How reliable is the FDIC backing up to $250,000 per person at commercial and savings banks?
Pretty much rock solid up to the first $250,000 you have in an FDIC-insured bank. While the FDIC itself may have to request more money because of the failure of a dozen or so banks—including the giant Indy Mac in California, which cost the FDIC about $9 billion—this will not affect the reliability of the FDIC guarantee. It is as close to sacred as anything in the U.S. financial system, on a par with the reliability of U.S. Treasury securities. (On the other hand, and to be realistic, the net result of these and other current bailouts may be higher inflation and reduced purchasing power for your dollars.) Q: If my bank fails, how long will it take to get my FDIC-insured deposits back? A: According to the FDIC, the answer is: “Historically, the FDIC pays insurance within a few days after a bank closing….” By implication, and insofar as the recent tumult in the banking system may differ from those in the past, it may make sense today to keep enough cash on hand to pay for a month’s expens
