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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.

Fall 2009

No Safer Place in the World for Your Money
Why the FDIC's guarantee is rock-solid

"No insured depositor has ever lost a penny of insured deposits — and none ever will. The FDIC was created specifically for times like these. Our resources are strong. Your insured deposits are absolutely safe."

– FDIC Chairman Sheila C. Bair

As bank failures are in the news, the FDIC is reminding consumers that our financial resources run deep and that their insured deposits are fully protected.

"Depositors should understand that the chances of their bank failing are low, and even if their bank does fail, depositors have nothing to worry about," said FDIC Chairman Sheila C. Bair. "The FDIC fully guarantees their insured deposits and provides them with seamless access to their money. For the insured depositor, a bank failure is a non-event."

As Chairman Bair also has said, "The American people can rest comfortably knowing that their FDIC-insured deposits are 100 percent safe. In fact, there's no safer place in the world for their checking, savings or retirement money."

Here's why you can trust the ironclad protection of FDIC insurance.

By law, federal deposit insurance is backed by "the full faith and credit of the United States government." This is important. It means that the financial resources of the U.S. government protect federally insured depositors — and you can’t do better than that. "In short," said Chairman Bair, "we cannot run out of money."

If needed, the FDIC can quickly borrow money from the U.S. Treasury. The FDIC has immediate access to a $100 billion line of credit at the Treasury that, under federal law, can be expanded to $500 billion. The FDIC also has additional authority to borrow money from the Treasury for various other purposes. However, Chairman Bair has stressed that the FDIC expects to continue to collect premiums from the banking industry to pay for banking industry problems – without borrowing from U.S. taxpayers.

Federal law also requires that all insured deposits be paid "as soon as possible." If a bank fails, the FDIC has always paid every penny of insured deposits, up to the insurance limit, including principal and any accrued interest through the date of the closing.

In most cases, the FDIC provides access to accounts on the next business day by arranging with a healthy institution to assume the insured deposits. The account owners can then decide whether to remain as customers of the other bank or move their money elsewhere.

If the FDIC cannot find another institution to assume the failed bank’s accounts, the FDIC will issue checks to depositors in amounts up to the federal insurance limit. That process can take longer than one business day but usually not more than three business days.

With certain types of deposits, such as living trust accounts and deposits placed through brokers, the FDIC may need more time to finalize the insurance payment, but usually no more than a week or two.

According to Chairman Bair, the bottom line for consumers is this: "No insured depositor has ever lost a penny of insured deposits — and none ever will. The FDIC was created specifically for times like these. Our resources are strong. Your insured deposits are absolutely safe."

To learn more about how to be sure all your deposits are under the insurance limits and fully protected by the FDIC, see How to Make Sure All Your Deposits Are Protected by FDIC Insurance.

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Last Updated 11/16/2009