What happens if my bank goes bust?
When a bank fails, the FDIC or a state regulatory agency takes over and either sells or dissolves the bank. Most banks in the US are insured by the FDIC, which provides coverage up to $250,000 per depositor, per FDIC bank, per ownership category.
If your bank fails, up to $250,000 of deposited money (per person, per account ownership type) is protected by the FDIC. When banks fail, the most common outcome is that another bank takes over the assets and your accounts are simply transferred over. If not, the FDIC will pay you out.
Generally, money kept in a bank account is safe—even during a recession. However, depending on factors such as your balance amount and the type of account, your money might not be completely protected. For instance, Silicon Valley Bank likely had billions of dollars in uninsured deposits at the time of its collapse.
Still, the FDIC itself doesn't have unlimited money. If enough banks flounder at once, it could deplete the fund that backstops deposits. However, experts say even in that event, bank patrons shouldn't worry about losing their FDIC-insured money.
"People who have their money in insured accounts have nothing to worry about," said Mark Hamrick, senior economic analyst at Bankrate.com. "Simply make sure that deposits fall within the guaranteed limits, whether it's FDIC or the credit union equivalent."
There is a systemic risk of large-scale bank failures in the U.S. in 2024 due to charge-offs and write-downs emanating from the commercial real estate sector. Bank regulators have been vocal about their concerns that the too-big-too-fail banks would have sufficient capital to cover losses and a recession.
Your money is safe in a bank with FDIC insurance. A bank account is typically the safest place for your cash, since banks can be insured by the Federal Deposit Insurance Corp. up to $250,000 per depositor, per insured institution, per ownership category.
As long as that bank is FDIC-insured and your deposit doesn't exceed $250,000, you should be safe to do so. It might be worth it to maintain an account at a separate bank, however, just in case a bank error or accidental account freeze results in a loss of access to your money for a time.
Ensure Your Bank Is Insured
If a bank or credit union collapses, each depositor is covered for up to $250,000. If your bank or credit union isn't FDIC- or NCUA-insured, however, you won't have that guarantee, so make sure your funds are at an institution covered by deposit insurance.
It doesn't make sense to take all your money out of a bank, said Jay Hatfield, CEO at Infrastructure Capital Advisors and portfolio manager of the InfraCap Equity Income ETF. But make sure your bank is insured by the FDIC, which most large banks are.
Can a bank refuse to give me my money?
Yes. Your bank may hold the funds according to its funds availability policy. Or it may have placed an exception hold on the deposit.
Best for Large National Banks
15,000+ ATMs in the U.S. Bank of America is just one place below JPMorgan Chase on both the 2023 G-SIBs list and the Federal Reserve's list of the largest U.S. banks, which is why it was chosen in our research as one of the safest banks.
Since 1933, no depositor has ever lost a penny of FDIC-insured funds.
The assuming bank may also purchase loans and other assets of the failed bank. Deposit Payoff. When there is no open bank acquirer for the deposits, the FDIC will pay the depositor directly by check up to the insured balance in each account. Such payments usually begin within a few days after the bank closing.
Generally speaking, credit unions are safer than banks in a collapse. This is because credit unions use fewer risks, serving individuals and small businesses rather than large investors, like a bank.
Putting money in savings accounts, money market accounts, and CDs keeps your money safe in an FDIC-insured bank account (or NCUA-insured credit union account). Alternatively, invest in the stock market with a broker.
- Maximize liquid savings. ...
- Make a budget. ...
- Cut back on unneeded expenses. ...
- Commit to closely managing your bills. ...
- Take inventory of your non-cash assets. ...
- Pay down your credit card debt.
- Citigroup.
- Barclays.
- BNP Paribas.
- Morgan Stanley.
- Wells Fargo. The San Francisco-based bank is the Des Moines metro's largest private employer.
2024 in Brief
There are no bank failures in 2024. See detailed descriptions below. For more bank failure information on a specific year, select a date from the drop down menu to the right or select a month within the graph.
- First Republic Bank (FRC) . Above average liquidity risk and high capital risk.
- Huntington Bancshares (HBAN) . Above average capital risk.
- KeyCorp (KEY) . Above average capital risk.
- Comerica (CMA) . ...
- Truist Financial (TFC) . ...
- Cullen/Frost Bankers (CFR) . ...
- Zions Bancorporation (ZION) .
How many banks are on verge of collapse?
Recently, a report posted on the Social Science Research Network found that 186 banks in the United States are at risk of failure or collapse due to rising interest rates and a high proportion of uninsured deposits.
Asset-heavy, diversified and regulated banks like JPMorgan Chase, Wells Fargo, PNC Bank and U.S. Bank are among the safest banks in the U.S. and should be considered if you are weighing your options.
Banking regulation has changed over the last 100 years to provide more protection to consumers. You can keep money in a bank account during a recession and it will be safe through FDIC insurance. Up to $250,000 is secure in individual bank accounts and $500,000 is safe in joint bank accounts.
