There have been over 100 instances of bank failures in 2010. The Federal Deposit Insurance Corp, or FDIC, recently closed several banks in California, Virginia, and Chicago. How will you know if your bank fails? What happens to your money?
There are a few ways to learn if your bank has been closed by the FDIC. You may hear about it on the news, which can be shocking. The FDIC does not like to make public announcements about banks that are on the verge of failing. Instead, you can find a list of banks that have recently been closed on the FDIC website. Check back for updated information. Usually when a bank has closed, the accounts it was holding get absorbed by another bank. After this happens, the new bank will send mail to all of it’s new customers, informing them of the change that has occurred.
What should you do if your bank is one of the banks that is closed? First of all, don’t panic! If your bank was FDIC insured, your money is safe. It does not disappear.
If your bank has been assumed by another bank, you will not experience a service interruption. Go ahead and continue using your new bank as you would your previous one. Your credit cards, debit cards, and checks will still work. If your paycheck was being directly deposited from your employer to your bank account, it will be automatically routed to your “new” account.
It is possible that later, after everything has been sorted out, you will be informed of changes to your accounts. The new bank might offer you a different interest rate on your savings account than your previous bank was giving you. The new bank could have different programs and benefits than your old bank did. This could mean that you will be offered or informed about some of the products and services that the new bank has available. It may also mean that the deal you had when you joined your old bank is no longer valid. Expect to receive new checks, a new debit card, and a new bank issued credit card in the mail sometime soon, to replace the ones that were issued by your now non-existent previous bank.
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