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FDIC Consumer News - Summer 2003

Important Update: Changes in FDIC Deposit Insurance Coverage

The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.

If Your FDIC-Insured Bank Fails: What Really Happens

The FDIC continues to receive calls from bank customers who have serious misconceptions about how FDIC insurance works. "For example, some people say they've heard the FDIC takes up to 99 years to pay insured deposits after a bank fails, while others say they've been told the FDIC only pays pennies on the dollar," notes Martin Becker, an FDIC senior specialist for insurance claims. "Both of these statements are completely untrue." It's important to the FDIC that bank customers understand the basics about federal deposit insurance, so they can be confident that their insured deposits are safe.

As a depositor at an FDIC-insured institution, rest assured that in the unlikely event your bank fails, all of your deposits would be fully protected up to the $100,000 federal insurance limit. Also, the FDIC will pay your insured deposits, including principal and interest, as soon as possible after a bank fails, usually the next business day. In most cases, the FDIC will arrange for the failed bank's depositors to become customers of a healthy bank, and depositors will have prompt access to their insured funds through the new bank. Even in the rare cases in which the FDIC cannot find another institution to acquire the failed institution's accounts, payments to insured depositors begin within a few days.

What if your bank fails and you had deposits above the $100,000 federal insurance limit? It still may be possible to recover some or, in rare cases, all of your money over the insurance limit. The exact amount you'd get back would depend on factors such as the cost of the bank failure and how much the FDIC recovers by selling the bank's assets. Remember, though, that the overwhelming majority of depositors at failed institutions are within the $100,000 insurance limit and get quick access to all their money.

For more information about how FDIC insurance works when a bank fails, including how to make sure all of your deposits are fully protected, start at the FDIC's Web site — www.fdic.gov — or call or write the FDIC at the phone numbers or addresses listed on For More Information.

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Last Updated 09/15/2003 communications@fdic.gov