Your money is safe at Capital One
Capital One, N.A., is a member of the Federal Deposit Insurance Corporation (FDIC), an independent federal agency. The FDIC insures balances up to $250,000 held in various types of consumer and business deposit accounts.
- JP Morgan Private Bank. “J.P. Morgan Private Bank is known for its investment services, which makes them a great option for those with millionaire status,” Kullberg said. ...
- Bank of America Private Bank. ...
- Citi Private Bank. ...
- Chase Private Client.
References
- https://www.helpwithmybank.gov/help-topics/debt-credit-scores/debt-management/right-of-offset-repayments/right-of-offset.html
- https://smartasset.com/investing/where-do-billionaires-keep-their-money
- https://finance.yahoo.com/news/income-level-considered-rich-140003986.html
- https://www.usnews.com/banking/articles/credit-union-vs-a-bank
- https://www.spergel.ca/learning-centre/general/can-the-bank-take-my-money-if-i-fall-behind-on-debts/
- https://finance.yahoo.com/news/money-safe-bank-130024741.html
- https://www.cftc.gov/LawRegulation/DoddFrankAct/index.htm
- https://www.fdic.gov/consumers/consumer/news/cnsum18/insured.html
- https://www.thestreet.com/personal-finance/banks-most-at-risk-morningstar
- https://americandeposits.com/brief-history-us-bank-failures/
- https://www.helpwithmybank.gov/help-topics/bank-accounts/electronic-transactions/automatic-withdrawal-preauthorized-payments/automatic-withdrawal-stop.html
- https://www.cato.org/blog/less-one-percent-accounts-are-above-fdic-limit
- https://www.bankrate.com/banking/what-to-expect-from-your-failed-bank/
- https://ask.fdic.gov/fdicinformationandsupportcenter/s/article/Q-What-does-FDIC-deposit-insurance-not-cover
- https://www.forbes.com/advisor/banking/if-a-bank-closes-what-happens-to-my-money/
- https://www.fdic.gov/analysis/quarterly-banking-profile/fdic-quarterly/2010-vol4-2/fdic-quarterly-vol4no2-claimsarticle.pdf
- https://www.fdic.gov/consumers/banking/facts/payment.html
- https://www.bankrate.com/banking/savings/ways-to-insure-excess-deposits/
- https://www.bankrate.com/investing/investing-during-a-recession/
- https://www.businessinsider.com/personal-finance/are-cds-safe
- https://www.fool.com/the-ascent/banks/checking-accounts/how-much-should-i-keep-in-my-checking-account/
- https://www.polsinelli.com/publications/how-to-protect-large-deposits-over-250000
- https://smartasset.com/investing/5-things-to-invest-in-when-a-recession-hits
- https://www.investopedia.com/what-happens-if-my-bank-fails-7378029
- https://www.consumerfinance.gov/ask-cfpb/how-can-i-be-sure-my-money-is-safe-in-my-bank-account-en-1005/
- https://www.fdic.gov/resources/deposit-insurance/
- https://www.fdic.gov/news/press-releases/2020/pr20032.html
- https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/
- https://www.businessinsider.com/personal-finance/recession-save-more-cash-strategies-2022-12
- https://www.fdic.gov/resources/deposit-insurance/brochures/insured-deposits/
- https://www.cbsnews.com/news/is-my-money-safe-in-the-bank-2023/
- https://www.fool.com/the-ascent/banks/where-put-money-recession/
- https://www.investopedia.com/what-happens-to-your-cd-if-your-bank-fails-7511009
- https://finance.yahoo.com/news/4-most-popular-banks-millionaires-150054420.html
- https://www.quora.com/Has-a-bank-ever-refused-to-give-you-your-money
- https://www.moneycrashers.com/money-safe-bank-during-recession/
- https://www.globalcitizensolutions.com/safest-banks-us/
- https://www.fdic.gov/resources/deposit-insurance/faq/
- https://www.usnews.com/banking/articles/is-my-money-safe-at-the-bank
- https://www.usatoday.com/money/blueprint/retirement/protect-your-401k-during-recession/
- https://www.macu.com/must-reads/tips/prepare-for-a-possible-future-financial-crisis-fined
- https://www.forbes.com/advisor/banking/safest-banks-in-the-us/
- https://money.usnews.com/investing/articles/best-investments-during-a-recession
- https://www.fscs.org.uk/what-we-cover/banks-building-societies/
- https://www.forbes.com/advisor/banking/is-my-money-safe-in-the-bank/
- https://www.quora.com/How-did-the-wealthy-maintain-their-wealth-during-the-great-depression
- https://www.investing.com/analysis/lessons-from-the-great-depression-200640177
- https://www.1edcu.org/are-credit-unions-safer-than-banks-in-a-collapse/
- https://www.capitalone.com/bank/fdic/
