Financial Pros Answer Your Top Questions

Winterhalter: "For the time being, things should continue just as they always have. You will be able to make deposits and withdrawals normally. In time, the bank name may change on your account, but you can continue with your regular banking. Now is a good time to make sure your bank or savings and loan institution is FDIC insured. Go to www.fdic.gov/deposit/ and look for "Find Bank." FDIC Insurance covers up to $100,000 per depositor per bank. Certain bank retirement accounts are insured up to $250,000/owner. This insurance covers all types of deposits at an insured bank, including checking, savings, money markets and certificates of deposit. The insurance limit can only be increased if the accounts are held in different categories of ownership."

Paul Palazzo, Managing Director of Financial Planning, L.J. Altfest & Co. Inc, New York: "If you had money in two banks that have now merged, be careful that your total does not exceed insured limits. If your bank is insured by the FDIC, the money you hold in checking, savings and NOW (negotiated orders of withdrawal) accounts, as well as CDs and bank money markets, is protected up to certain limits -- $100,000 per person per bank, and another $100,000 per person for accounts held jointly. If you're wondering if your bank is covered, check at www.fdic.gov or call 877-ASK-FDIC."

Hutchins: "As a borrower, the underlying cause of the mergers signals tighter credit and you may find it more difficult to borrow. Your cost of borrowing is also likely to rise."

Q: I keep my money in money market funds because I thought they were safer than the stock market. But now I'm hearing that money market funds are in trouble too. Should I take my money out?

Connie Stone, certified financial planner, Chagrin Falls, Ohio: "The amount you had in money market accounts as of Sept. 19, 2008, is insured. Some financial institutions (i.e. Vanguard) are considering adding another layer of insurance (Treasury guarantees) for their money market accounts. Yields on money markets are low compared with CDs. You might want to put some of your cash in 6-, 12- and 18-month CDs to increase the yield if you do not intend to use the money during those timeframes. Otherwise, your money should be safe in money market funds. Check with your financial institution to see if they're adding Treasury guarantees on money market accounts."

Engle: "No. There is a new government effort to backstop money market funds. You should consider this question: 'To whom does my money market make 30 day loans?' Municipal money market funds make short-term loans to state and local governments. These governments get revenue from taxation, and can raise taxes if they have a shortfall. Muni funds are the second safest form of money market, after U.S. Treasury money market funds."

Winterhalter: "Most institutions try very hard to make sure money market account values do not go below $1 per share. It is suggested that you check with your financial institution to see what safeguards they have in place. Being knowledgeable about your finances will help you to make reasonable and educated financial decisions. Brokerage accounts carry SIPC (Securities Investors Protection Corporation) insurance, which covers you should your brokerage fail. It covers cash assets up to $100,000. Some companies purchase insurance above these limits to provide customers additional protection above the SIPC limits. Be sure to keep current copies of your statements."

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