Failing Bank - FDIC Question

[moguls]

Anyone had any experience dealing with a failing bank or getting their funds from FDIC after the bank failed?

I have a couple of long term CDs at a bank that's not looking too good financially right now. I'm trying to determine if I'm better paying the penaltly (6 mos interest) and taking the funds out, or leave the money there with the understanding that FDIC will cover the accounts.

From what I've seen searching the topic, FDIC steps in fairly quickly and covers the funds. And that FDIC insurance covers the principle plus any accrued interest.

Any thoughts or suggestions would be appreciated.

 

[REWahoo]

All the FDIC failures I'm familiar with resulted in the failed institution being sold to another bank over a weekend, with all funds, CD's, etc. being honored and available at the open of business on Monday. I wouldn't take out the money and pay a penalty.

 

[Texas Proud]

All the FDIC failures I'm familiar with resulted in the failed institution being sold to another bank over a weekend, with all funds, CD's, etc. being honored and available at the open of business on Monday. I wouldn't take out the money and pay a penalty.

+1 on this... even when WAMU failed (the largest failure in history) you could get your money the next business day....


Our company had an account in a small bank that failed and nobody bought it... the FDIC ran the bank and your money was available on the next Monday.... we got a letter informing us that we would not be getting the high interest we had from the day they closed it down and they gave us up to 6 months to move the money... after that, if we had not moved it they would send us a check...

To me, no worries as long as you are lower than the insured max....

 

[ERD50]

To me, no worries as long as you are lower than the insured max....

Agreed, and I would double-quadruple check that you are within the limits. -ERD50

 

[misanman]

We had a five year cd ladder for quite a while - 60 cds - and with a number of different banks. I think 3 failed during the mortgage crisis. Each time we got our money right away.

 

[sheehs1]

I had a IndyMac CD when IndyMac failed. Got my principle back with no problem.

However, I am the one while looking at my account noticed the IndyMac CD....and had to call my financial planner to ask him what happens. He had not notified me. Why am I not surprised.....

 

[kaneohe]

Agree w/ the others that it should be a non-issue. Amounts in CDs were always paid w/o my intervention. The only time I had a problem was when that AARP label bank failed. I had left $2 there figuring, as they said, that if I did nothing, the funds would be returned to me. They did not mention anything about a too-small-to-bother with threshold so my $5 disappeared.
I called them and they said I could file a claim. I suspect they were in error since the claim form sounded like it was for creditors but I filed it anyway.
Instead of sending me my $2, they spent $15 for a FedEx letter denying my claim. lolo buggas.