What if my Bank fails?
Banks fail all the time. They are generally bought out by other banks. Over a thousand banks have failed in the past 20 years. It is bad news for their stockholders, but customers accounts are insured by the FDIC. Wachovia’s stock has gone from $52 to $2 in the past year, a loss of about $100 billion to its shareholders. Bank customers meanwhile have full access to their insured accounts. When banks are purchased by other banks, insured accounts remain intact. If the FDIC has to take over a bank, they take care to cause little if any interruption of service. It is important to limit your risk by adhering to the FDIC deposit limits. Do not keep more than $100,000 in any one bank and make sure your deposits are in an insured bank. The insurance limit is per depositor per bank. Joint accounts are insured to $200,000. The limit on insured IRA accounts (invested in cash at an insured bank) is $250,000 per depositor.