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“Should people take their money and hide it in their mattresses? No,” Shepherd said. “But I would be making sure my money was safe before I worried about interest.”

SENECA — IndyMac. First Integrity. ANB Financial. Hume. Douglass National. Miami Valley. Net Bank. Metropolitan Savings.

What do these names have in common? They’re all banks and thrifts that have failed since 2007, according to the Federal Deposit Insurance Corporation (FDIC). Add to that the plight of mortgage giant Federal National Mortgage Association (better known as Fannie Mae), which also comes on the heels of a federally backed JPMorgan Chase takeover of investment firm Bear Stearns.

“People are worried about how safe their savings are, and I completely understand that,” Fred Shepherd, president of Community First Bank in Seneca said. “Safety and soundness are important things to think about when protecting your money.”

Mortgages, banking and indeed the economy as a whole, are in the midst of a slowdown in some parts of the nation, and in the middle of a full-fledged crisis in others. Banking has taken a hit partly because of the national mortgage market, which has suffered a record number of foreclosures in recent years due to subprime loans being given by mortgage brokers to high-risk borrowers. While the vast majority of commercial banks do not engage in such risky lending, the overall economic picture is causing a decreased confidence in savings and investments, Shepherd said.

“The banking industry is safe,” Shepherd said. “But some are in better condition than others.”

The FDIC insures all savings up to $100,000, meaning a bank carrying someone’s savings can fail, and the depositor can still recoup that money. A retirement account can be insured up to $250,000. The FDIC’s funds come from insurance paid by all commercial banks. This is a way to spread the risk of bank failures among all regulated banks and thrifts, thereby lessening the risk to depositors.

When a bank fails, however, there is no guarantee uninsured deposits will be paid back. The FDIC also does not insure any money invested in stocks, bonds, mutual funds or annuities, even if these were bought from an FDIC-insured bank.

Raymond Sauer, economics department chair at Clemson University, said the mortgage crisis has made bank shares risky investments, which consequently call into question the health of a bank, which then leads to worries about savings’ safety.

“Bad loans are creating havoc with bank balance sheets,” Sauer said. “Bank shares have taken a huge hit, particularly Wachovia. Much of the re-pricing of bank shares of stock is simply a sober reassessment of what the true market values of these banks are. So it is not just fear that is involved.”

The best way to protect one’s savings is to ensure money isn’t being saved at a bank at high risk for failure. Specifically, Shepherd said people should look at the safety of their money rather than an enticingly high interest rate on a certificate of deposit.

“Should people take their money and hide it in their mattresses? No,” Shepherd said. “But I would be making sure my money was safe before I worried about interest.”

Shepherd said there are important aspects of a bank one must consider, such as its capital, which serves as a buffer against any losses. A highly capitalized bank would provide protection for savings. Shepherd said independent groups like bankrate.com serve as aids to an individual wanting to ensure the safety of his or her savings. Bankrate.com uses tests to measure elements like capital adequacy, asset quality and profitability to assess a bank’s strength.

Shepherd said there is a confidence crisis in the financial market, and he said he expects more banks and other financial operations to fail as the year goes on. But in general, banking is safe — insured by a massive FDIC insurance fund totaling more than $52 billion in assets, he said. Moreover, while shareholders in bank stocks might have even more reason to worry than mere depositors, there could be a resurgence ahead if “they stay in it long enough,” Shepherd said.

While depositors have little to fear in banking, Sauer acknowledged bank shares are currently unstable.

“If an investor wants low risk securities, bank shares may not be the place to be,” Sauer said. “But when we get out of this mess bank shares are likely to bring high returns to investors who can tolerate the current risky environment.”