Ask Money


Chris Farrell Aug 27, 2009

Question: Is it possible to lose money in 2 FDIC insured accounts if you have less than $250,000 in each FDIC insured bank but greater than $250,000 total in multiple FDIC insured banks and both banks fail? Ken, Rhododendron, OR

Answer: You won’t lose a penny if you have $250,000 or less in several FDIC insured banks and they all fail. Your money is safe. The FDIC has a good summary of its rules and regulations at it’s website. (The booklet on the insurance fund also explains how you can have more than $250,000 at one insured institution and still be covered; it has to do with the types of accounts the money is parked in.)

This money pledge holds even though the Federal Desposit Insurance Corporation issued today a bleak report card on the nation’s banking industry. The money in the deposit insurance fund fell by 20% to $10.4 billion in the second quarter. That’s its lowest level in nearly 16 years. Still, no one has lost a penny on a banking account that comes under the insurance limits since the fund was created during the depths of the Great Depression. And although many unthinkable things have happened during the Great Recession, I’m confident that the FDIC insurance is good.

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