If a person is depending on FDIC insurance to save him from a catastrophic banking failure, they should go to the FDIC insurance web site and look over the procedure to claim that insurance. I looked into it a few years ago and it was not a pleasant thought to go through it. Nor did it look like a quick resolution, in the case of a crisis event.

Guide to processing.

If you look at the top few boxes of the flow chart, to my knowledge that is how any banks that officially fail have been handled to date. The problems are taken care of internally within the banking system, a new bank takes over the liabilities of the failed bank (usually with some money kicked in by FDIC to help out), and depositors are none the wiser. Their checking accounts never miss a beat. I would not be so sure that will be the procedure that will be followed if there is widespread crisis within the banking community where either very large banks fail or there is mass failure of smaller banks or all of the above. Then a person needs to look further down the flow chart to see how their "insured" money needs to make a claim against the insurance.

This is where you go to get the forms.

This is the form for a joint account.

What in the past has been done behind the scenes, seamlessly, a person might find themselves in the position during a widespread banking crisis of filling out one of these forms and waiting an unspecified amount of time to be reimbursed for losses. Is there always going to be a "strong bank" willing and able to take over the "weak bank" as in the past? This could be cause for a very difficult time for some people if ATM cards did not work and checks could not be written against the account. Think Cyprus. Even if the government backs up FDIC and all claims are made good, will it take a week? A month? How long can the average family go if their bank cards do not work and their checking account is frozen? IF THE PLACE THEY WORK FOR CAN NOT WRITE PAYROLL CHECKS.

This has not happened. But by the looks of things it could be in our future.

I know, I know. Crying wolf. Maybe it will not happen. I hope it doesn't. But some cash set aside in a safe somewhere along with a few other "doomsday" precautions might not be such a bad idea, the banking situation being what it is today. Worst case is a little cash sitting idle not drawing a tenth of a percent interest in a bank account.

John