You should not be worried, unless you have over the FDIC limit that they insure. The FDIC will be good up to its limit.

We are in uncharted financial territory right now and I would be very careful where you keep your cash. A few of the banks at this current time that seem the most safe to me are:

1. Bank of America
http://www.bankofamerica.com

2. JP Morgan Chase
http://www.chase.com

3. Citigroup
http://www.citibank.com

These big three banks in the United States seem to be the safest in this unchartered financial debacle. However, I would not keep your money in just one bank, and diversify your accounts, as well as keep some cash on hand, just in case you need it.

That does mean in a few weeks this couldn't change but those are the best and I feel the safest banks at this current time.

You should not worry about the FDIC, as they insure you up to a certain amount, and seem to pay as soon as possible as shown in the FAQ link below.

http://www.fdic.gov/deposit/deposits/insured/faq.html

According to its website FAQ question:

How long does the FDIC take to pay insurance on deposits after an insured bank fails?

"Federal law requires the FDIC to make payment as soon as possible. Historically, the FDIC pays insurance within a few days after a bank closing either by establishing an account at another insured bank or by providing a check. Deposits purchased through a broker may take longer to be paid because the FDIC may need to obtain the broker's records to determine insurance coverage."

I have received this information from a friend who is an expert financial advisor, and keeps up to date with the latest. Accordingly, he has outlined for you another good option that can be good for diversification purposes.

The name of it is CDARS, a five-year-old system designed to offer FDIC protection for amounts far greater than the standard $100,000 limit.
CDARS, which stands for Certificate of Deposit Account Registry Service, is a financial service created by the Promontory Interfinancial Network in Arlington, Va. CDARS works by farming out large deposits across multiple banks within its network. Funds are then invested incrementally in multiple CDs, with no single bank holding more than $100,000. If any individual bank fails - as several CDARS members have - the CDs it holds will be of a low enough value to be fully covered by the FDIC.

CDARS is free to depositors, and can insure deposits of up to $50 million. Member banks pay a one-time fee to join the network and thereafter pay transaction fees on the funds they pass through CDARS. Most of the network's 2,500 banks are small community banks - the average asset base of members is $250 million, according to Mark Jacobsen, president and COO of Promontory Interfinancial Network.

Businesses make up the bulk of CDARS customers, accounting for 37% of its volume. Individuals, public entities like local governments, and banks themselves are also major customers.

"What businesses like about CDARS is that they can deal only with their local institution and still protect their deposits," Jacobsen said.

The financial markets' recent instability has been profitable for CDARS. Promontory doesn't disclose how much money is covered by the CDARS system, but its transaction volume has tripled since July, Jacobsen said. Banks have also come courting: CDARS is enrolling 100 new institutions this month. A list of member banks offering its services is available on CDARS' Web site.

After his NetBank debacle, Applied Cognetics' Coulthrust began exploring options like CDARS. In the end, though, he opted for simplicity and faith in the "too big to fail" theory; if Bank of America tumbles, he's giving up and investing in First National Bank of Mattress.

Applied Cognetics has gotten back some of its NetBank savings in dribs and drabs through quarterly dividend payments, dispersed as the FDIC sells off NetBank's assets. To date, uninsured NetBank depositors have recovered 85% of their cash, according to the FDIC. Coulthrust estimates that his company is still short around $150,000, but he sounds resigned to his fate. In a way, the recent rash of financial system failures has been a comfort to him.

"When NetBank went down people were like, 'You had your money in an online bank?' I felt like a total loser," he said. "But then all these big banks started to close. Right after NetBank closed and we got all this press coverage, all these investment bankers from Wall Street started calling me up. They wanted to take our assets and manage them. Thank God we didn't go with them, because half of them are gone now."

Quittel is less sanguine. She's still furious about the $10,000 she lost in IndyMac's failure - a sum that reduces what she she'll be able to set aside this year toward retirement - and irate that banks and federal regulators don't do more to warn customers when their accounts surpass insured limits.

