If Your Bank Fails
With 9 more banks failing this past Friday, this is a good article to read below. It goes into detail about why a bank would fail, what the FDIC covers, and more importantly what it doesn’t cover.
Here is another important question:
Q: How long does it take for the FDIC to pay people back?
A: In most cases, another bank takes over the closed bank’s deposits, and ATM cards, debit cards and checks continue to work until the new bank transitions customers to its systems.
If the FDIC can’t find another bank to take over, the agency uses its insurance fund to make payouts to the failed bank’s customers. The law requires that deposits be paid out “as soon as possible” after an insured bank fails. That has typically been just a few days after the bank closes. In most of these cases, the FDIC will provide new accounts at another insured bank, but it will issue a check to each depositor if new accounts can’t be arranged.