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Bank Folded; Where's my MMDA?
I have money in a money market account and my bank folded. What are the consequences?
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 Assuming you had less than $250,000 in the account and other accounts in that same ownership category, your deposits are fully insured. In most cases, a new bank takes over the good assets of the old bank, and in that case you can go to the new bank, in that same branch you were used to visiting, and you can deposit, withdraw, and inquire, just as before.
The FDIC and your bank will have materials to help you understand your coverage. Three examples of the "rights and capacities" that define separate insurance coverage limits are accounts held individually, accounts held jointly with other natural persons, and retirement accounts. All your individual accounts are added together and are insured to $250,000. The same goes for joint accounts. If you had a joint account with John and another with Bill, your shares of those accounts (divide the balance in the account by the number of owners) would be combined and insured to a separate $250,000 limit. Qualified retirement accounts can have $250,000 in coverage, so right there you could have $750,000 in insured deposits in one bank. And there are other "rights and capacities that your banker can tell you about that can increase that amount considerably! Often excess deposits over the insured amount are paid in whole or in part, but they are not insured and there is no guarantee of such payments.
Note: This page has been updated to reflect the temporary increase in deposit insurance limits. The "standard maximum deposit insurance amount" on FDIC and NCUSIF deposit coverage was increased to $250,000 beginning on 10/3/08. It will revert to $100,000 after 12/31/2013.
Published on BankingQuestions.com 9/24/08; revised 6/16/09
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