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If Your Bank Is Merging...

Wednesday, May 22, 2013 - 9:31 AM
From the FDIC's Consumer News:
Under FDIC rules, for at least six months after the merger your “transferred” deposits will be separately insured from any accounts you may already have had at the assuming bank. “This grace period gives a depositor the opportunity to restructure his or her accounts, if necessary,” explained Martin Becker, Chief of the FDIC’s Deposit Insurance Section. “This is useful when a depositor holds funds at each of the two banks prior to the merger, each in the same ownership category, and now the combination of funds after the merger exceeds $250,000.”

...  If you are doing business with a new bank that acquired your accounts from a bank that failed (i.e., not because of the merger of two open institutions), different rules apply for deposit accounts. Although the acquiring bank has taken the failed bank’s deposit accounts, the original contract with the failed bank no longer exists. So, the new bank will create a new deposit contract, perhaps with a lower interest rate. Rates on certificates of deposit (CDs) may also be changed. In this case, the failed bank’s customers can withdraw their money without an early withdrawal penalty.

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