Can banks close down without giving back your money?

Question

Let's say a local bank were to close during this recession, are they required to give back all of the money you were keeping there? I mean, they can't just close down and steal all of your money can they?

Answer 1

Most banks are FDIC insured which essentially means that the government will pay back the money you have in that bank up to $100,000 if the bank goes under.  They usually post the sign, stating they are members of FDIC on their door.  So no... they can only close down and steal all your money if you're a stockholder (just kidding... it's a bit more complicated than that).

Answer 2

Relax, your money ain't goin nowhere, sabes!

First, lets assume it's not merging or being acquired in which case the other company must assume their liabiloities- i.e. your deposit. Now banks are regulated by a Federal body FDIC or OTC, and statutory Body- your state banking dept. This is where we definitely need government involvement. BOTH audit the bank quarterly and review their financials to make sure the bank can pay you, the depositor, should you want your money, or if a lot of their loans go bad, which is popular these days. Now most banks have FDIC insured deposits up to $100,000 (Credit Unions have CUNA). That's Uncle Sam backing your deposits. In the case of bank burglary, hackers, or a good ol fashion robbery, banks buy Bond Insurance to cover that, usually in the area of 1% of their deposits because this is rare.  

Now lets say your bank is run by monkey managers, the Feds or state agency will cite the bank and put them under supervision, giving them usually 60-90 days to shape up or the Feds and/or state come in and take over the drivers seat to make sure your $10 (hypothetical- lol) are still there. IF they don;t shape up, they come in, the court appoints a Receiver who is supervised, and he starts liquidating the bank and giving back money. Your deposits will get in your hands BEFORE the creditors get theirs- you get paid before the bank gets its legs broken.  Comprende? The Depression era bank run is very unlikely to happen. Well, not in my lifetime. Sleep easy.

Answer 3

insured up to 100,000

Answer 4

here in canada if a local closes your money would still be in another bank of the same name the other banks would still have it.