A New Tool to Check Deposit Insurance Status
by James Millar, PhD
When a bank fails, the first thing its depositors seek is reassurance about the insured status of their deposits. The Federal Deposit Insurance Corporation (FDIC) has responded to these concerns with a new online tool called "Is My Account Fully Insured?"
The tool can be accessed on FDIC's Web site. It provides information for customers of banks that failed after July 1, 2008. FDIC indicates that as additional banks fail, their intention is for the service to be available for use no later than the first business day after each failure.
Clicking on the dropdown menu on the page pulls up a list of failed banks. Depositors can determine from this dropdown menu a) where the deposits of the failed institution(s) were transferred, or b) if the deposits were not transferred, the insured status of these deposits. Take for instance IndyMac Bank. Under Bank Name:" IndyMac Bank, F.S.B., Pasadena, CA " depositors will get a prompt to input an account number. If a person attempts to submit an account number that is not associated with the failed institution, he will get an error message reading "the account number you entered is not valid". Each account a depositor has at the failed bank must be checked individually, as the system provides information on only the account number entered.
In two recent instances where all deposits, both insured and uninsured, were fully transferred to an acquiring institution, merely choosing one of those institutions leads to a message that says "The full balance of each of your deposit accounts has been transferred to …." It goes on to provide contact information that can be used to further inquire about the deposit accounts.
For depositors worried about security of the site (Will my account information be displayed for all the world to see?), rest easy. The FDIC only provides information on whether or not the account is insured. The FDIC does not provide any information other than a negative or affirmative answer to "Is my account fully insured?" No personal information such as account holder names, balances, PIN numbers, routing numbers or other information is provided.
The big limitation is that the link does not provide information on the amount of the account balance insured/uninsured. The functionality of the system is merely to provide a yes or no answer to "Is my account fully insured?"
For those depositors who find that an account is not insured, the FDIC supplies contact information that can be used to reach an FDIC representative. As to the amount of the account that is insured/uninsured, depositors would have to contact the respective financial institution itself (in the case of a bridge bank, like the one formed after the IndyMac failure), or to the transferee institution if the accounts have been transferred, or to the FDIC itself if the institution is merely being liquidated.
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