Are Your Bank Deposits Safe?
Thursday, November 5, 2009 | Written by Jim Beach
NO, they are not!! I was shocked to learn today that COMMERCIAL bank accounts are not insured like our personal accounts. Was I last to learn this? Did you know this?
The FDIC insures every person for $100,000. Importantly, it is $100,000 per person, per bank. NOT per account. So if you have $142,000 in one bank, even if its in several accounts, the government will only insure you for the 100k. So, you must divide your assets between several banks. I knew all this.
But, I was shocked to learn that commercial accounts are not protected at all. Again, I feel stupid. Michael Shames-Yeakel of Chicago lost $27,000 that a hacker was able to steal from his business account. Unique Industrial Products of Sugar Land, Texas lost $200,000 when their account was hacked and emptied. A school district in western Pennsylvania had $700,000 disappear during winter holidays!
How does this happen and why aren’t the banks responsible? Normally, it happens because the companies’ computers are hacked, not the banks’. It happens quickly. Hackers drive by your house or business place and using scanners available on eBay capture your IP address and router password. After that, they use your own network or IP address to steal from you. Or, they trick business owners with fake websites, causing the owners to give account details.
What is the solution? Constant vigilance of your account is a good start. Never give any website your personal information. Anti-virus and spyware software is an absolute must. Or, move to a bank that sends text messages to your phone after every withdrawal. (Citibank offers this service; BofA does not.) Better yet, some bank accounts can be set up such that electronic transfers are not allowed. Running a great business is all about these small details. Your entrepreneurial of running your own business dream can be ruined by sloppy banking.
This is a gret warning. I had no idea that business accounts weren’t insured for this sort of loss. Thank you for posting.
Pretty awesome stuff, I love it hah