What to expect from your failed bank

Checking, savings accounts are insured
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If you have a checking account or savings account at a bank that fails, your deposits are insured by the FDIC up to $250,000. If your savings account at that particular bank contains more than $250,000, the portion beyond that amount is not insured.

For customers with insured balances, expect that you may have no access or limited access to funds for a few days while the FDIC completes the takeover of the bank. "This can be disconcerting, but the FDIC keeps it to a minimum," says Kenneth Alverson, managing director at New York-based Novantas LLC, a consulting firm to the banking industry. Often, the disruption occurs only over a weekend, with the old bank closing business Friday and the new owner taking over by Monday morning.

Checking customers will likely need to order new checks from the new institution, but usually their old checks and debit cards will continue to work for a certain period of time, usually a few months. The only other roadblock savers may experience is "if you want to close the account and move it to another bank after the event happens, it can take longer because of all the paperwork," Alverson says.




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