US bank failure or acquisition is sometimes inevitable. This article outlines the events that follow.
FDIC Insurance Coverage
Deposits in a bankrupt bank are normally insured by the Federal Deposit Insurance Corporation (FDIC). Insurance coverage is up to the maximum level. The normal insurance coverage limit for deposits at FDIC-insured banks is $250,000 per depositor, ownership type, and bank. This coverage includes the deposits listed below.
- Checking accounts
- Savings accounts
- Money market deposit accounts
- Certificates of deposit (CDs)
Bank Acquisition
Accounts are moved to the acquiring bank in a bank acquisition. The acquiring bank normally assumes all of the assets and liabilities of the failed bank. This includes customer deposits. Your account numbers, terms, and conditions may remain the same. You can continue to access your accounts as usual via the acquiring bank.
Continued FDIC Coverage
The FDIC continues to insure deposits transferred to the acquiring bank. Insurance claims are subject to the appropriate coverage limit. The acquiring bank is responsible for upholding FDIC insurance coverage on transferred deposits. Accounts remain protected under FDIC-insured institutions.
Notification
Customers are notified by letter or email with account status information. This includes any modifications to the account terms and conditions. Instructions are provided for accessing accounts via the acquiring bank. Examine these notifications closely. Follow any instructions issued by the bank or the regulatory authorities.
Access to Funds
Depositors retain access to their funds in a bank failure or acquisition. The acquiring bank allows customers to continue managing their accounts and carrying out transactions as normal.
- ATM access
- Debit cards
- Checks
- Online banking
- Other banking services
Thus, if your US bank fails or is acquired, your deposits are normally covered by FDIC insurance up to the applicable limit. In the event of an acquisition, your accounts may be transferred to the acquiring bank, but you should maintain access to your funds and banking services as usual.
Stay updated about the status of your accounts. Study any changes related to the bank failure or acquisition.
