FDIC Failed Bank List
fdic.gov
fdic.gov
If you have tons of cash (nice problem to have), you can open up brokerage accounts (Schwab, Fidelity, Vanguard are good ones), drop your money in a money market, and SIPC insurance is good for $500K.
There are also "cash accounts" at some banks that will spread your money around for you to maximize FDIC coverage. I don't like this, because you're putting all your faith in one bank saying "trust us".
[1] https://www.fidelity.com/bin-public/060_www_fidelity_com/doc...
FDIC insurance has pretty much never been pulled, the "failed bank" doesn't give you any insight into this, instead the FDIC uses the capitalization information of all the banks it has oversight over and uses that to act as a broker for sells before the insurance is needed.
They just get on the phone with a bigger bank and say "hey you wanna buy this massive pile of crap and mismanagement for pennies on the dollar with an assurance you'll avoid any antitrust issue or prosecution for fraud from this new subsidiary you'll have?"
And the bigger bank is like "woah all those customers and their info and people that think they have free checkings account? we can make all this money back in the first month!"
and all the balances are placed in the bigger more heavily capitalized bank.
In 2008 the big banks also had trouble, and it was pretty skillfully managed, note that FDIC insurance would not have been able to cover a big bank failing, it is a confidence scheme just like everything else. And the the consolidations occurred for the next 6 years. There is nothing proven to prevent losses during 2008's great financial crises, or a worse scenario, there are things that fortunately didn't happen.
All of this is before you have to worry about those insurance ownership categories. Because you're right, that is very nuanced!
It's either: FDIC insurance won't matter (small bank failing), or, FDIC insurance won't matter (big bank failing). And so given no proven alternatives, I don't worry about it.
You can min/max by having 100s of bank accounts with a max of $250k if you really want. I'll pass.
When IndyMac failed in 2008, the FDIC took over and payed in full the first $100,000 and %50 of the remaining amount. In 2018, it retroactively upped the limit to $250,000.
There larger banks are all bailed out, but that won't necessarily happen with medium sized banks that fail when there isn't a systemic financial crisis.
https://www.seattletimes.com/business/real-estate/extended-f...
Edit: during the savings and loan crisis, plenty of banks failed and insured accounts were only guarantee to receive the insured amount.
Fdic’s brokering behavior was a reaction that’s been very successful
https://closedbanks.fdic.gov/dividends/
The FDIC does a very good job, and if the bank is closed early the chances of recovery are high.
During the S&L crisis there were plenty of such cases. That result in a lot of tragedies. A customer whose spouse has just died and they haven't had the chance to move money from to another account often lost half of their net worth.
Take any book on the period and you'll find many examples. I'd recommend The Best Way to Rob a Bank is to Own One by William K. Black.
Edit: In the dividend list, look for the latest information for any bank. It sometimes takes a decade for the last payment to be paid.
Anyway, kinda neat. It would be interesting if they included a summary of what the expected cause of the failures were too.
https://www.npr.org/2009/03/26/102384657/anatomy-of-a-bank-t...
https://www.ncua.gov/support-services/conservatorships-liqui...
Does anybody know if the FDIC has a complete list?
Why are there "other" kinds of financial banks at all?
If you'd said a food bank, I'd understand the fundamental difference.