Did You Know?
The Federal Deposit Insurance Corporation (FDIC) was established in 1934, part of a bevy of financial reforms passed as a result of the Great Depression. When money is deposited into an account with an FDIC-protected bank, the FDIC guarantees the amount of money up to $100,000 per depositor, and some retirement accounts are covered up to $250,000 per deposit. Any deposit into an FDIC-insured bank is protected regardless of the depositor's citizenship status or country of residence. In light of the economic downturn of 2009, many FDIC-insured banks failed. In such instances, a formal notice of failure is issued to the FDIC by a government agency. That notice decrees the bank is no longer able to meet its obligations. Once that has been issued, the FDIC can then either take over the bank or it can be purchased by another bank. In 2009, numerous failed banks were purchased by other banks. Oftentimes, account holders find little immediate impact when their bank is purchased, as direct deposits are still made and even branches remain open, only now with different names on the doors.