There Are Special Rules for
Deposit Insurance When Banks Merge
As banks continue to merge,
customers of merging institutions ask the FDIC what happens to
their $100,000 deposit insurance coverage. Customers are most
concerned about what happens if they have accounts at two
institutions that merge, and the combined funds exceed
$100,000. In general, accounts at the two institutions
before the merger would continue to be separately insured
for six months after the merger—and longer with some
certificates of deposit (CDs).
This grace period helps
depositors in at least two ways. First, it limits potential
losses if the "new" bank fails soon after the merger. Second,
the grace period gives depositors extra time to become fully
insured, if necessary, by restructuring the accounts at the
merged institution or moving excess funds to another insured
institution.
To top of Page
Banking
