Bank Failures: 25 Things Everyone with a Bank Account Needs to Know

Outstanding Checks May Be Returned

If you have written checks from your checking account to businesses or vendors that have not been cashed at the time your bank is closed due to failure, they will all be returned if the FDIC can’t find a buyer. This return is because the FDIC will send you a check for the amount of funds in your checking account at the time the bank closes and they won’t make sure all of your outstanding checks are paid.

Brokered CDs Take Longer to Transfer, If They Transfer at All

If you own a CD that was purchased through a broker rather than directly from the bank itself, it might take a while to transfer from the failed bank to the acquiring one. In many cases, the acquiring bank won’t assume the CD because they want the customer purchase one directly from them.

Depositors, by Law, Have Top Priority to a Failed Bank’s Liquidated Assets

If you are a depositor with over the FDIC insured amount in a particular bank when it fails, you are in the best position to recover all of your money. By law, insured depositors receive payments from the failed bank’s liquidated assets first, followed by uninsured depositors, general creditors, and then stockholders. If you have the opportunity to become a stockholder in a banking institution, the Bank Health Ratings list mentioned above is mandatory research before moving forward.

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