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Home >> Safe Deposit Boxes
Preparing for Bank Failure
I want to protect my family from whatever may happen with the economy and "possible impending bank failures", so I thought about putting cash (about 10k) into a safe deposit box instead of under the mattress. In the event of the failure of my bank, the one that would have my cash in a safe deposit box, would there be someone still at the bank, and would I have access to my safe deposit box? If you have any alternative suggestions, I would be interested.
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 So long as you have your funds distributed so that they are all FDIC insured, you shouldn't anticipate any problems. If a bank fails, it is taken over by another, stronger bank, or the FDIC may take control. In most cases the only disruption in service is over a weekend. While that isn't always the case, that is normal. Access to safe deposit boxes is the same as access to the branch. In the case of the recent IndyMac bank, ATMs were distributing cash based on a daily limit, so you could put some money in a safe deposit box, but it won't earn any interest for you there. If you aren't over your insurance limit ($250,000 in general terms, but ask your bank if you are not sure), our advice is don't sweat it.
If you want reassurance about your bank, speak to your CPA and have him review your bank's statement of condition. He can tell you if the bank is healthy or not. That wouldn't be a guarantee that it wouldn't fail, or that it would, but it might help you sleep at night.
Note: This page has been updated to reflect the temporary increase in deposit insurance limits effective October 3, 2008. 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
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