What happens to "uninsured" deposits —those over the $100,000 insurance limit?

First, remember that all deposits within the $100,000 insurance limit are always fully protected. Also, in most cases, the FDIC will arrange with another institution to acquire your failed bank, and you will have immediate access to your insured funds by check, automated teller machine, debit card and other services.

But if your bank fails and you have funds exceeding the $100,000 insurance limit, the FDIC will start by giving you a document called a "receivership certificate" indicating the amount of your uninsured deposits. Then, depending on various factors—including the cost of the bank failure minus how much the FDIC recovers liquidating your bank's assets—you still can recover some or, in rare circumstances, all of your uninsured funds. The liquidation process can take several years, so it's important for uninsured depositors to make sure the FDIC has your correct address.

What if I have a cashier's check (or any other "official" check) from a failed bank?

Until a cashier's check, money order, interest check or other official check is cashed or deposited elsewhere and it "clears" the bank it is drawn on, the funds are still considered to be on deposit at that bank. So, if that bank fails before the check clears, the FDIC will combine the amount of the check with your other deposit accounts in the same ownership category, and the combined total will be insured to $100,000.

Example: You have a $125,000 savings account at XYZ Bank and you withdraw $75,000 in the form of a cashier's check. But before you deposit the check at another bank and the check clears, XYZ Bank fails. Your $75,000 cashier's check from XYZ Bank gets combined with the amount in your account there for insurance purposes, resulting in a $125,000 balance again and $25,000 uninsured.

What happens to my direct deposits?

If a failed bank is acquired by another bank, all direct deposits, including Social Security checks or paychecks delivered electronically, will be automatically deposited into your account at the assuming bank.

If the FDIC cannot find an acquirer for the failed bank, the FDIC will arrange with another local bank to temporarily process any direct deposits until you can make new arrangements for direct deposits as well as automatic withdrawals (such as automatic payments to utilities or insurance companies) with other banks.

How can I access my safe deposit box?

If the FDIC finds a new owner for a bank where you have a safe deposit box, you will be able to conduct business as usual. If the FDIC cannot find a buyer for your bank, we will mail instructions to you that will explain how you can remove the contents of your box.

What happens to any loans I have at the failed bank?

If your bank fails and you have funds exceeding the $100,000 insurance limit, you can still recover some or, in rare circumstances, all of your uninsured funds.

You remain liable for any payments due on a loan or credit card. You would continue making payments as you did before the bank failed until you are instructed to do otherwise in writing by the acquiring bank or the FDIC.

If your loan is delinquent and you have insured deposits at the bank, the FDIC may "set off" (deduct) the loan balance from your insurance payment. However, the FDIC will only deduct past-due money if the loan and the deposit account involve the same people. As an example, if you are delinquent on a loan that is in your name only, the FDIC may not deduct funds from a deposit account you own jointly with another person.

How can I get more information about what happens when a bank fails?

Start at the FDIC's Web site. Among the special services available online: updated information about individual bank failures dating back to October 2000 (FDIC Failed Financial Institution Information) and a searchable database of unclaimed funds from failed financial institutions (Unclaimed Funds). Or, you can call or write the FDIC at the addresses or phone numbers listed on "For More Information".