These events naturallyraised concernsabout the stability of both traditional anddigital banking institutions.

For years consumers have begun turning to online-only banks and fintech platforms for their banking needs.

These institutions often promise convenience, higher interest rates, and innovative features.

But how safe is your money outside of traditional banks?

But here’s the thing: Manydigital banks and fintech platformsaretechnically FDIC-insured.

So how come consumers are getting locked out of their accounts?

Is your money really safe in a digital bank?

While the SVB and Signature Bank failures were significant, they werehandled relatively smoothlyby regulators.

This event highlighted a crucial difference between traditional bank failures and the collapse of fintech intermediaries.

However, this assumption has proven to be oversimplified.

While FDIC insurance does apply to many fintech-linked accounts, it’s important to understand its limitations.

Here are key points for consumers to consider:

1.

Unfortunately,it’s difficult for consumers to assesshow responsibly individual fintechs have set up accounts promising FDIC insurance.

Trusting fintech introduces a significant amount of risk.

This protects you up to $250,000 per depositor, per bank, in case the institution fails.

Here’s the FDICsbank suitefor a list of FDIC-insured banking institutions.

2.Understand where you’re putting your money:Research how the institution makes money.

Be cautious of platforms offering unusually high returns without a clear explanation of how they generate those returns.

4.Diversify your funds:Don’t keep all your money in one place.

Spread your savings across different types of accounts and institutions to minimize risk.

5.Monitor your accounts:Regularly check your accounts for any unauthorized transactions or changes in terms and conditions.

6.Be wary ofhigh-yield promises:If an offer seems too good to be true, it probably is.

Be especially cautious of platforms promising significantly higher returns than the market average.

7.Check regulatory compliance:Ensure the institution is properly licensed and regulated.