What happens to your money if your bank fails
12 banks have failed since the beginning of the year. To see the complete list, check here.
What happens to your money when a bank fails ?
FDIC insurance automatically covers up to $100,000 per institution per person. So if you have two accounts (one savings, one CD) at a bank and each has $75,000 in it, then the last $50,000 isn’t insured.
If you’re on a joint account, then it’s $100,000 per person on that account. So you and your spouse/partner could collectively have $200,000 in that account and still be covered.
However any amount that is not insured will vanish into thin air if your bank goes down. Check the video below of a lady who lost 20,000 USD when her bank failed.
Morale of the story: Don’t keep more than 100K USD in one bank. Diversify your money between banks.
This post applies to US banks only. I am not aware of the exact details regarding foreign banks.
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September 25th, 2008 at 7:19 am
specific to cash, it does not vanish in think air. So if one loses cash savings due bank failure: all it means is some smart guy made fees/commission money by lending your money to some moron on the wall/main street.
September 25th, 2008 at 7:20 am
And the moron on wall/main street does not want to pay it back
September 26th, 2008 at 10:46 pm
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