"I had the most incredible sense of despair when this happened, because I was blindsided," Quittel said.

Quittel is hardly alone in being caught out: 10,000 depositors at IndyMac had uninsured deposits, totaling $1 billion. More broadly, about 37% of the $7.07 trillion on deposit with U.S. banks at the end of 2008's first quarter is uninsured, according to a Wall Street Journal analysis of data reported to the FDIC.

Now banking at Citibank (C, Fortune 500), Quittel says she'll never again allow any account of hers to creep past insured limits.

"You can't allow electronic payments to flow into an account anymore if it's going to put you over. Even if I had a liability that needed to go out that same day, I might ask a client to pay me with multiple, physical checks instead of one big lump sum," she said. "Any bank might go under."
Source(s):
http://www.fdic.gov/deposit/deposits/insured/faq.html
http://www.cdars.com
http://en.wikipedia.org/wiki/Financial_crisis

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I would say no.

As the article you link to says: "The FDIC has authority to tap a $30 billion line of credit at the Treasury Department and legislation pending in Congress would boost the amount to $100 billion."

"The deposit insurance fund won’t dry up because the government can get funds from the industry and congressional appropriations, and borrow from the Treasury, Chip MacDonald, a partner specializing in financial services at law firm Jones Day, said today in a telephone interview.

'As a depositor, I am not worried in the least,' MacDonald said."

Basically, there is no question that the government would let the FDIC run out of money. The only problem seems to the FDIC head's insistence on trying to tap hard-pressed banks for the funds instead.

I don't have much doubt her head would roll if she pushed that line so far it put people's savings in danger, and someone would be put in place that wasn't such a purist about where they got their money.
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Hi! While I appreciate easyboys lengthy answer I personally think it is always good to worry about your money ( at least a little bit ) and particularly in these times.

There is no doubt that you want to keep your savings with the FDIC limits but even then it is probably a good idea to have

1. Enough cash around somewhere safe (outside of the banking system) to fill up 4 tanks of gas and buy one weeks worth of groceries. This will come in handy in the event of a bank situation or a natural disaster where atms may not be available.
2. Have some of your savings in gold
3. Diversify your savings across a couple of accounts.

Then again I think those are pretty good suggestions even in a good economy. It is just like taking water and your basic survival kit on a long hike - you just want to be prepared in the event of unknown event. It's better to be prepared.
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This is all good information, but it is significant overkill. All you really want to know is will you be able to get your money.

It is very rare for a bank to be shut down and the depositors to wait for a check. In most cases, the FDIC arranges with another bank to assume the deposits of the failed bank even before announcing the closure. More often than not you will still be able to use your existing checkbook until you can get a new one.

This assumes that your account is not greater than the FDIC insurance limit.

The FDIC will NOT have to wait for Congress. They have their own reserves and can call on the Fed for more.

If you have a loan, you will get a letter giving you a new address to send your payments. ( If you do not get a letter before a payment is due send it to the old address. )

Depending on the condition of the bank, the size of the losses, the FDIC may sell the entire bank to another bank, It may sell different parts to different banks. You could wind up with a checking account in bank A and a loan at bank B but that would be relatively rare.

Do not worry about the FDIC and/or the FSLIC "going broke". They both went broke in the late 80's and nobody outside the banking community even knew it. Remember the thing that makes banks work is that on any given day only a very small fraction of 1% of the deposits are actually withdrawn. The FDIC doesn't need to come up with all that cash at once.

In the best of times, no bank will have enough cash on hand to pay out more than five to ten percent of their total deposits.

The comment about having a little cash on hand is good. You should always have enough cash on hand to eat for at least a week. Even an ice storm can cut you off from your funds for that long.
Source(s):
Source(s):
Involved in one manner or other in the failure of over 20 banks and 11 S&Ls in the 1980s. Worked for RTC and Southwest Plan.

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