With inflation at its peak and frequent interest rate hikes, borrowing money is becoming expensive. And economists around the world have lead to conclusion that the economy of United States of America is headed for a recession.

Recession is “a significant decline in economic activity” that lasts for more than a few quarter. And this makes everyone ponder whether it is safe to leave their money in the bank or if it’s a good time to pay down debt.

Is money safe in the bank during recession?

Simply put, yes, your money is safe in a bank during a recession. But it is important to check if the banking institution where you have your money is insured by regulatory body. E.g. Federal Deposit Insurance Corporation (FDIC), an independent federal agency that protects against financial loss if an FDIC-insured bank or savings association fails.

Protection generally amounts to over $200,000 per depositor per account at a federally insured bank or savings association. This includes checking accounts, savings accounts, money market accounts and certificates of deposit (CDs) at traditional banks as well as online-only banks.

To find out if your bank carries FDIC insurance, look for the title “Member FDIC” on the bank’s website. Many banks even incorporate small “Member FDIC” icons in their logos.

How do you take care of your money during a recession?

Recession or not, it’s important to prepare and take care of your finances for tough economic times. According to various experts, here are some tips to help recession-proof your finances, as recommended by experts:

• Don’t panic
• Pay off high-interest credit card balances.
• Evaluate your individual financial situation before paying off other debts
• Create a substantial emergency fund
• Identify ways to cut expenses
• Don’t make knee-jerk reactions with your investments
• Think about income opportunities