Large Bank Failure in the works. Is your money Insured?

PALM BEACH GARDENS, Fla. (MarketWatch) -- The Federal Deposit Insurance Corp. is gearing up for the prospect of a large bank failure. So double-check that all your deposits, including interest, are well within FDIC insurance limits.
The agency seeks comment by April 14 on a proposed rule designed to help it make a quick insurance determination amid an increasingly complex quagmire of FDIC rules and tough-to-figure-out bank accounts.


One section would place a provisional hold on a fraction - say, 10% or so -- of certain account balances at some 159 of the nation's largest banks. The hold could affect some accounts with balances under $100,000.
If you have uninsured deposits at a bank, should you worry? Possibly. Depositors without FDIC coverage lost money in at least two recent failures -- NetBank, Alpharetta, Ga., and Miami Valley Bank, Lakeview, Ohio.
Of $109 million in uninsured deposits at NetBank, nearly 30% has not yet been reimbursed. Of $14 million in uninsured funds at Miami Valley, only 5.9% of uninsured funds, so far, has been reimbursed. All deposits in the most recent failure -- Douglass National Bank, Kansas City, Mo. -- have been reimbursed.
Fortunately, FDIC insurance limits have increased on certain accounts in recent years. Certain retirement accounts, for example, now are insured to $250,000, up from $100,000 per person.
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