OK, so your stocks and mutual funds took a drubbing over the past couple of months, and Panicksville set in.

What went wrong? Why the market’s maniacal plunge? Corporate corruption and scandals? Accounting fraud? Political instability around the world? Or just super-nervous investors losing their trust and dumping their holdings?

Probably all of the above.

There’s plenty to freak out about. Had you invested $10,000 in stocks since last January you would have lost $2,314 according to the Dow Jones Industrial Averages, $3,698 based on the NASDAQ Composite Index, $3,052 in the S&P 500, and $2,549 from the Russell 2000. For most key indexes, those are the lowest levels in five years.

What Now?
Now what do you do? No one—not a soul—has a guaranteed answer to that one except for one thing: Had you sunk that same ten grand into a plain old bank savings or CD account, you would have earned about $300, fully insured. Yes, I know. Bank accounts are the least sexy thing around for your money. No chance of making a killing so you can someday live high off the hog. But would you rather have 300 extra bucks in your pocket or take a $3,000 bath?

Last month I bumped into two investors who’ve thus far lost $400,000 and $80,000, respectively, by riding the Wall Street roller coaster. “I don’t know what to do,” each of them moaned. “What about temporarily parking your cash in a bank?” I asked. “Maybe I will,” mumbled the first person. “No way!” bellowed the other loser. “I’m gonna sit and ride this thing out.” Jolly good luck to both of them.
Of course the Dow could suddenly soar upward (as it’s doing the very moment I’m writing this, and as the market always does because of its cyclical behavior), but that’s not the point. It’s that banks always have been, and always will be, one of the safest places to stash your cash during wild, unpredictable market swings.

Every dollar you park in a FDIC-insured (Federal Deposit Insurance Corp.) bank or thrift or in a FCUA-protected (Federal Credit Union Act) credit union is covered for up to $100,000 per person, including interest, at the same institution. In fact, with FDIC coverage it’s possible for a family of four to obtain up to $1.4 million of insurance at the same outfit through a combination of single and joint accounts and something called testamentary revocable trusts. Get the details by surfing to the www.fdic.gov Web site.

Banks Gain New Fans

There’s good evidence, at least, that more Americans are catching the insured-savings habit. Between January and July, they increased the money they keep in flexible passbook, statement-savings and money-market accounts by $190 billion to a total of $2.535 trillion, according to the Federal Reserve. Over the same period, their investments in CDs of under $100,000 declined by $34.3 billion to $924.4 billion.

Before you grab one of those accounts, however, know this: The odds are high that by doing some quick, easy shopping you can beat what your current bank is offering—often by more than one full percentage point. For every $1,000 you deposit, that’s 10 bucks more in your wallet annually. Remember, it doesn’t matter if the bank is a couple thousand miles away as long as it’s FDIC-insured. Plus, most of them have toll-free 800 numbers. Here’s how to locate those higher yields:

Go to the www.bankrate.com Web site and click on “Today’s Averages” at the top of the home page. This will show you what the typical institution is paying on each type of account. Then, also on the home page, click onto “Best Rates” and choose the kind of account you need. If you believe the investment market will remain shaky for the next several months, and you can afford to put the money aside, opt for a high-yielding three- or six-month CD. If you believe you’ll need ready cash over the next few months, go for a top-paying money-market account.

Granted, even the best-yielding bank accounts hardly top three percent. But it beats getting mouled by the bears and gored by the bulls on Wall Street in times like these.