- https://www.fdic.gov/resources/supervision-and-examinations/consumer-compliance-examination-manual/documents/7/vii-1-1.pdf
- https://www.barrons.com/articles/small-community-banks-are-teetering-expect-more-failures-a3de6f78
- https://www.quora.com/Is-it-legal-to-store-large-amounts-of-cash-at-home-in-the-United-States
- https://money.usnews.com/money/personal-finance/family-finance/articles/how-you-can-protect-your-money-in-the-wake-of-banking-collapses
- https://www.investopedia.com/articles/markets-economy/090716/why-bank-bailins-will-be-new-bailouts.asp
- https://www.desmoinesregister.com/story/money/business/2023/03/20/how-to-know-if-your-money-is-safe-after-bank-collapses/70020619007/
- https://www.marketplace.org/2023/06/02/just-how-safe-are-credit-unions/
- https://www.hrblock.com/tax-center/irs/audits-and-tax-notices/can-the-irs-get-my-financial-information/
- https://www.nj.com/personal-finance/article/what-is-fdic-insurance
- https://www.investopedia.com/deposit-insurance-keeps-bank-accounts-safe-even-if-its-funding-runs-dry-7496229
- https://finance.yahoo.com/news/banking-crisis-affects-mortgage-150007673.html
- https://www.noradarealestate.com/blog/which-banks-are-in-danger-of-failing/
- https://www.fdic.gov/analysis/cfr/2014/wp2014/2014-04.pdf
- https://apnews.com/article/business-financial-services-signature-bank-6aa3564a8acda9098929abe4741fcbfd
- https://www.bankrate.com/banking/what-happens-when-a-bank-fails/
- https://www.forbes.com/advisor/investing/best-investments-stock-market-crash/
- https://www.cnet.com/personal-finance/banking/advice/what-happens-to-my-money-if-my-bank-closes-down/
- https://www.businessinsider.com/personal-finance/is-money-safe-in-bank-during-recession
- https://www.fdic.gov/consumers/banking/facts/priority.html
- https://www.investopedia.com/financial-edge/0812/5-places-to-keep-your-money-when-you-dont-trust-the-banks.aspx
- https://www.fdic.gov/resources/deposit-insurance/brochures/documents/your-insured-deposits-english-hr.pdf
- https://www.cnn.com/2023/03/13/business/svb-fallout-consumer/index.html
- https://www.cbsnews.com/news/what-the-fdic-does-when-a-bank-fails-60-minutes-2023-03-19/
- https://www.fdic.gov/deposit/diguidebankers/documents/joint-accounts.pdf
- https://www.stepchange.org/debt-info/debt-collection/right-of-offset.aspx
- https://www.businessinsider.com/personal-finance/recession-things-not-to-buy-2022-12
- https://www.investopedia.com/articles/economics/09/fdic-history.asp
- https://www.helpwithmybank.gov/help-topics/bank-accounts/funds-availability/index-funds-availability.html
- https://www.fdic.gov/bank/historical/brief/brhist.pdf
- https://safehavenvaults.com/how-to-protect-wealth-in-a-depression/
- https://obamawhitehouse.archives.gov/economy/middle-class/dodd-frank-wall-street-reform
- https://www.sofi.com/learn/content/how-to-insure-excess-deposits/
- https://www.fdic.gov/resources/resolutions/bank-failures/in-brief/bfb2024.html
- https://blog.logixbanking.com/smartlab/are-credit-unions-safer-than-banks
- https://www.fool.com/the-ascent/banks/articles/is-it-too-risky-to-keep-all-of-your-money-at-the-same-bank/
- https://www.usatoday.com/money/blueprint/investing/what-assets-are-recession-proof/
- https://www.moneysupermarket.com/savings/protecting-your-savings-guide/
- https://www.americanbullion.com/can-banks-seize-your-money/
- https://www.investopedia.com/financial-edge/0210/rules-that-warren-buffett-lives-by.aspx
- https://www.nerdwallet.com/article/banking/is-my-money-safe-in-a-bank
- https://smartasset.com/personal-finance/is-my-money-safe-in-the-bank-during-a-depression
- https://www.quora.com/Is-my-money-safe-in-the-bank-during-a-recession-or-depression
- https://upsolve.org/learn/personal-property-seized-after-judgment/
- https://www.stlouisfed.org/publications/regional-economist/october-2003/credit-unions-make-friendsbut-not-with-bankers
- https://finance.yahoo.com/news/where-millionaires-keep-money-070638027.html
- https://www.experian.com/blogs/ask-experian/dos-and-donts-of-saving-during-recession/
- https://time.com/personal-finance/article/what-happens-when-the-bank-closes-your-account/
- https://finance.yahoo.com/news/us-banks-trust-hard-earned-154119069.html
- https://www.nasdaq.com/articles/3-ways-to-get-rich-during-a-recession
- https://www.fool.com/the-ascent/banks/articles/over-1-trillion-has-left-traditional-banks-heres-whos-pulling-their-money/
- https://www.noradarealestate.com/blog/list-of-failed-banks/