 TITLE: What Is FDIC Insurance? CONTENT: What Happens When a Bank Fails\n------------------------------\nWhen an FDIC-backed bank fails, the FDIC works diligently to sell it to another financial institution promptly through a purchase and assumption transaction. If their efforts are unsuccessful, the FDIC disburses funds (up to the insured limit) to depositors directly through a deposit payoff.\nIt could take up to two business days to receive your funds, unless accounts are linked to trust agreements or fiduciaries. In this case, it could take longer for insurance payments to be sent to you, as additional documents may be needed to release funds.\nBelow are some other important considerations to keep in mind when a bank fails:\n*   **Unused checks and deposit slips**: You can continue to use checks and deposit slips for your account if your bank is acquired.\n*   **Interest earned on deposits**: Interest will no longer accrue on deposits if your bank closes. The accrual of deposits will resume if a new bank takes over, but at the new interest rate they set.\n*   **Direct deposits**: Funds are deposited as usual if your bank is acquired by another bank. Otherwise, the FDIC will reroute direct deposits to a different bank temporarily so depositors will have access to their funds.\n*   **Pending checks and payments**: These are typically processed without a hitch if your bank is acquired. If not, the checks will not clear and payments will be returned. The returned transactions will not directly hurt your banking or credit profile, but you'll need to make other arrangements to remit payment right away to make sure it's considered on time.\n*   **Safety deposit boxes**: You can continue to access your safety deposit box if a healthy bank takes over. Otherwise, you will receive a letter from the FDIC that details how to access the contents of your safety deposit box.\nIf you do have over $250,000 in a single FDIC-backed account, your funds may not be at risk if they are held in separate ownership categories. For example, you could have $250,000 in a single account and another $250,000 in a joint account at the same bank.\nAnother option to protect your hard-earned money is to have accounts at more than one bank. Let's say you have $1 million and open four money market accounts at four different FDIC-backed banks with deposits of $250,000 each. Your funds won't be at risk of loss. However, if you put the entire amount into the same type of account at a single FDIC-backed bank, $750,000 would not be insured. END