation’s largest banks, including Bank of America, Wells Fargo, Citigroup and JPMorgan — have teamed up to provide a $30 billion lifeline for struggling institutions.

How can you protect your money?

The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. Typically, deposits are protected up to $250,000 per depositor, per insured bank, per ownership category. This means a joint account with your spouse, for example, would be covered up to $500,000.

“FDIC insurance is something you should have full confidence in,” said Maugeri. “I don't believe there's ever been a case where the FDIC has not paid the insurance for banks.”

He added: “You can reduce your deposits to no more than the maximum insured amount by spreading your money between different insured banks ... In some cases, you may feel more comfortable moving money to a larger bank that maybe has less exposure to uninsured deposits.

“You could also move money into a money market account or a brokerage account, which in many cases, will pay higher yields.”

If you do move some money into a brokerage account, they typically have SIPC insurance to protect investors and help you sleep at night knowing your money is secure.

Finally, Maugeri said it’s important to ask questions and talk to your bank to find out what they’re doing with our money and what protections they have in place to ensure that you don’t lose any of your hard-earned cash.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.