by Jackie Row

Created on: October 31, 2009   Last Updated: November 09, 2009

You read and hear about banks closing every year. What is a person to do after this situation occurs? This year alone 116 banks in the United States have failed since the end of October 2009. No region in the United States has been able to escape the closures. The economy is continuing to bottom out from the nation's worst economic nightmare since the Great Depression.

How will I know my bank is closing?

Banks will notify you in writing immediately after the bank has been closed. Make sure that the address you have on file with the bank is correct so you will receive notification.

What happens when your bank closes?

According to the FDIC "A bank is closed when it is unable to meet its obligations to depositors and others." The FDIC will step up to running the bank when obligations are not being met and will sell the bank to another that is able to take on the business of the failed bank. The assuming bank would have to be financially healthy.

Most people will assume that the bank will automatically discontinue services, this is not true. Continue to make payments on any loans you may have with your bank! Since it is usually very likely that the FDIC will work very hard and efficiently to find a suitable bank you will be able to continue using member services. You may not even notice that your bank has made the transition because it can happen over night without any interruption in services. Access to on-line billing features, ATM's, and utilizing payment methods with debit cards or checks will still be available.

At the time that the failed bank is taken over you will receive notification. This is mailed to you with your first bank statement.

Is your money safe in the bank?

The FDIC's deposit insurance is a prov-en safety net for your money in the bank. According to the FDIC, basic insurance amount is $250,000 per depositor, per insured bank.This does include principal and accrued interest up to $250,000. That amount only applied to all depositors of an insured bank only.

Every dollar is covered with deposit insurance should your bank fail. All deposits received at your bank are covered including checking, saving, and money market accounts.
For people who are not citizens of the United States or are not residents can have FDIC insurance on a deposit. This is also true for any business entity of person. The FDIC has made sure that all depositors are covered.

Use this link to find out if your account is fully insured.

https://www2.fdic.gov/drrip/afi/index.asp

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