What Happens to Your Accounts if U.S. Banks Fail? (Guide)

While I doubt the following suggestions will be applicable if we have a major bank failure over the next couple of weeks, I am posting this article for present and future reference. The article provides information about what may happen to your banking accounts if there is a bank failure.

The only potential drawback is the article's assumption that the FDIC will be solvent and able to cover any bank failures. However, as has been reported on here, the FDIC may be insolvent by the end of 2009.

The following information applies to the various bank closing situations mentioned above. If there is a difference between what would happen when a bank is acquired versus what happens if the FDIC has to run the bank, it will be noted.

Types of services affected by a bank closure

1.	ATM/debit cards	10.	Dormant accounts
2.	Automatic payments/escrows	11.	IRAs
3.	Automatic direct deposits/withdrawals	12.	Loans
4.	CD accounts	13.	Online services
5.	Checks	14.	Overdraft line of credit
6.	Deposits	15.	Night deposit boxes
7.	Insured deposits	16.	Safe deposit boxes
8.	Uninsured deposits	17.	Tax information
9.	Brokered deposits	18.	Trust accounts

1. ATM/debit cards -- You should have access to your funds though an ATM, but transactions during the time the bank is closed may not be posted to your account right away. It's your responsibility to keep track of your transactions.

"ATMs are taken offline for processing," Barr says. The consumer never knows it. They're taken offline all weekend from the FDIC's standpoint, so if you use the ATM, that money is not being posted or withdrawn from your account. We have to balance the books so that on Monday morning we know exactly how the bank looked when it was closed. While customers can use ATMs over the weekend, technically those transactions won't hit the account until Monday morning."

Source: Bankrate.com